Section 4:Future-Focused Changes

With a second year of data, it is now possible to see how accurate agents and brokers were when anticipating how much they would invest in marketing, and how brokers in particular emphasized—or deemphasized—methods for marketing, including in-house services like coaching, as well as changes in their goals for those resources.

One of the biggest shifts came in an emphasis on internal marketing teams. Only one-quarter (25%) of brokers said they employed a marketing team in 2023, though that was slightly higher than in 2022.

But national franchise brokers were far, far more likely to field an internal marketing team in 2023. Almost two-thirds (61%) of national franchise brokers had one or more internal marketing teams in 2023, compared to under half (46%) in 2022.

Maybe even more importantly, brokers across nearly every region, type of company and experience level are growing their marketing teams. The average size of an internal marketing team nearly doubled between 2022 and 2023, from around four people to 7.5. National franchises claimed an average of nine people on their internal marketing teams, also up from around four in 2022.

This huge shift could at least partially explain the overall drop in all external marketing expenditures—that is, brokers are choosing to hire marketing professionals and pay those salaries, shifting their budgets rather than cutting them. It seems unlikely that this would account for the entirety of the 24% drop in marketing budgets, as detailed in Section 1, but paying three extra salaries—or five, if you are affiliated with a national franchise—is likely a major expense, and also a big shift in philosophy. 

How did the goals of those brokers with marketing teams shift? The biggest change was a deemphasis on recruitment.

Between 2022 and 2023, brokers were 16% less likely to direct their internal marketing efforts toward recruiting. That would seem to confirm the sentiment that brokers expressed in their overall assessment of marketing, as they rated recruitment and retention as a lower priority for all marketing efforts.

Why recruiting fell so significantly in the minds of brokers, in how they spent and how they assessed their marketing plans, is not entirely clear. But it seems that the shift toward internal marketing teams was not made with recruiting in mind. Also, brokers were no more or less likely to focus on retention with their internal marketing teams in 2023, compared to 2022, meaning that holding onto productive agents also wasn’t the reason for the shift toward internal marketing.

Another big change for internal marketing teams was in affiliated services, where brokers were 13% more likely in 2023 to focus on their internal marketing teams. That also aligns with the expressed sentiment of these same brokers, who rated affiliated services as slightly more important in 2023 compared to 2022. But again, without more qualitative data, it is hard to say why brokers shifted this responsibility internally, or whether this new focus has anything to do with the larger investment in marketing teams.

Brokers were not significantly more likely to have their internal teams focus on marketing for obtaining listings, for existing listings, for commercial/property management, or for new construction. These teams were slightly less likely (about 4%) to focus on corporate relocation.

Looking at coaching, there was almost no change from 2022 to 2023 for agents. Right around one-quarter (26%) said they used a coach to help them with their marketing in 2023, compared to 23% the year before. The slight increase, though, during a year of cost-cutting, would appear to demonstrate the perceived value of coaches. New agents were slightly less likely to work with a coach than last year, but still much more likely than the overall average, with 38% of agents in their first three years using a coach.

With another year of data, it is now possible to see how effective agents and brokers are at predicting their own marketing expenses from year to year. In 2022, when asked if they anticipated having higher, lower or roughly the same marketing expenditures in 2023, only 5% of brokers said they expected to make cuts, with 64% saying they would keep the same budget and 31% expecting to increase their spending.

In 2023, only 15% of brokers said their budget was, in fact, higher, and 22% made cuts.

That disparity reflects both the extreme uncertainty of the last couple years of real estate, and possibly a bias toward optimism that characterizes many in the business.

Notably, older and more experienced brokers were more cautious, less likely to anticipate spending increases and slightly more likely to plan for spending cuts—but not by much. National franchise brokers, and those between the ages of 18 – 54 were the most optimistic in 2022, with 40% of the younger demographic thinking 2023 would see marketing increases.

Agents didn’t fare any better, with 35% expecting to spend more on marketing in 2023 and only 5% anticipating cuts, while only 20% reported that they actually did increase their budgets, and 23% making cuts—though again, older and more experienced agents were more likely to anticipate cuts, and less likely to think they would spend more.

With that context, agents and brokers were slightly less optimistic about their anticipated marketing spend in 2024. Six in 10 (60%) brokers currently expect to spend more on marketing this year, with 9% planning for cuts. Only 33% of agents are planning to increase their budgets in 2024, and an identical 9% think they will spend less.