Every community has a limited amount of funds that they can spend on advertising.
For example, luxury lease-ups will oftentimes have a much higher marketing budget than Class C properties. But, whatever your community’s budget is, you need guidelines in place for how you plan to spend that budget.
Otherwise, the money will be mismanaged and you’ll either fail to use it all and miss out on leases, or you’ll overspend and not have money left in the budget for when you need it most.
So, how can you manage an ad budget well? In this post, we will outline three principles to help you maximize your ad budget and feel successful all year long.
1. Focus on dynamic advertising channels rather than static ones.
We have laid out many reasons for why dynamic advertising is preferred in our older posts. (LINK) But, for budget management purposes, this idea might seem counter-intuitive at first.
After all, it’s easier to manage a budget if you have fixed expenses each month, right?
The problem is that ease is not the standard by which we judge advertising effectiveness. Effectiveness is a combination of efficiency in both time and budget. While a “set it and forget it” marketing strategy minimizes the time required to manage your ad budget, it actually hurts you when you consider the effectiveness of the static ad spend.
There are three scenarios that can happen when you lock into a static marketing plan that keeps you at the same ad spend level over the length of the contract. (Let’s say the contract is 12 months for simplicity’s sake.)
Scenario 1: The overall budget is too small.
In that case, you’ll end up short every month, particularly during peak leasing season, which will lead to higher vacancy as a result.
Scenario 2: The total 12-month budget is rightly proportioned, but because it is a fixed cost, you end up spending too much in slow months and too little in busy months.
If you were planning to spend a total of $12,000 for the year of 2019, you wouldn’t want to evenly distribute that into $1,000/mo increments. You may need $2,500 in the month of June and only $500 during the month of November. This is a case where “simplicity” does not equal “success.”
Scenario 3: The budget is too high.
Even if you are currently receiving all the leads you need, you might still be overspending.
You can easily lose money simply by paying for traffic you don’t need.
So, while such an advertising plan takes less time to manage, you pay for that time in the form of inflated ad budgets or uncontrolled vacancy.
A tailored strategy that meets the specific needs of your community—even on a month-to-month basis—isn’t as difficult to manage as you may think.
2. Think about advertising in terms of marketing partnerships rather than as marketing vendors.
When you have a vendor, the relationship is usually transactional. But, in a marketing partnership, you have a relationship with the company you’re working with. This relationship is vital because it creates a space in which you strategize together. .
This means that you have help with managing your community’s dynamic ad spend. So, while there is a greater degree of complexity and a larger time commitment for dynamic advertising, both of these things become easier when you partner with a reliable marketing team. The partner helps you make decisions, executes tasks, and monitors how your advertising is performing. When you combine dynamic advertising with a marketing partnership, the results are excellent.
3. Do not be reactive.
One of the many facts of life for communities in our industry is the annual peak leasing season fire drill.
Vacancy spikes, the leasing team starts to worry, management requires check-in calls, and ownership has questions. Essentially, everyone is stressed and no one is happy. It’s a ritual that so many communities seem to practice on an annual basis.
When you have a marketing partner, that partner should be able to help you anticipate problems before they even arise. When you know what direction your community is trending, you can make calm, intelligent decisions about how to manage your advertising budget. And when you use dynamic advertising channels, you can easily adjust spend as needed.
We don’t think any community should have to accept an annual season of panic caused by spikes in vacancy. With a dynamic advertising plan and strong marketing partnership, those seasons can be avoided entirely.
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