As builders and contractors plan their budgets for 2025, it’s essential to understand how much to allocate for marketing to ensure sustainable growth. A typical B2B construction firm spends between 1 percent and 5 percent of its total revenues on marketing. In fact, according to market research firm Gartner’s 2024 CMO Spend Survey, marketing budgets as a percentage of company revenue averaged 7.7 percent in 2024, down slightly from the prior year
However, the percentage can vary based on factors like the firm’s size, competition in the market, and business goals. The key is to invest wisely across the right marketing channels to maximize your return.
In this guide, we’ll break down your marketing budget into four core areas:
- Paid – Largely Traditional and Digital Advertising
- Earned – Public Relations and Other Third Party Endorsements
- Owned – Websites; Collateral; Stationery; Promotional Items
- Shared – Primarily Social Media Marketing
- Marketing Technology – Tools and technology used to deliver messages to targeted audiences with clear calls to action
- Operations – Initiatives that support the delivery of the above
- Staffing – Internal and third-party, fractional resources to deliver the results of your marketing plan
- Paid Media: Direct Investment in Results
Paid media refers to advertising efforts that you invest in to generate immediate visibility and leads. This is essential for reaching specific audiences quickly, especially during important business cycles.
Examples of Paid Media:
- Google Ads: Target search intent with pay-per-click (PPC) advertising.
- Social Media Ads: Use platforms like LinkedIn or Facebook to reach B2B clients or homeowners.
- Industry-Specific Ads: Paid placement on platforms relevant to construction (e.g., Houzz, BidClerk).
Budgeting Considerations:
- Allocate 15-25% of your marketing budget to paid media.
- Metrics to Watch: Cost per lead (CPL), return on ad spend (ROAS), and conversion rates.
- Earned Media: Building Credibility through Publicity
Earned media includes any exposure you gain through unpaid channels, such as PR coverage, reviews, and customer testimonials. It is a powerful way to build brand credibility.
Examples of Earned Media:
- PR Coverage: Media mentions in industry journals or local publications.
- Client Reviews: Positive feedback on Google, Yelp, or industry-specific review platforms.
- Awards and Certifications: Highlight industry recognition.
Budgeting Considerations:
- Allocate 5-10% of your marketing budget to earned media.
- Metrics to Watch: Media coverage, review volume and sentiment, and website referral traffic.
- Owned Media: Building Long-Term Assets
Owned media is any content or platform your business controls, such as your website, blog, or email marketing campaigns. It’s the foundation of your marketing strategy, allowing you to engage directly with your audience.
Examples of Owned Media:
- Website: A fully optimized, mobile-friendly website that represents your services.
- Email Marketing: Regular newsletters and updates sent to your subscribers.
- Content Marketing: Blogs, case studies, and white papers that provide valuable insights to your audience.
Budgeting Considerations:
- Allocate 15-25% of your budget to owned media, focusing on assets that provide long-term value.
- Metrics to Watch: Website traffic, SEO rankings, email open and click rates, and content engagement.
- Shared Media: Engaging with Your Audience
Shared media includes any content distributed through social networks or online communities. Engagement in these areas can help build relationships and foster client loyalty.
Examples of Shared Media:
- Social Media Accounts: Posting project updates and engaging with clients on LinkedIn, Facebook, and Instagram.
- Community Involvement: Participating in relevant forums or industry discussion groups.
Budgeting Considerations:
- Allocate 10-15% of your budget to shared media.
- Metrics to Watch: Engagement rates (likes, shares, comments), follower growth, and referral traffic from social media.
- Marketing Technology: Tools for Efficiency and Optimization
Marketing technology (martech) includes the software and tools you use to deliver and track your marketing efforts. Martech investments help automate processes, increase efficiency, and provide data-driven insights to refine your strategy.
Examples of Marketing Technology:
- CRM Systems: Tools like Salesforce or HubSpot for managing leads and customer relationships.
- Email Automation: Platforms that streamline email marketing campaigns.
- Analytics Tools: Google Analytics, SEMrush, or other tools for tracking the performance of your marketing efforts.
Budgeting Considerations:
- Allocate 10-15% of your marketing budget to martech investments.
- Metrics to Watch: Platform usage rates, data accuracy, and the ROI from automation tools.
- Operations: Supporting the Delivery of Marketing Initiatives
Operations support the execution of your marketing initiatives, ensuring that your strategies are implemented smoothly. This includes costs associated with project management, communication tools, and internal processes.
Examples of Operations Initiatives:
- Project Management Tools: Platforms like Asana or Trello to manage campaigns.
- Internal Communication Systems: Tools like Slack or Microsoft Teams to ensure efficient coordination.
- Workflow Processes: Implementing standardized processes for campaign execution.
Budgeting Considerations:
- Allocate 5-10% of your marketing budget to operations.
- Metrics to Watch: Project delivery times, operational efficiency, and internal team productivity.
- Staffing: Internal and Fractional Resources
Your marketing team plays a crucial role in implementing your strategy. This includes internal staff as well as any third-party or fractional resources that help manage campaigns, content creation, and marketing operations.
Examples of Staffing:
- In-House Staff: Marketing managers, content creators, and social media coordinators.
- Fractional Resources: Fractional CMOs, external consultants, or specialized marketing agencies.
- Third-Party Vendors: SEO specialists, content writers, or web developers hired on a project basis.
Budgeting Considerations:
- Allocate 10-20% of your marketing budget to staffing, depending on your internal vs. external resource mix.
- Metrics to Watch: Employee productivity, project completion rates, and overall marketing ROI.
Final Thoughts: Allocating Your Budget Wisely
A well-balanced marketing budget should reflect your company’s goals and market conditions. Here’s a suggested breakdown:
- Paid Media: 15-25%
- Earned Media: 5-10%
- Owned Media: 15-25%
- Shared Media: 10-15%
- Marketing Technology: 10-15%
- Operations: 5-10%
- Staffing: 10-20%
This structure ensures that you’re investing in both immediate results (e.g., paid and shared media) and long-term growth (e.g., owned media and martech), while also maintaining the necessary infrastructure and team to support your initiatives.
To get started on your 2025 strategy, request your Digital Marketing Snapshot Report to gain insights into your current marketing performance and discover areas for optimization.
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