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Step by Step - Managing Your Advertising and Marketing Budget

Even though I now do mortgage for a living, marketing and advertising is the world I understand. I spent a lot of years in that field and once managed an annual media budget of $100 million. As such I fall back on it when I build my relationships with Real Estate Agents. One of the biggest issues I deal with is advertising budgets and how much an agent should spend on advertising.

As an agent, your marketing budget is going to be one of largest expenditure that you make towards building your business. Here's a formula and some tips that I've devised to help agents that I work with build:

Step 1: Establish Your budget

1. Start UP Agents: Your start up budget will be the budget that establishes you and gets your name out there. Set your income goals for the year and then budget for 30% of that gross income to go towards marketing costs. As your business grows this number should go down.

2. Established Agents: As your business grows your target advertising/marketing budget should be 10% of your gross commissions after the broker split.

For example: If your income goal is $100,000 for the year, established agents should budget $10,000 towards marketing costs for the year.

Step 2: Manage the Budget

Once you have established your budget, consistency and profitability of your advertising resources come into play. It is imperative that an agent be consistent and in front of your potential clients on a regular basis. A one time shot will not do the trick. Consistency is the name of the game.

You may want to budget $500 in slower months and $1000 in stronger months while still maintaining your budget. This is the strategy that I call fishing when the fish are biting. Resist the temptation to not spend advertise at all in a month.

Track, Track and Track again. DO NOT spend money on advertising that you cannot track directly back to the ad. Invest in an 800 number with different extensions or at minimum ask every client how they got your number. Keep a tally sheet that lists all your advertising resources and tally it.

If leads are not being generated from your advertising, don't use that resource again or check the creative content!

Posted by Kate Bourland; Redding Mortgage, Loss Mitigation, Money Merge Accounts on 10/30/2007 02:05 PM

Comments (8)

real estate advertising, real estate budgeting, real estate marketing

Post is included in group: Marketing Results

8 Comments on Step by Step - Managing Your Advertising and Marketing Budget

Plain common sense, but excellent to be reminded of these steps! Thanks!

10/30/2007 02:16 PM

by Ronald Gillis, CNSA Southwest Florida Notaries, Port Charlotte, 941-7-NOTARY (Southwest Florida Notaries (Mortgage Notary Signing Agent))

Great tips, Kate. This would seem to apply to many business's. Thanks.

10/30/2007 02:31 PM

by Michael Tarabotto (Certified Appraiser) Santa Clarita, San Fernando, Westside (California Appraisal Solutions Corp.)

Kate, this was great information, and thanks for sharing.

10/31/2007 12:49 AM

by Gary Miljour - Mortgage Lending for Tempe Arizona (Cherry Creek Mortgage Company)

Ron, thanks for stopping by. This blog post started out much to be much longer, but I opted for short, sweet and common sensical!

Michael, as always good to see you.

Gary, you're welcome.

10/31/2007 10:28 AM

by Kate Bourland; Redding Mortgage, Loss Mitigation, Money Merge Accounts (Windsor Capital, Dyer Beech & U First Financial)

great tips Kate -

let me ask you - do you have any experience in radio? How long of a commitment do you think is necessary until you get a return?

10/31/2007 11:08 AM

by Open Mortgage - Lewis Poretz

Yes I have experience in radio. If you are not getting an immediate return either your content is not asking for the phone call or you are reaching the wrong target audience. For all intents and purposes, people in all aspects of the real estate profession require what is called direct response advertising. Direct response means that the ad is not particularly creative or pretty, but that it contains a strong call to action in terms of telling the consumer to do something. You've heard the tag lines "Pick up the phone and call", Call Today, Limited Offer, Offer Ends such and such a date - etc.

Radio and television have what's called a reach and frequency. Frequency means how many times a prospect hears an ad, Reach refers to the total number of people who hear the ad one time. Both are important but frequency is most important. On average a prospect needs to hear your ad at least 3 times before it registers.

Concentrate your radio ads in a single part of the day, if you can afford it you don't want run of schedule.

My rule of thumb is that I haven't gotten a lead in two weeks the resource doesn't work or you need to change the copy.

Does that make sense?

10/31/2007 11:23 AM

by Kate Bourland; Redding Mortgage, Loss Mitigation, Money Merge Accounts (Windsor Capital, Dyer Beech & U First Financial)

Kate, wise and sage advice. In this market it's quite costly to throw good money after bad.

10/31/2007 07:16 PM

by Andrew J. Lenza (ABR*GRI*MBA) Monmouth County NJ Real Estate Broker (Andrew J. Lenza Realty)

Andrew, thanks for the comment. I have to laugh, the most common comment that I get is that my words and advise are "wise". Am I really getting that old? lol.

11/01/2007 08:24 AM

by Kate Bourland; Redding Mortgage, Loss Mitigation, Money Merge Accounts (Windsor Capital, Dyer Beech & U First Financial)