Real estate marketing spends surge, but are returns keeping pace?

India’s real estate sector is spending more than ever to attract homebuyers, but marketers are increasingly questioning whether the returns justify the rising customer acquisition costs (CAC). As competition intensifies across premium housing, plotted developments and luxury projects, developers are pouring bigger budgets into digital advertising, influencer collaborations, experiential events and lead-generation platforms. Yet, conversion timelines are stretching and the cost per qualified lead continues to climb, say industry observers.

Industry executives say the post-pandemic boom initially made aggressive marketing spends worthwhile, as pent-up demand translated into faster conversions. However, over the past year, the equation has become more complicated. Higher property prices, cautious consumers and ad inflation across digital platforms have made acquisition significantly more expensive, especially in metros such as Mumbai, Bengaluru and Gurugram.

According to experts, customer acquisition costs across India’s premium real estate market have risen sharply over the past few years, with developers reporting digital marketing spends growing 20–30% year-on-year amid rising ad costs and longer conversion cycles. At the same time, companies are reallocating budgets away from generic advertising towards AI-led targeting, WhatsApp nurturing, micro-influencers and high-intent platforms, as the focus shifts from lead volumes to qualified engagement, site visits and booking intent. 

Ashish Jerath, President – Sales & Marketing, Smartworld Developers said, “The way we’re looking at it is less about raw acquisition cost and more about what happens after the lead comes in. Even though CAC has gone up, we’re seeing better quality traffic overall. A bigger chunk of leads is progressing to site visits and actual bookings, which is a strong signal that we’re not just paying for visibility but for reaching more serious buyers.” 

He added that several campaigns are outperforming internal conversion benchmarks, indicating that incremental spends continue to deliver measurable value when targeted effectively. At Smartworld, this translated into over 33,000 customer footfalls across project sales galleries in FY25–26, with multiple campaigns delivering nearly 3X the average market response benchmark. He noted that since home buying is a long decision-making process, success is measured not just through immediate sales, but also through indicators such as quality leads, repeat visits, site visits and buyer engagement across the funnel.

The shift also reflects a broader change in how developers are defining marketing success, with the focus moving beyond lead volumes towards buyer intent, engagement depth and conversion quality.

Developers are now seeing customer acquisition evolve from a pure media-buying exercise into a long-term brand-building effort. Several real estate brands have expanded investments across IPL sponsorships, celebrity-led campaigns, content marketing, hyperlocal influencer partnerships and immersive on-ground experiences to build recall in an overcrowded market. 

According to industry observers, the luxury and premium housing segments are witnessing some of the steepest acquisition costs because buyers take longer to decide and expect more personalised engagement before conversion. At the same time, digital platforms have become saturated with competing developers targeting similar affluent audiences, pushing up CPMs and cost-per-click rates.

Marketing experts argue that while spends are rising, attribution remains a key pain point. Many developers still struggle to accurately measure which touchpoints actually influence purchase decisions, given that home buying is a long-cycle category involving multiple visits, consultations and financing considerations.

Several developers say this has forced a rethink of how marketing efficiency is measured across the sales funnel. 

Sandeep Mangla, Managing Director of Forteasia Realty Pvt. Ltd., said the company now relies on incrementality testing and multi-touch attribution to evaluate marketing effectiveness, with metrics such as cost-per-site-visit and cost-per-booking replacing traditional cost-per-lead benchmarks. “We track customer acquisition costs through cohort-based payback periods which determine how incremental spending affects customer closing time and default rates. The reallocation of our budgets takes place within 30 days after we detect underperformance,” he added. 

Mangla further noted that the focus is now on driving qualified buyers rather than simply increasing lead volumes, adding that campaigns failing to translate visibility into site visits and bookings are viewed as inefficient spends.

Others are now adopting layered funnel-tracking models to better predict conversion outcomes in a long-cycle category like real estate.

Meanwhile, Abhi Raundal, Director at Teerth Realties, said the company now evaluates performance across three funnel stages, tracking engagement depth and video completion at the top funnel, virtual site visits and WhatsApp interactions at the mid funnel, and site-visit-to-booking ratios at the bottom funnel. 

“Our organization developed a predictive lead scoring system which assigns different values to these specific indicators. Sales teams only receive leads when intent crosses a threshold, which reduces lead wastage by 35% and enables them to handle extended sales cycles,” he explained.

