This month we published the results of our extensive study Generating New Business in Real Estate. We polled nearly 400 brokers, agents, marketers, and owners to discover exactly where they invest their marketing dollars, how they generate new business, and their best marketing practices. Read our full White Paper here. In this post, we'll take a closer look at the marketing budget of a typical real estate business. Where is this group spending their largest portion of marketing dollars and where are they seeing the best results?
Looking at the Group Overall
We asked the group to rank their marketing spend based on 10 categories, with #1 being where they spent the most marketing dollars and #10 where they spent the least. The choices offered were:
- Social Media Marketing
- Maintaining / Updating a Website
- Purchasing Leads
- Drip Marketing through a CRM
- Pay-Per-Click Advertising like Google Ad Words
- Other types of Advertising
We then paid close attention to which segment was ranked #1 in the group, implying that this category received the largest portion of their marketing budget. Here were the results from the overall group:
Where is the largest portion of a typical marketing budget spent?
The majority of respondents said the #1 place they spend marketing dollars is buying leads. For most, buying leads takes the biggest portion of their annual marketing spend. A significant number of respondents (17%) said the largest portion of their marketing budget went to social media marketing. None of the other options came close in terms of ranking #1.
Our respondents included real estate marketing professionals, agents and brokers. We wanted to compare how each group spent their marketing dollars to see if there were any noticeable differences between the groups. Here's what we found:
Where is the largest portion of a real estate agent's marketing budget spent?
A larger portion of agents said they spent the lion's share of their marketing budget on social media marketing. 35% of agents who participated in our survey said that was the item that received the largest share. 20% of agents said they spent the most on purchasing leads, significantly less than the group at large. A larger portion of real estate agents claimed that branding got the largest portion of their marketing budget at 8%. In the "other" category, respondents mentioned things like "informational packets" and "handouts" as part of their face-to-face showings as another place they spent a large amount of marketing.
Next, we looked at brokers. We were curious with how brokers and owners spent their marketing dollars and how it compared to the group at large.
Where is the largest portion of a broker / owner's marketing budget spent?
58% of broker / owners said the largest part of their marketing budget went to purchasing leads, inline with the group at large. The second largest group at 14% said they spent the largest amount on social media marketing. The broker / owners seemed to line up with the group at large in terms of where they put the biggest priority with their marketing. Later in the survey, we asked what the respondents' what they were concerned about for 2017. 64% of broker / owners listed "getting more leads" as a "big concern" for 2017. It seems like where they spend and where they are focused are fairly consistent. Broker / owners are concerned with getting more leads to their agents.
Finally, we looked at the marketing group. We had quite a few real estate marketers participate in the survey and wanted to find out if they differed in their marketing spend and prioritization when compared to the other groups. Here were the results:
Where is the largest portion of a marketer's budget spent?
Two interesting things about these results: first, the overwhelming majority of marketers said the #1 place they spend their budget is on purchasing leads. This was at a greater number than the other two groups. Second, there were several categories that got 0% including flyers, pay-per-click advertising and "other." This was by far the most consistent group.
Overall, the three groups spent the largest portion of their marketing budget on leads, followed by social media marketing. Agents were the only group that had a majority spend the most on social.
In addition to looking at where respondents spent the largest portion of their marketing budget, we also wanted to find out what category received the smallest portion of their collective budget. What we found was that traditional advertising in any shape, way or form received little to no marketing dollars based on these results. 84% of respondents did not spend any money there and those that did ranked it very low on their list.
We also found that pay-per-click advertising was less emphasized. It wasn't ranked as low as advertising, but 73% of respondents ranked PPC at 8 or below when ranking how they prioritized their marketing spend. Out of 10 categories, it didn't fare well. Pay-per-click advertising like Google Ad Words has grown incredibly expensive for real estate in the last 5 years. Perhaps it's become prohibitively expensive for some real estate professionals or perhaps they get a better return on some of the more popular tactics like social media marketing or purchasing leads.
If you are interested in finding out more about how real estate professionals generate new business, download our complete white paper today by filling out the form below.