How Much Should a Construction Company Spend on Marketing & Advertising?

What's your marketing budget? How much of your revenue should be channeled into marketing and advertising? These are crucial questions for construction companies aiming for growth. The Small Business Association recommends that companies with under $5 million in revenue should spend 7-8% of their revenue on marketing. This number varies by industry. For instance, remodeling companies might only need to spend 3-5% of their revenue on marketing. Companies in specialty trades, on the other hand, might need to spend a little more than average and allocate 8-12% of their revenue to their marketing budget. In this blog, we will outline more details about your marketing budget and how it should be spent. 

In the video above, Spencer discusses the marketing budgets for home building, remodeling, and contracting businesses. How much should a marketing budget be? What should the marketing budget actually fund? For more videos like this, check out and subscribe to our YouTube channel!

Why Construction Companies Need A Marketing Budget?

Many contractors, remodelers, and home builders often lean heavily on word-of-mouth marketing. While it's valuable, this approach alone isn't always reliable for long-term sustainability. Imagine if those referrals start dwindling – it could become challenging to attract new clients. This brings us to an essential question: Are your project rates structured to support a robust marketing budget? Let's say you're currently setting aside just 1% of your revenue for marketing; this might be a sign that your pricing strategy needs a tweak. Adjusting your rates could be the key to unlocking a more substantial marketing budget, ensuring your business continues to thrive and grow.

Where Should Construction Companies Spend Money on Marketing?

Once you have a healthy marketing budget in place, you're probably wondering what you should be spending it on. Here are some of the line items that you should consider for your marketing budget. 

• Website
• Social Media
• Advertising
• Apparel
• Truck Wraps
• Signage
• Marketing software
• Training or education
• Salary for a marketing manager or agency

Your Marketing Budget Based on Your Goals

You should be basing your marketing budget on the goals for your revenue rather than your current revenue. For instance, if you are at $1.5 million in revenue but want to reach $2 million, you should base your marketing budget on the $2 million goal. With that $2 million revenue goal, budget 4% of it for marketing. This would give you $80,000 for your marketing budget. Here is a sample breakdown of how you could allocate your marketing budget:

Example Annual Construction Marketing Budget

• Website: $1,000
• Website Marketing (Content, Blogging, Social Media, SEO, Videos): $40,000
• Marketing Software: $5,000
• Branded Apparel: $1,000
• Truck Wraps and Signage: $5,000
• Client Gifts: $2,000
• Events: $10,000
• Advertising: $12,000
• Other/ Miscellaneous: $4,000

You can modify this list based on what you've done in the past or what you're currently doing. Tailor your budget to allocate more to successful categories. If you've seen positive results in one of these categories, you might want to allocate more money to that area. If you have not been seeing great returns from some of these areas, you could think about decreasing the budget in that area. Overall, make sure that you are tracking the money that you spend and the returns that you are receiving from each area to evaluate how you should adapt your marketing budget over time for your company. 

Marketing Trends in Construction

Here's an even deeper look at the marketing landscape for construction companies so you can build your personalized plan. The evolving nature of marketing in the construction industry emphasizes the need for a dynamic, multi-faceted approach that harnesses the power of digital tools while focusing on sustainability and customer engagement. By adapting to these trends, construction companies can enhance their market presence and build stronger relationships with their clientele. Here’s an overview of the key trends shaping construction marketing today.

1. Digital Transformation

   • Online Presence: A strong online presence, including a responsive website and active social media profiles, is now essential.
   • Mobile Optimization: With increasing mobile internet usage, ensuring your website and content are mobile-friendly is crucial.

2. Content Marketing

   • Educational Content: Providing value through informative blogs, eBooks, and how-to guides can establish you as an industry authority.
   • Video Content: Videos showcasing project progress, testimonials, or expert interviews are increasingly popular for engagement.

3. Social Media Marketing

   • Platform Diversification: While Facebook and Instagram remain popular, platforms like LinkedIn are gaining traction in the B2B construction space.
   • User-Generated Content: Sharing content your clients create, like reviews and photos, can boost credibility and trust.

4. Sustainability and Green Building

   • Eco-Friendly Practices: Marketing your commitment to sustainability can differentiate your brand, as eco-consciousness is a growing trend among consumers.

5. Technology Integration

   • Virtual Reality (VR) and Augmented Reality (AR): These technologies are great for virtual tours of projects, enhancing client engagement.
   • Drones: Drone footage for project showcasing and progress tracking is becoming increasingly popular.

6. Customer Relationship Management (CRM)

   • Personalized Marketing: Leveraging CRM data for personalized communication ensures more targeted and effective marketing campaigns.

7. Data-Driven Decision Making

   • Analytics: Utilizing data analytics tools to understand customer behavior and measure campaign effectiveness is essential.

8. Local SEO

   • Geo-Targeting: Focusing on local SEO ensures your business shows up in search results for people in your service area.

9. Online Reviews and Reputation Management

   • Trust Building: Actively managing online reviews and responding to feedback can significantly impact your brand reputation.

10. Partnership and Networking

    • Collaborations: Partnering with local businesses and influencers for cross-promotion can expand your reach.

Determining how much a construction company should spend on marketing isn't a one-size-fits-all answer. It depends on your company's revenue, goals, target audience, and the specific dynamics of the construction industry. The key is not just the amount you spend but how effectively you use it. By investing wisely in a mix of digital and traditional marketing strategies, aligning with industry trends, and tailoring your approach to your unique audience, your marketing budget, regardless of its size, can yield substantial returns. Here's to building a robust marketing strategy that drives your construction business forward!