Smaller and regional developers are also recalibrating spends around intent-driven engagement instead of broad visibility metrics. 

For Stonecraft Group, rising CAC has shifted the focus towards lead quality over visibility, with the company evaluating campaigns based on intent-driven engagement, site visits and deeper buyer interactions rather than enquiry volumes alone. 

Kirthi Chilukuri, Founder & Managing Director, Stonecraft Group noted, “since buying cycles are longer, we now look beyond immediate sales. Metrics like qualified leads, site visits, and repeat engagement are becoming more important as they reflect real intent and help us understand where the buyer is in their journey.”

Industry consultants say these shifts point to a larger structural change in how real estate marketing effectiveness is being evaluated. 

Building on this shift, Rahul Phondge, Chief Operating Officer - Residential & Chief Business Officer at ANAROCK Group, an Indian real estate services firm, said customer acquisition costs in premium markets have risen sharply over the past 2-3 years. He noted that despite strong pre-sales and sold-out launches extending into 2025, growth is becoming increasingly dependent on higher marketing spends rather than organic demand, putting pressure on profitability. 

Phondge explained that given the long real estate purchase cycle, traditional lead-to-sale metrics are becoming less relevant amid rising top-funnel noise. Instead, he said developers should focus on deeper indicators such as AI-scored qualified leads, site visits, booking intent and timely follow-ups, with metrics like cost-per-qualified-lead and cost-per-site-visit offering a more accurate measure of ROI. 

“AI tools can reduce the number of no-shows from 30–45% to under less than 20%. This can potentially increase bookings by 30% without the need to acquire more leads. In fact, this is among the major deliverables that ANAROCK’S AI put on the table for its developer clients,” he said. 

Channel mix

As measurement frameworks evolve, developers are also reworking where and how media budgets are being deployed.

While digital continues to dominate, developers are cautiously revisiting traditional channels such as outdoor, print and radio in markets where hyperlocal visibility still plays a strong role in influencing trust and discovery. Meanwhile, AI-led targeting tools, CRM automation and predictive analytics are being increasingly adopted to improve efficiency and reduce leakages in the funnel.

According to Phondge, developers continue to invest heavily in Google and Meta ads, with digital marketing costs rising 20–30% year-on-year. However, many major builder brands are managing to maintain CAC levels of 2.5–2.8% through organic pull, while combining digital with site branding and OOH for nearly 20% of direct orders. 

Raundal of Teerth Realties said the efficiency of display and search ads has declined sharply, while channels such as YouTube long-form walkthroughs, LinkedIn for premium projects and WhatsApp Business APIs are delivering 40–50% lower cost-per-qualified-lead. He added that the company has cut generic display and search spends by 20–25%, reallocating budgets towards YouTube (15%), WhatsApp nurturing (10%), micro-influencer partnerships (15%) and trackable offline media (5%), while the remaining spends continue across high-performing paid social cohorts and organic SEO. 

Stonecraft Group also noted a clear shift towards intent-driven channels, stating that broad-reach advertising is no longer delivering the same returns. The company said it is increasingly focusing on targeted platforms and storytelling-led formats aimed at serious buyers, while balancing scale with relevance. 

Meanwhile, Jerath from Smartworld Developers said the company is increasingly shifting spends towards high-intent platforms such as Google Search and hyperlocal channels, which are delivering stronger results. He added that Smartworld continues to invest selectively in awareness-led formats like experience-driven videos and premium ad placements, targeting cohorts closely aligned with its core buyer personas to improve downstream performance.

For larger developers, this increasingly means combining high-intent targeting with AI-led behavioural analysis. 

“A key enabler of this strategy has been our deep understanding of the buyer. We’ve been understanding buyer personas for over five years, and that foundation allows us to be precise in both targeting and messaging,” he said, adding that the company is also integrating AI-driven tools to analyse customer sentiment and detect subtle behavioural shifts that may not be immediately visible through traditional tracking methods. 

Still, most developers are unlikely to cut marketing budgets anytime soon. Instead, the emphasis is expected to shift towards sharper audience segmentation, stronger brand storytelling and measurable engagement metrics rather than vanity lead volumes.

As India’s real estate market becomes more competitive and consumer journeys grow longer, the central question for marketers is no longer how much to spend, but whether rising spends are truly translating into meaningful business outcomes.