How much should a Home Builders spend on marketing?

home builder marketing budget estimate

How do home builders differentiate themselves and attract potential buyers in today’s competitive real estate market? With so many alternatives available, what distinguishes one builder from another? The answer is effective marketing. A well-thought-out marketing plan not only increases brand visibility but also promotes sales and growth.

Imagine reaching out to your target buyers at the exact moment they are looking for their dream house or engaging them with interesting material that highlights your unique offerings. With a high level of risk and significant expenses involved in home construction, knowing how much to spend on marketing and how to deploy that cash efficiently can be game-changing.

Let’s learn how to get the most out of your investment and examine the aspects that influence your marketing budget.

What is the Appropriate Budget for Home Builder Marketing?

Choosing the appropriate marketing budget is essential for home builders to reach their target audience and drive sales effectively. In this section, we’ll examine industry norms and benchmarks to assist you in making more informed marketing resource allocation decisions. We’ll also discuss the various components of a marketing budget and the elements that affect your spending.

Industry Standards and Benchmarks

Understanding industry standards and benchmarks is essential for determining the appropriate marketing budget for your home building business. While there is no one-size-fits-all solution, there are some recommendations that can help you make sound selections.

According to industry experts, home builders should typically allocate between 1% and 3% of their total revenue to marketing efforts. This range takes into account the unique challenges and opportunities within the home building sector, such as the high value of each sale, the longer sales cycle, and the need for targeted, personalised marketing campaigns.

For example, let’s consider a home building company with an annual revenue of $20 million. Based on the industry benchmarks, their marketing budget would fall within the following range between $200,000 and $600,000 for their annual marketing efforts, depending on their specific goals, target audience, and market conditions.

It’s important to note that these benchmarks serve as a starting point and should be adjusted based on various factors, such as the size of your company, your target market, and your growth objectives. For instance, if you’re operating in a highly competitive market or aiming for aggressive growth, you may need to allocate a higher percentage of your revenue to marketing to achieve your goals.

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Breakdown of Marketing Budget

Allocating your marketing budget effectively is essential for increasing your Return On Investment and meeting your business objectives.

Digital Marketing (50–65% of Budget)

Digital marketing encompasses a broad range of strategies designed to increase the builder’s online presence, engage with potential buyers, and generate leads through various online channels.

Allocating 10-20% of the marketing budget to website development and maintenance ensures that the builder’s website is not only initially well-designed but also continually updated, user-friendly, and optimised for search engines and conversions. This investment guarantees that the website remains an effective tool for attracting and retaining potential buyers.

Additionally, spending 10-15% on search engine optimisation (SEO) focuses on enhancing the website’s visibility in search engine results pages (SERPs). Techniques such as keyword optimisation, content creation, and backlink building are employed to improve rankings and drive organic traffic.

Pay-per-click (PPC) advertising, allocated 10-20% of the budget, involves placing targeted ads on search engines or social media platforms and paying a fee for each click. This strategy generates immediate traffic and leads, offering quick results for the builder.

Content marketing, which takes up 5-15% of the budget, involves creating and distributing engaging content like blog posts, articles, and videos. This content, shared through email marketing campaigns and newsletters, helps attract and educate potential buyers, positions the builder as a thought leader, and boosts search engine rankings.

Lastly, social media marketing, also accounting for 5-15% of the budget, entails creating and sharing content on platforms such as Facebook, Instagram, and Twitter. This approach engages potential buyers, builds brand awareness, and drives traffic and leads to the website.

Traditional Marketing (20% of Budget)

Traditional marketing tactics, allocated 20% of the budget, encompass a range of offline strategies tailored to reach specific audiences. This includes print advertising, direct mail campaigns, outdoor advertising, events, and sponsorships. The budget should be equally allocated, i.e., 5% for each.

Print advertising in local newspapers and magazines effectively engages potential buyers who prefer traditional media platforms.

