Building and Construction

INDUSTRY FACTSHEET

Copyright © 2011 by Research and Management. All rights reserved.

Industry Overview

Major services in the construction industry include heavy and civil engineering projects as well as non-residential

buildings, such as those for industrial, commercial and institutional use. The demand for construction depends heavily

upon the health of the economy, which includes corporate profits and local government budgets. This industry is highly

competitive with companies that range from small private firms to multi-billion dollar companies. Profitability of

companies depends on project bids and efficiency of operations. As such, the larger companies have an advantage in

their ability to become involved in multiple projects simultaneously and in different types of construction. Likewise,

smaller construction companies can compete through specializing, or subcontracting on larger projects.

Typical customers of the industry are comprised of property developers, corporations, institutions and government

bodies. Additionally, contracts with business leaders, architects, engineers, developers and other construction firms are

very important sources for leads and projects. On the promotional front, major marketing initiatives include customer

visits, magazine advertising, trade publications and participation at industry tradeshows.

Business Challenges

¾ High Insurance Costs: For the most part, construction contractors pay high premiums for various types of

insurance. This includes worker compensation, general liability and surety. Major insurance issues involve a

variety of concerns, such as construction delays or defects, accidents by inexperience or overworked employees,

and even poor bookkeeping.

¾ Safety Liability: Unfortunately, the construction industry has a considerably large share of fatalities. In effect,

contractors carry liability insurance to protect against lawsuits brought forth by injuries to employees or to job

site visitors.

¾ Uneven Revenue and Expenses: While contractors incur a steady stream of expenses, customer payments are

periodic including payments retained even after a project is complete. Poor weather can significantly delay

construction schedules and create an uneven cash flow. Additionally, prices or availability of major raw material

like lumber, steel or concrete can change quickly. On larger scale projects, prime contractors may even handle

more complicated cash flows, like progress payments to subcontractors.

Industry Opportunities

¾ Computer, Construction Technology: Advancements in computer technology and building techniques allow

companies to enhance on project implementation. Computer technology, for instance, has reduced costs and

mistakes, which is vital to an industry that relies heavily on scheduling, coordination and technical specifications.

New, innovative building methods can also drastically simplify commercial projects and reduce costs and time-

to-completion.

Building and Construction

INDUSTRY FACTSHEET

Copyright © 2011 by Research and Management. All rights reserved.

¾ Green Construction: The demand is rising for environmentally-friendly construction, materials, practices and

certifications. An increased use of steel has helped qualify structures as “green,” by way of its recycled content.

Steel products (as opposed to wood) last longer and command a more uniformed quality in addition to

significantly reducing waste. Additionally, new “cool” metal roofing is much more energy efficient than

traditional building materials.

¾ Buildings for High-Growth Population Segments: Growth in population segments presents great opportunities

for the commercial construction industry. For example, as the baby-boomer population segment rises in the

next decade, there will be a higher need for retirement, assisted living and hospital facilities.

Digital Marketing Trends

Social Media Uses for Business Information

The majority of real estate and construction companies in

North America use social media in their businesses to read

user ratings and reviews for products and services (according

to 69% of respondents). Sixty-three percent of respondents

said they visit company or product profile pages on social

media sites. On the other hand, 61% of companies in the real

estate and construction industry attend webinars or listen to

podcasts online. Reaching and downloading business-related

content on third-party content-sharing sites was ranked as the

4th

most common social media activity among those in the real

estate and construction industry (59% of respondents).

Another popular social media activity among real estate and

construction companies is visiting company blogs (54%), while

48% of respondents said they use social media to ask

questions on Q&A sites like Yahoo! Answers and LinkedIn

forums. Other reasons that companies in the real estate and

construction industry use social media for business

information include: participating in online business

communities, conducting searches for information, subscribing

to RSS feeds of business-related news or information sites,

participate in discussions on third-party sites, save business-

related links on social bookmarking sites and use Twitter to

find or request business-related information.

Building and Construction

INDUSTRY FACTSHEET

Copyright © 2011 by Research and Management. All rights reserved.

Construction Companies Using LinkedIn

The construction industry is among the top 10 industries worldwide

using LinkedIn as of March 2011. According to eMarketer, construction

companies are ranked in 9th

place among the top 10 industries. With

3.2 million LinkedIn users around the world, construction companies

have more of a presence on LinkedIn than those within the government

industry. Other sectors that have a strong presence on LinkedIn include:

recreational companies, consumer goods, educational companies,

medical professionals, manufacturers, financial institutions and high

tech companies.

Digital Marketing Opportunities

Immediate Areas of Focus for Social and Mobile

When we look at the latest digital marketing opportunities of social media and mobile for businesses in the building and

construction industry, their main considerations and focus should be on how they can use these technologies to develop

stronger relationships with their consumers, industry peers and suppliers, as well as raise awareness around their

company as an industry leader. On the social front, building and construction companies are leveraging social

technologies like blogs and forums to showcase their expertise, prove their industry leadership and voice their opinions

on upcoming legislation and regulations. They utilize social alerts and review sites to monitor their brand mentions and

facilitate online recommendations. They are also using Twitter and LinkedIn to network and build connections, share

company news and content, and listen to what consumers are saying about their brand.

On the mobile front, companies in the building and construction industry are still learning how to effectively use this

relatively untapped tool. As a result, those that do move forward with a mobile strategy could have a profitable

competitive advantage. To start, these companies are ensuring their websites are mobile-friendly and then looking to

improve their service offerings through simple, yet effective, applications such as mobile calculators for specifiers and

design tools for architects. When it comes to social technologies and mobile marketing, below is where we see the

majority of building and construction companies making considerations from a strategy standpoint.

Social Technologies

Blog Facebook Twitter LinkedIn YouTube News Feeds/

Social Alerts

Social

Bookmarking

Forums Review

Sites

9 9 9 9 9 9

Building and Construction

INDUSTRY FACTSHEET

Copyright © 2011 by Research and Management. All rights reserved.

Mobile Marketing

Mobile

Site

Mobile Local

Search

Mobile

Ads/ Text

Mobile

Apps

9 9

Popular Pay-Per-Click Keywords

Keyword Advertiser

Competition

Global Monthly

Searches

Estimated Cost

per Click

construction 0.22 135000 $2.25

maison 0.33 110000 $1.23

civil engineering 0.35 90500 $1.17

construction jobs 0.87 49500 $0.94

contractor 0.29 33100 $3.34

builders 0.79 27100 $2.27

construction news 0.49 22200 $0.95

carpentry 0.41 22200 $2.07

builder 0.29 22200 $2.47

construction companies 0.6 18100 $2.11

home builders 0.87 18100 $3.05

construction maison 0.92 18100 $1.20

construct 0.03 14800 $0.44

excavation 0.24 14800 $2.40

contractors 0.59 14800 $3.64

construction company 0.39 12100 $1.96

general contractor 0.63 9900 $5.01

building construction 0.44 9900 $0.79

construction equipment 0.74 9900 $1.89

health and safety 0.56 60500 $1.65