If you never had a great, measurable marketing strategy for your construction business – a top investment that returns a quantifiable ROI, then you probably have no idea about the marketing budget, how to create it, or how much you need to allocate.
Creating a budget for your construction company is important as ever, especially when you want to make the most of your marketing dollars.
Determining what is a reasonable marketing budget for your construction business does not have to be a huge undertaking.
So, if you are simply looking for a great place to start, this blog will give you insights on breaking down your marketing budget properly and reasonably.
A Breakdown of Your Construction Marketing Budget
7 to 10% is the benchmark industry rate you should allocate for your marketing budget. Let’s just say your construction company brings about 5 million dollars in revenue, so by calculation, your marketing budget must be between $350,000 and $500,000. If you hear the news, between 2020 and 2021, there was a 14% growth rate in digital marketing budget spending across businesses. So this 2023, expect that expenses are growing and expanding. That is why there is a reason behind allocating the budget properly and smartly has become a priority for anyone who wants to invest in digital marketing.
A common pitfall of a newly created marketing budget is jumping right into the tactics before setting goals or outlining a marketing plan. And this is where you need to be most careful. If you are unsure where to start with your budget allocation, a great guideline to follow is the 70-2-10 rule.
Using this rule as your benchmark, your marketing budget will result in the following distributions:
- 70% of your marketing budget is allocated to the strategies that work well and will result in huge ROI
- · 20% of your budget is allocated to a new marketing strategy aiming at helping you grow
- 10% of your marketing budget is allocated to other experimental strategies
When it comes to digital marketing strategies, a couple of these work best for the construction landscape. Take a closer look at the following:
- Website Design and Development
- Search Engine Optimization
- Social Media Marketing
- Content Creation
- Email Marketing
- PPC ads
- Consumer-focused, GEO-targeted campaigns
- Video marketing, etc.
Other marketing strategies for growth that you may consider:
- Audio (Podcast)
- Value-add strategies
- Emerging and new digital channels
- Improve led gen strategy with Google Analytics 4
- Thought-leadership strategies
Remember this: There is no hard and fast rule for your marketing budget allocation, how you wish to spend it, or how much. However, if you want to thrive more and achieve continuous success in your marketing efforts, you must be open to new things and always be flexible.
Three Marketing Budgeting Strategies You Must Know
In construction, three new strategies are generally used to figure out the “sweet spot” of the marketing budget. They are as follows:
- Revenue-based: One effective way to determine your marketing budget is to evaluate your annual revenue sheets and lay aside a percentage. You can then apply the 7-10 percent spend and break it into the 70-20-10 rule. But, depending on your business lifecycle, the percentage can be higher, especially for newer business ventures.
- Competition-matched: If your construction business has direct competitors and your goal is to surpass them, you must match their marketing efforts. For instance, do your competitors have their brand logo plastered on their trucks? Or have they done sponsorships to get their brand exposure? If they do all of these, you must get into the arena and surpass them in branding and marketing.
- Goal-driven: With goal-focused marketing, you must determine goals and set the perfect budget. Goals that are based on your website performance, resources, and even market size constraints determine your marketing strategies. Upon determining these goals, you will then assign a monetary value to every goal.
How to Stay in Control of Your Marketing Budget
While we give you a breakdown of what your marketing budget should look like, in this section, we want to give you tips on how to control your marketing budget. This is very applicable and helpful, especially when starting your campaign.
1. Define and follow the best marketing strategy
Your biggest goal is to create impactful marketing campaigns and get your desired results. However, before you contemplate that, you must revisit your entire business goals and assess each. It is important that you learn to categorize what goals you need to prioritize first, what should come as second, and what goals you have to let go of because they do not give you the exact results you need.
When this part is settled, you finally have to create your marketing plan – where your brand, position your brand, determine your target audience, and so many others.
2. Take inventory of your digital marketing spend
To maximize your current marketing spend, you need to know exactly how much you are spending and what tactics are being spent on. Several common costs include advertising, sponsorships, and content creation, including blogs, website design, video content, social media, and thought leadership.
One of the largest expenses you will deal with includes email marketing tools, analytics tools such as Google Analytics, social media management platforms, cloud storage, and more. The point is that you must consistently track how much you spend for any of these each month and, most importantly, how much they are being used.
3. Measure the results
Once you have set your marketing plan and budget, measuring the results is the next thing you do to determine whether your strategy is working. This is where KPIs or Key Performance Indicators are used. KPIs are measurable values that you must use in tracking the goals you have set. While KPIs differ based on the industry and company, a few metrics are universal. For construction marketing, here are some KPIs you have to track:
- Website Traffic Channel
- Page views
- Returning Visitors
- Cost per lead
- Conversion rate
- Click-through rate
- Customer Acquisition Cost
- Customer Lifetime Value
4. Set a test budget
Setting a test budget is ideal to ensure you are at least in control of your budget and that your marketing efforts will live up to their fullest potential. Companies often allocate 10 to 20% of their digital marketing budget to testing.
The key here is to strike a balance – you do not want to spend your whole marketing budget on one marketing channel, but if you spread your budget across too many channels, you will not see the best results.
Sounds confusing, right? And it is. So, as a starting point, we suggest you dive into the digital marketing benchmarks across your sector. Doing so will give you some key points as to how you should be spending on testing some specific channels.
5. Use seasonality to your advantage
Another strategy we want to share with you is to use seasonality to your advantage. Your digital marketing plan for a year should be divided into quarters. Coming from our top marketers here at ConstructionMarketing.io, not everyone knows that every period has its highs and lows. And by simply understanding seasonality, you can have a greater chance of making the most out of your marketing budget and expenses all year round.
- Q1: Generally speaking, this is the slowest quarter of the year. Everyone seems eager to spend less after the massive spending on expensive occasions and holidays (Christmas, Thanksgiving, Black Friday, and New Year). This is a perfect time to experiment with new digital marketing strategies and conduct A/B testing on new ads.
- Q4: This is the high-traffic period of the year! Take advantage of this season by increasing your expenses while traffic increases, and you can save money during the new year. Holidays, on the other hand, provide the best opportunity for seasonal marketing. So, make sure to plan for some major events every quarter to be timely and relevant to your main audiences.
Kickstart your 2023 Marketing Budget with ConstructionMarketing.io
To conclude, the perfect digital marketing budget for your construction business is never finalized. But one best takeaway from this is that for as long as your long your marketing budget is in control and optimized (by following the tips we share) as well as your efforts are being put towards the right marketing channels and campaigns, then you will get more leads, more sales, and higher revenue.
So, what is your take on all of this? You could tell that marketing budget allocation is no small feat, right? And if you are having trouble allocating and prioritizing your marketing budget and expenses, our team here at ConstructionMarketing.io is happy to help!
At ConstructionMarketing.io, we combine our digital marketing expertise with creativity and data to help you achieve your goals within budget. But first, we make sure your budget is aligned with all your lead acquisition goals. Here are some critical points we consider when setting up your budget!
· Determine your marketing and business goals
- Establish your sales cycle
- Know your outside costs
- Determine the marketing strategies best for your business
- Understand your market (We have a strong background in construction. So it is safe to say we know everything)
- Research strategy prices