How much should you spend on marketing in your architecture practice?
This question was submitted by Pippa Hurst (who was a Senior Communications Designer at Cox in Perth at the time) and she asked:
“What percentage of turnover should a practice allocate to a marketing budget?”
I answered this question in a Facebook Live and you can watch the recording here.
In summary, there is a short answer and a long answer to this question. The short answer is 7% of annual turnover (that’s for professional services firms, according to research done earlier this year by WebStrategies [1]).
Now for the long answer. In doing some research to answer this question, it occurred to me that the two sectors where I’ve worked in marketing – Hollywood films and Australian architecture – are at opposite ends of the marketing budget spectrum.
Of course, a lot has changed since I worked in film marketing in London in the 1990s – the big studios spend less on marketing and earn less from box-office now – but they still spend millions of dollars and employ a highly polished system to execute sophisticated campaigns around each new film release.
Conversely, the average architecture firm's marketing budget is low by comparison. It’s even low compared to most other industries: the average marketing budget across all sectors is 10% of turnover, according to Gartner research [2] – but professional service firms tend to hover around 7 to 7.5%.
What should you include in your architecture marketing budget?
It’s important to define what kinds of messaging and activities you include in your architecture practice “marketing budget”, and also to ask how carefully you have defined your target audience, messaging and delivery?
For example, do you include the cost of producing Tenders and RFPs; or competition entries (which should technically be categorised as Business Development activities, not Marketing). Do you undertake any SEO or analytics of what’s working currently across your website and socials; and are you running any paid advertising on Google or Facebook or HOUZZ?
It’s worth noting also that your marketing spend will vary depending on the current season of your practice: if you are currently trying to grow your market share, you may spend more; whereas if you are in a consolidation phase, you might spend less than average.
There is an article from the American Institute of Architects [3] in the footnotes that provides a great overview of marketing for architecture firms, and it also goes into the reasons why architects haven’t traditionally been great marketers, which I’ve covered in my webinars too. That article predates the introduction of social media, but many of the same principles still apply, so it’s still worth a read.
What lessons can architecture practices learn from Hollywood?
My experiences of working in Hollywood film marketing – for Twentieth Century Fox in London – have highlighted for me several key ways that architecture firms can improve their marketing efforts.
In film marketing, a lot of effort and thought is expended at the start of each campaign to strategically define the ICA and USP for the movie, so that studios can create and distribute tailored messaging to reach a targetted niche audience. In contrast, most architecture practices tend to approach marketing in a pretty ad hoc way.
The marketing managers I worked with across Europe would set a marketing budget for each film release based on its estimated gross takings, and then define the audience they wanted to target, depending on whether the film was a rom-com or a thriller or an action movie.
They’d then divide the allocated budget into two spend categories:
Above the Line – which was broadly targeted messaging (usually advertising), where the objective is to build brand awareness (mass media spend).
In architecture, this would be the broad education and advocacy work of peak bodies such as the Institute and AAA – which promote messages about why architecture is important, and its value across a range of economic, social and environmental measures.
Activity in the Above-the-Line category includes TV and radio campaigns, and print media advertising
The second category is Below the Line – which is targeted at specific consumers using demographic and/or psychographic characteristics. This content is highly personalised, and the objective is to gain conversions. These activities are more easily measured, and usually delivers better return on investment.
In architecture, most marketing by individual firms would fall into this category.
Activities include direct marketing via email and social media; Public Relations and several subtypes that aren’t relevant to architecture, such as outdoor advertising, in-store promotions, and event sponsorship.
Today, digital technologies make it possible to combine ATL and BTL marketing in one campaign for distribution across various channels. That is, you can deliver a broad free or paid message about a brand or product to a tightly defined audience on Facebook or Instagram, for example.
So which marketing channels work the best today?
It’s widely believed that social media is the best performing channel, but research suggests that email marketing is the most effective marketing activity, in terms of Return on Investment [4]. However, most architecture firms aren’t yet using regular Email marketing as part of their marketing plan, so that’s a low-hanging fruit you might want to consider.
