It's time to start planning your apartment community's marketing budget for 2023. Will you be satisfied with establishing the same budget where you spend the same amount each month, or would you rather have a budget where you spend your marketing dollars more efficiently?
Most multifamily operators agree that a dynamic marketing strategy that accounts for the changes in your apartment's demand and occupancy is far more effective than the typical static approach.
But becoming a dynamic marketer—and more specifically, setting a flexible budget where you're able to increase spending when you need more demand and dial it down when occupancy is stable—can be overwhelming.
We're here to help you start. In this blog, we'll explain everything you need to create a dynamic marketing budget for your apartments in 2023, including:
- What is dynamic apartment marketing?
- What do you need to set a dynamic marketing budget?
- How do you use data to plan out your dynamic budget?
Plus, we're providing a link at the end of the blog to a free tool that automatically sets a dynamic marketing budget for your apartments! Let's get started.
Note: Many of the details shared in this blog should sound familiar to RentVision clients who already benefit from a dynamic and predictive apartment marketing strategy. This content is meant for educational purposes for non-clients struggling with static marketing and budgets.
Webinar Video: How To Adopt A Dynamic Apartment Marketing Budget In 2023
What is dynamic apartment marketing?
Dynamic apartment marketing plans are responsive and adapt to your community's occupancy and demand changes. In other words, it's the exact opposite of traditional apartment marketing plans, which are static.
Static Marketing Budget
Dynamic Marketing Budget
The first step toward becoming a dynamic apartment marketer is to set a flexible marketing budget.
What do you need to set a dynamic marketing budget?
You need three things:
- Identify your dynamic marketing source(s)
- Know your community's leasing needs (supply)
- Know your community's seasonality (demand)
Identify your dynamic marketing sources
Begin by evaluating where you're currently, or are planning on, spending your marketing budget. Are your marketing sources dynamic or static?
We recommend adding dynamic marketing sources like Google or Facebook ads to your strategy if you haven't already done so. They allow you to make changes to spending any time you want, which is critical because you will need some dynamic levers in your marketing budget.
If you've been relying heavily on Internet Listing Services, investigate what dynamic features are available. If you can change your package each month, that's great. If not, which is the case with most ILSs, you may want to consider moving on from them because they don't allow flexibility with your budget.
After you've identified your dynamic marketing sources, the next step is being able to assess their performance accurately. You cannot confidently adopt a dynamic strategy unless you're sure you're only paying for marketing sources that deliver your apartment community's most qualified leads.
Cost Per Lease is the best metric to measure the performance of your traditional marketing sources, like an ILS. The lower the Cost Per Lease, the better.
You can calculate your Cost Per Lease by dividing the monthly cost of a source by the number of leases it generates. The equation looks like this:
Source Cost (Monthly) / Number Of Leases =
Cost Per Lease
Alternatively, the only metric we recommend you use to evaluate any of your current digital advertising sources is Cost Per Minute. It's a unique marketing metric we've adopted because it focuses on what matters most to apartment marketers: ads that generate qualified visitors who stay on the website longer. The longer an online visitor engages with your community website and views floorplan pages, video tours, and photo galleries, the more likely they'll convert to a lead and, ultimately, sign a lease.
You can calculate your Cost Per Minute using the following equation:
Cost Per Click / Time On Site =
Cost Per Minute
Any marketing source that has a high Cost Per Lease or Cost Per Minute should be potentially removed from your strategy altogether. If you take the time to use these metrics and review current sources, you can eliminate underperforming channels and free up your budget to use dynamically instead.
Know your community's leasing needs (supply)
After you've identified your dynamic marketing sources, you need to know your community's leasing needs for 2023.
You can do this by mapping out all lease expirations scheduled monthly and multiplying that number by your community's average annual turnover rate to determine how many leases you'll need each month.
For example, if ten leases expire next August, and your average yearly turnover rate is 50%, you will need to earn five signed leases.
Know your community's seasonality (demand)
Knowing your community's leasing needs paints the picture of what your supply will be so you can understand how those leasing needs pair with your demand.
You can anticipate what your 2023 demand will be by determining your apartment community's unique seasonality. Every community experiences its own seasonality, so you mustn't assume all the swings in leasing activity match other communities in your area.
You can employ a simple tactic to see your most authentic seasonality pattern: review the last 12-month period of organic traffic to your website in Google Analytics. In months over the past year where organic traffic is high, you would've experienced an uptick in leasing activity in your community at that time, too. More web traffic equals higher demand. Inversely, months where fewer visitors came to your website matched slower leasing activity in your community.
Why is organic web traffic a great indicator of your seasonality? Just look at the graphic below:
It displays two years of daily organic website traffic data for one individual apartment community, but you can hardly notice any difference in pattern between both lines. It's a fantastic representation of how organic web traffic can help you forecast what your upcoming year's demand will be.
How do you use data to plan out your dynamic budget?
By taking the time to map out your apartment community's monthly leasing needs and demand, you have the data to begin designing a dynamic marketing budget.
You need a higher marketing budget in months when you'll have more vacancies and less organic website traffic. Inversely, it would be best if you allocated less of your marketing budget in months with more increased organic traffic and less vacancy.
Allocating your marketing spend in this way sounds complicated (hence why many apartment communities continue to operate with a static marketing budget). We've created a free tool that uses your data to set a dynamic marketing budget automatically.
Free Dynamic Apartment Marketing Budget Allocation Tool
This useful tool takes a bit of manual input. You will be required to enter your yearly turnover rate, dynamic marketing budget, unit count, organic traffic by month from the previous year, and your lease expirations for the upcoming year.
Note: Only input the amount of money in your 2023 marketing budget that can be dynamic. For example, you may have to pay a provider to host your community's website and other static marketing expenses that can't be changed or removed from your year-to-year costs. The number you enter into the 'Dynamic Marketing Budget' field should only be the amount of money you've freed up in your total marketing budget after eliminating underperforming sources.
Using your data, the tool calculates how much of your dynamic marketing budget you should spend per month on your various sources and daily spending if you are using Google and Facebook ads.
This tool doesn't show you exactly how much to spend—that's more complicated and requires a detailed analysis of your community's marketing strategy. You can contact one of our advisors to schedule a free consultation and learn more about RentVision's dynamic marketing strategy.
You can also download our free ebook, How To Manage Apartments When Occupancy Is Strong, by completing the form below. In it, we go into more details about how you can make your marketing spend more dynamic (and efficient).