Shifts in Brokerage Marketing Investments for 2018

by Deirdre LePera

On average, real estate brokerages spend 11 percent of their monthly budget on marketing and advertising. Pair that expense with technology (also at 11 percent)—because the two are intertwined for most firms—and it makes the overall expense second only to personnel costs (35 percent), and just about tied with brick and mortar costs (21 percent), according to “Evaluate and Improve Your Technology Spend,” REAL Trends, September 2016.

Given the size of the investment, REAL Trends recently surveyed the top brokerage leaders in the country to find out where they are investing their marketing dollars now and what changes they plan to make in 2018. Here is a look at our initial findings.

Budgets on the Move

On average, firms answered that their marketing budgets would increase by seven percent in 2018. A closer look at the data indicates a more modest bump with a median increase of just one percent. That is not to say that some brokerages did not have significant adjustments in mind for 2018. One firm anticipates reducing their marketing budget by 20 percent by moving to a different website provider. Another planned to increase their budget by 70 percent given their success with online advertisements on social media sites.

Trending Up

What has worked well for most firms in 2017 is anticipated to be a big focal point in 2018. Overall, firms selected company websites, yard signs and social networking sites as their most successful marketing tools. Firms are more likely to track return on investment from company websites and social networking sites than any other lead source. In 2018, firms plan to invest more money in social networking sites, online advertising and their company website. Take a look at the graph to see exactly what marketing tools brokerages find the most valuable and how many are planning on increasing their investment in those channels in 2018.

 Shifts in Brokerage Marketing Investments for 2018

Where the Cuts Will Happen

With a minimal change in budgets overall, an increase in spending in one area can’t come without a decrease in spending somewhere else. Print advertising is highest on the chopping block with 52 percent of firms indicating that they will reduce spending in this area first, followed by listing portal leads and direct mail campaigns. Print advertising ranked as the highest expense for firms, with a median spend of $25,000 a month. (Print advertising is represented by a median figure. The average monthly cost for print advertising was $71,021.) Other marketing investments like online advertising and company websites compared at an average cost of $11,750 and $11,506 a month respectively.

Plan to Spend Less on in 2018

52% – Print advertising (magazines, newspapers, etc.)

27% – Listing portal leads (Realtor.com, Zillow, Homes.com, etc.)

14% – Direct mail campaign

 Shifts in Brokerage Marketing Investments for 2018

When asked what was most likely to influence broker-owners to shift their marketing budget in 2018, the answers varied but the general idea was the same. Each is watching the market as well as their competition. They are paying closer attention to their return on investment especially when it comes to direct lead sources.