How Much Should Manufactured Home Dealers Spend on Marketing?

“A man who stops advertising to save money is like a man who stops a clock to save time.”

– Henry Ford

Here’s the number one question we hear when we’re discussing marketing: “How much should I spend?” For those of you in the manufacturing housing industry, the answer will most likely surprise you. Companies are spending BILLIONS to get their product in front of consumers, and our industry has to do the same.

If a consumer has $5k burning a hole in their pocket, Amazon is spending LOTS of money to get them to purchase a new TV, and home retailers have to spend to get them to buy a home instead.

To start off, let’s look at some successful global companies to see how much they’re spending on marketing, both as a dollar amount and a percentage of their revenue.

Top 10 Marketing Budgets Worldwide

Amazon spends over $30 million per day marketing, and Proctor & Gamble Co. spends nearly $29 million. These are very, very large numbers. Which makes sense, because these are very large, global brands. For our purposes, it’s simpler to look at their marketing budgets as a percent of their revenue.

In 2020, Amazon had a global revenue of $386B. In that same year, they had a marketing budget of $22 billion, up from $18 billion the previous year. Their advertising budget was 5% of their revenue.

Let’s skip down the line a bit and look at AT&T. In 2020, AT&T’s revenue was $172 billion, and their marketing budget was $6.1 billion. Their marketing budget was equal to just under 4% of their revenue.

We know what you’re thinking. “How does this apply to us? Amazon doesn’t sell manufactured homes, and neither does AT&T.” That’s right, so let’s look at some other industries below:

As you can see, AT&T and Amazon fall right about where they should be – they’re both retail companies, so their average spend is around 4.4%. Amazon is actually spending higher than average – 5% vs. an average of 4.4%.

Let’s apply the percentages above to a manufactured home retailer. In 2019 according to MHI, the average price of a new manufactured home was $82,000. Assuming a retailer sells 50 homes, that would be an annual revenue of $4.1 million. To get the marketing budget, we calculate 4.4% of 4.1 million, which is $180,400. A manufactured home retailer selling 50 homes per year should spend about $180,400 per year marketing, or about $15,000 per month.

Seem high? Not when you look at what car dealers spend. According to auto news, the average franchise dealer spent $640 per car in marketing. Considering the average auto dealer sells over 1000 cars per year, that puts their marketing budget between $500K to $1 Million per year.

Need some help figuring out where to spend that budget? Check out the graphic about from Smart Insights This is a good place to start when allocating your budget.

When you’re ready to learn about the different options available for MH retailers, click here to head over to our blog. We have LOTS of free resources regarding marketing for manufactured home retailers.

We realize that it can be intimidating to increase your marketing budget, but the proof is out there. The most successful companies in the world invest time, energy, and money in marketing. You’ll be in very good company if you decide to do the same.