Direct mail campaigns leverage physical promotional materials like postcards or brochures to reach potential buyers’ mailboxes directly, fostering lead generation and brand awareness.

Outdoor advertising, including billboards and signage strategically placed in high-traffic areas, amplifies brand visibility to a wide audience.

Additionally, events and sponsorships provide opportunities for the builder to showcase properties, forge connections with potential buyers, and foster community engagement, ultimately enhancing brand reputation and market presence.

Branding and Design (10% of Budget)

Branding and design, allocated 10% of the budget, play a pivotal role in shaping the builder’s identity and perception among potential buyers.

A significant portion (5%) is devoted to brand identity development, focusing on crafting a distinctive brand image through elements like a memorable logo, consistent brand colours, and compelling messaging. This process aims to set the builder apart from competitors and instil trust in prospective buyers.

The remaining 5% is dedicated to design, encompassing the creation of visually captivating marketing materials such as brochures, flyers, and signage. Through strategic branding and design initiatives, the builder can establish a strong presence in the market and effectively convey their value proposition to target audiences.

Market Research and Analytics (5% of Budget)

Market research and analytics are allocated around 5% of the budget. It is essential for making educated decisions and developing strategic plans. Customer surveys and feedback collecting help the builder identify buyer preferences, demands, and problem spots, allowing for more targeted marketing efforts and increased customer satisfaction.

Investing in marketing analytics solutions simultaneously will enable you to evaluate and analyse campaign performance, calculate return on investment (ROI), and make data-driven changes to improve marketing strategy. Together, these techniques ensure that marketing efforts are in line with client expectations and effectively contribute to the builder’s objectives.

Also read: Top 16 Digital Marketing Tips for Home Builders to Stand Out in 2024

Factors Influencing Marketing Budget

Determining the right marketing budget involves considering several key factors:

Company Size and Annual Revenue

Larger companies with higher revenues generally have more resources to allocate to marketing. These companies can afford comprehensive marketing campaigns that include both digital and traditional strategies. Conversely, small businesses or startups should focus on high-ROI, cost-effective digital marketing methods. Regardless of size, all builders need to ensure their marketing spend is proportional to their revenue to maintain financial health.

Market Competition and Target Audience

The level of market competition has a significant impact on how much a home builder should invest in marketing. In highly competitive marketplaces, builders must invest more to distinguish themselves from their competition. It is also vital to understand the tastes, behaviours, and demographics of your target audience. For example, if a builder’s target demographic is primarily millennials, investing in social media marketing and online advertising might be more beneficial.

Marketing Objectives and Target Growth Rate

The marketing budget will be determined by specific marketing objectives, such as increasing sales, generating leads, or enhancing brand awareness. Builders who want to expand quickly may need to make more aggressive marketing investments to meet their goals. Conversely, developers who prioritise consistent, long-term expansion should set aside a smaller but more carefully thought-out budget.

Previous Marketing Results and ROI

Examining previous marketing performance and return on investment can reveal what works and what doesn’t. This historical data can help with future budgetary decisions. If some tactics have worked in the past, it can make sense to invest additional money in those areas. Conversely, low-return techniques must be reevaluated or improved.

If a builder’s past marketing campaigns have generated high engagement and conversion rates, they should consider increasing their investment in this area. Likewise, if print ads in local newspapers haven’t yielded significant leads, those funds might be better allocated to digital efforts.


Creating a well-thought-out marketing budget is critical for home builders hoping to succeed in today’s competitive industry. Builders can successfully allocate resources by taking into account aspects such as firm size, market dynamics, and industry benchmarks. With proper plans in place, backed by data-driven insights and a focus on long-term growth, home builders can capture new opportunities and attain long-term success in the constantly evolving real estate market.

At DMC Marketing, we understand the unique challenges and opportunities in the home-building industry. Our tailored solutions and proven strategies can help your business stand out, attract potential buyers, and achieve sustainable growth. Contact us today to explore how we can elevate your marketing efforts and drive success in the competitive real estate landscape.

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