I’ve developed a Six Channel System of architecture marketing to help practice directors and principals work out the best methods of reaching their future clients, depending on the types of services they offer and the sectors they are active in. You can find out more about that here.
And if you’re interested in finding out what other types of marketing activities you could deliver for a range of budgets – starting at just $2000 and working up to $100,000 – I’ve included a link to an article by Michelle Gamble in the footnotes, which provides a good overview [5].
But before you commit to a certain level of spending, you must address the key element that’s missing in most architecture practices. That is, the strategy that underpins your marketing objectives and activity.
I say this because the outward-facing messaging of most architecture practices is aimed at architectural peers, not future clients, and if that’s the case in your firm, it doesn’t matter whether you’re spending zero dollars, or 7% of your annual turnover, or significantly more than the sector average; your efforts are likely to be wasted if you’re not addressing and connecting with future clients.
If you’re looking for help to distil your practice philosophy and approach into a workable communications strategy, you might be interested in my Review + Reset consulting package. In this consulting package, I work with architects to establish their Ideal Client Avatar and Unique Selling Proposition before creating a customised Blueprint for their marketing and communications needs. You can find out more about the R+R service here.
To finish off, I’ve included a really great example of an effective Instagram post which totally hits the nail on the head. Architect Anna O’Gorman speaks to her defined target audience, and delivers an architectural offer, and includes a call to action. Take a look and you’ll see what I mean [6].
So, that’s the long and short of marketing budgets for architects.
I’d love to hear your take on marketing and how it’s working in your practice. Drop a comment below if you’d like to share any recent successes – or to let me know where you could use some extra help.
Ready to access Sounds Like Design’s business development and marketing services?
I offer three services to architects, ranging from 1-hour Zoom Acupuncture Sessions to the 3-month Review + Reset consulting package.
If you’d like a short, sharp injection of expertise – to talk about any business development or marketing issues you’re grappling with – you can book a 1-hour Zoom Strategy Session here. You can choose the topics we discuss, and tap into my knowledge, experience and connections to access insights that are customised for your practice.
If you’re interested in expanding your mindset and skillset around Business Development and Marketing using the system I developed specifically for architects, you can take the 3-week Architecture Marketing 360 CPD course. You can purchase the self-guided program and start right away, here.
If you’re interested in working with me directly, you can find details about our 3-month consulting package Review + Reset here. (I have a waitlist for new Review + Reset clients, and that’s what I aim to help you achieve for your architecture business, too).
Lastly, if you have any questions about this blog post, or any of my services, please click here to email me. I’m always happy to hear from architects who want to improve the way they communicate their value to future clients, and grow the market-share pie.
Feel free to leave a comment below or share this article with a friend or colleague, if you think they’ll find it useful.
Footnotes
[1] How Much Should You Budget For Marketing In 2020? Web Strategies Inc, www.webstrategiesinc.com/blog/how-much-budget-for-online-marketing-in-2014
[2] CMO Spend Survey 2019–2020: CMOs Double Down on Digital Channels and Analytics, but Fail to Plan for Tough Times Ahead, Gartner, www.gartner.com/en/marketing/research/cmo-spend-survey-2019-2020
[3] Marketing: Lessons from America’s best-managed architectural firms, AIA, https://www.architecturalrecord.com/ext/resources/archives/practice/pdfs/02marketing.pdf (this is an old report, but the basic principles remain the same, so it’s worth a read)
[4] How Much Should You Budget For Marketing In 2020? Web Strategies Inc, www.webstrategiesinc.com/blog/how-much-budget-for-online-marketing-in-2014
[5] How much should you spend on marketing? Smart Company, www.smartcompany.com.au/marketing/how-much-should-you-spend-on-marketing/
[6] Anna O’Gorman, Instagram, Monday 6 April 2020, www.instagram.com/p/B-oYHSrF8wu/