How To Calculate Budget in a Tough Market
Welcome to part 1 of our 6-part series where we discuss all things buying and planning media for the property market.
How To Calculate Media Budget & Plan for Success
Without question, the Melbourne housing market has cooled off considerably in the last twelve to eighteen months with a noticeable down turn taking effect of late. And it’s being felt more than ever in the Apartment sector.
House and Land is also feeling the pinch but on a lesser scale.
Whilst cyclical and there will be better days, some developers can simply spend their way out of trouble. But for most others, it’s a tough boat to row and a hell of a ride along the way.
The knock-on effect of the downturn is ensuring marketing budget works harder and is more effective. Gone are the days of the stock standard one in ten lead to sale conversion ratio. Now it’s more like one in thirty, even one in fifty in some cases depending on the product mix. But one thing is for certain. It’s tough out there.
So with lead to sale conversion ratios steadily on the rise, it makes sense that marketing budget has to rise alongside it. But it doesn’t. For the most part (and we’re not talking for everyone here) marketing budget has always been calculated by a percentage of the gross value of a project.
So if this type of calculation is to remain and ensure the project remains profitable, it means that the same marketing budget needs to work three times harder than what it used to.
Outside of product and price, there are five distinct areas you must look at when “budgeting for success”
A lot of the time however, these areas are overlooked when allocating budget to a project, but it shouldn’t be. It’s a basic equation that can mean make or break on a project remaining profitable.
In our next blog post, we’ll go into detail as to how how all of this comes together.