Some construction companies still rely on word-of-mouth to attract new customers. Or they might even put up some low-effort ad placements here and there.

This is a problematic and unsuccessful promotional strategy that no longer yields results in the long run. Oftentimes, it might even affect your short-term goals.

This becomes apparent when you take into consideration that your competitors are actively setting aside budgets for marketing, yielding great results, becoming household names, attracting different populations, and remaining relevant.

This is why a marketing and ads budget for construction companies is a must.

How to plan the marketing budget for a construction company

The question of how to calculate a marketing budget for a construction company cannot be answered simply, as many aspects need to be taken into consideration and applied on a case-by-case basis.

One construction company may increase marketing efforts to try to scale up its operations, while another may make use of marketing to enhance its brand visibility within a specific location.

But, overall, the following steps can be followed to be able to appropriately plan for an effective marketing budget: 

Discover your competitors and their marketing strategy

Keep close tabs on your competitors and perform a deep analysis of their marketing strategies. Identify who they are, and aim to understand what is working for them and what is not. Use such platforms as SimilarWeb, SpyFU, SemRush. They provide a lot of useful information about your competitors’ marketing approach.

Attempt to find out where the bulk of their clients are coming from, which changes they are undergoing, the rough estimates of the budgets they are allocating, the efforts they are putting on social media, and so on.

Once you have a clearer perspective of their methods, you can get inspired and have a conceptual base from which you can start planning. 

Define the ads channels for your marketing strategy

A handful of examples of ad channels for marketing are promotions on social media platforms, event marketing, search engine advertisement, and radio advertising.

You have to understand your target audience and how you can reach them to be able to recognize which ad channels you will need to focus on.

Google Ads, Meta ads or Yelp ads require different efforts to be put into developing ads and content for, meaning that each channel also has distinct needs when it comes to budgeting. 

Launch A/B testing campaign and start with law sum. For social media advertising, you can start with $10/day per target audience.  For Google Ads, the budget will depend on your keywords and CPC.

For example, to get 50 conversions that potentially will bring from 2 to 5 clients per month, the construction company from New York will have to plan $2K of Google Ads budget. The CPC in this case will be $2. (data is taken from Google Ads manager)

Calculate your operation cost

Operation costs vary widely from one construction company to another based on the specific field they focus on, the geographic location they focus on, the types of projects they take on, and the size of the company.

It is important to keep track of operation costs to be able to better calculate how much can be allocated to marketing.

Understanding your operational costs helps put the marketing budget in perspective and keep it to an acceptable limit. 

Define primary KPI

A KPI is a key performance indicator, which is a milestone that helps a company understand whether they are advancing in their strategies and their plans.

In the sphere of marketing, this translates to objectives and targets from the marketing campaigns. These may include a quantifiable measure of the leads that have converted or the traffic being attracted to the site or a social media page.

Your company must establish a set of KPIs that will serve to recognize which goals need to be met and when. These indicators assess whether the strategies that were developed are heading down the right path or not.

Plan marketing budget accordingly based on the conducted analysis

Analysis of several aspects should be done prior to coming to a final conclusion about your marketing budget.

Besides calculating the operational costs and defining your KPIs, you should also conduct an analysis of your current and expected performances, the market and the niche, and the target audience and competitors.

Having a more in-depth and extensive understanding of these aspects as a result of your analysis helps you make well-informed decisions and plan an appropriate marketing budget. 

An ads budget for contractors can be calculated after thoroughly analyzing important parameters, like your operational costs and profit, and after analyzing your competitors, and establishing the ad channels you want to focus on and your personal KPIs.

A marketing budget is crucial to set so as not to go overboard with the spending and to avoid not using the maximum potential of tools that you can afford.

With realistic goals, an appropriate budget, and lots of effort, marketing can be the only thing standing between your small construction company and the ability to significantly scale up.