Digital marketing budget for builders: Don’t spend more, spend smarter.

We’re often asked for a magic number for a builder’s marketing budget, the dollar amount that gives you the right balance. We can give you a rough number but the caveat is that it’s not just how much you spend, but where you spend it. The purpose of marketing is to deliver the most return on your investment: generating inquiries that can be cultivated to leads that, in turn, can be converted to sales.

We can tell you that spending anything less than 0.7% of your projected annual revenue on your marketing is too little. You will sell yourself short, literally and figuratively. More than 1.5% is on the high side.

Your marketing budget covers all expenses for advertising and sales, including your sales offices. It does NOT include model home expenses or salaries.

So, do the math. What’s the magic number for you?

Put your dollars in the right places

One hundred percent of consumers are heavily influenced by the Internet. They do their research, ask for ideas and recommendations, and make purchasing decisions here. So, it makes sense that you invest in the digital platform to reach your homebuyers. (Learn more about the different social media channels)

And let’s be clear. You’re not spending money, you’re investing your marketing budget. When you consider marketing as an expense, you’re subconsciously dismissing it as a necessary evil. An investment is expected to deliver a return.

Matt Riley, Vice President of Sales and Marketing for Royal Oaks Homes, has spent years transforming a conventional marketing program to a digital platform. His approach has driven traffic to numbers that many builders yearn for. The conversion rates from inquiry to lead and from lead to sale have soared. In 2013, the company’s website drew an average of 6,470 unique visits per month. Two years later, that number more than doubled to 13,831. Matt’s digital marketing program also incorporated a full-time Online Sales Consultant who was tasked with following up on leads and cultivating them to appointments. In 2015, 150 sales resulted directly from the efforts of this individual, who also scheduled 851 kept appointments for homebuyers to meet with an onsite sales associate.

With that in mind, where should you allocate your marketing funds?

1. Builder website

Your website is the foundation of your entire marketing program. Consumers will look to decide whether or not to consider you as their custom homebuilder. All of the other components in your marketing toolkit drive traffic to your website, so you need to invest in getting it as sharp, engaging, and action-driven as you can. This is your virtual model home. Imagine if your model home were sparsely furnished and under-staffed. Maybe some of the doors wouldn’t open or rooms were unfinished. Would you consider this a good reflection of your company’s capabilities? A weak website presents exactly the same obstacle.

Present a site that is designed to present your brand with mobile-first formatting that ensures Google can find it. Skimping here will only compromise your results. Is it worth the “savings” of a few thousand dollars to lose leads? (What Makes a Good Website?)

2. Search engine optimization (SEO)

Once you build your website, you need to optimize it so the search engines take notice and place you high in the search engine results pages (SERPs) when a prospect is looking for a builder in your area. SEO requires knowledge and experience, cause the algorithms that drive results are regularly changed to avoid people from figuring out how to override the system. SEO is not a set-it-and-forget-it task. You should allocate a monthly fee to have this critical process professionally managed. (Learn more about increasing your rankings)

3. Content creation

The quality of your website is significantly impacted by the content you place there. Content is photos, floor plans and elevations, videos, 3D tours, blogs (Getting Started with a Blog), descriptions, community updates, buyer testimonials, and much more. Your website content is your “show and tell”—communicating to homebuyers who you are, how you’re different from your competitors, what you do, and WHY they should take the next step to contact you. A customer will not make the decision to hire you based on your website’s content, but you can be sure they will use it to rule you out!

Take an honest look at your company Step outside your owner’s perspective and assume the role of a buyer. What would impress them enough to engage in a conversation with you? When you evaluate your content, ask yourself, “So what?” What does this mean to your homebuyer? Is it enough to motivate them?

Your content is also important to SEO. When you regularly refresh the text and images on your website, the search engine bots and spiders consider your site to be more active than those static ones that have been sitting there getting stale for months. So, you boost your SEO by paying attention to the dynamics of your content, which includes the quality of it. Stock photos, untagged nonprofessional photos, and poorly written content, as well as a site without a strong video presence will only reduce your site’s effectiveness and poorly reflect on your brand.

4. CRM system

Customer Relationship Management is not a task you randomly dole out to an employee with other things on his or her plate. This is a full-time, high-level job that requires a carefully crafted CRM system that is managed by a dedicated professional. Your CRM focuses on communicating with inquiries, prospects, and buyers. Your staff can use this tool to stay on top of every task—phone calls, emails, and promises to send information. Your Online Sales Consultant relies on the CRM to establish and then build a relationship that culminates in setting the appointment for the on-site sales professional. Your CRM provides a platform for all communication, including scripts, email templates, calendars, reminders, and notes to drive each and every relationship. You should assign a monthly fee in your digital marketing budget for the CRM subscription.

5. Google AdWords and Re-targeting

Leverage the value of intelligently using this high-performing medium. You do not pay a penny unless someone clicks on your ad. The key here is to make sure you utilize an AdWords pro who can save you money by going after keywords that will attract the right inquiries. Remember, being #1 in the ad results is not your goal. When you come up in the second or third position, you spend less and gain the benefit of being in good company. If a prospective buyer sees the first ad, you can be certain yours will be just as visible. Achieving this goal requires the finesse of a professional who stays on top of your AdWords spend and monitors keyword usage on an ongoing basis.

6. Social media

Being #6 on the list doesn’t mean social media is an optional item in your digital marketing budget. Expand your reach and strengthen relationships through a carefully planned approach here. Facebook is the cheapest cost-per-click ad medium, but this incredible value will not so low for much longer. People—including your homebuyers—visit social media (especially Facebook and Instagram) every day. This is where they keep up with their friends, get their news, and SHARE their own news. Assign a social media budget for each community. (Customer Service on Social Media)

7. Third-party syndication sites (e.g., Zillow,, BDX)

Zillow is far and away the leader among third-party real estate search websites. It will generate a vast majority of your inquiries, when done correctly. Bear in mind that you can get lost in the vastness of builders here, so approach with care. and BDX (sister company of Realtor) are options for your budget, but focus your investment on Zillow. As with all digital marketing, this is a dynamic medium that requires ongoing supervision to deliver results.

8. Realtor event marketing

Don’t overlook the importance of courting Realtors. Plan a quarterly event to welcome them to your property for a seasonal gathering. Treat them like the VIPs they are. When you forget them, they forget you!

9. Signage

Of course, you need to invest in your new home community signs. Make sure they stay vibrant and visible. A faded sign says exactly that about your company. Matt Riley also suggests that you change the contact on all of your signs to your Online Sales Consultant, since this person is the one who will guide the initial inquiry.

10. Model home collaterals

Keep your brochures, on-site signage, and site plans up-to-date and looking professional. Don’t just write “Sold” on a homesite on your site plan. Don’t apply stickers to your brochures to cover an outdated item. Your brand is reflected in everything your homebuyers see. Consider adding digital signage in your model home, making it easier to update and enabling you to present a more impressive graphical presentation.

11. Buyer Events

Provide your prospective homebuyers with a reason to come to you. Invite them to a holiday party to see how festive the neighborhood looks. Sponsor a family fun day to demonstrate the friendliness and let them explore the amenities. Host a charity event to appeal to their desire to give back! Every event should be built around a purpose, and carefully executed to communicate your company’s and community’s value.

12. Community launches

If you plan to start up a new community next year, allocate funds for the launch—and invest in doing it right. Your Online Sales Consultant should schedule time to extend personal invitations to all people who have inquired (and follow up as much as necessary). This budget should include all the promotion (invitations, supplies, refreshments, signage, giveaways) required to make it a success.

13. R&D

Consider this line item as your miscellaneous opportunities. Digital resources change so quickly that you should make sure you have allotted funds when the opportunity arises.

Depending on your marketing budget history and the current state of your marketing tools (e.g., website, videos, collateral, digital advertising), you may only need to reallocate your funds, not invest more.

Spending Digital Dollars

Myers Barnes breaks it down in this quick video on how to spend your digital dollars:

Final Thoughts

Your digital marketing strategy must be carefully developed to integrate all the essential components. Builder Designs and BuilderIQ can help you plan, execute, and measure every aspect of your marketing, so you can see your opportunities to keep growing. Contact us to take advantage of our expertise in the building industry and our experience in generating trackable results.