It's that time of year again. Home improvement contractors are reviewing their numbers, evaluating what worked in 2026, and figuring out how much to spend on advertising in 2027. And for a lot of businesses, the process looks something like this: Take last year's budget. Increase it a little. Move a few dollars around. Hope for better results. Sound familiar? Here's the problem. A marketing budget isn't the same thing as a marketing strategy. And heading into 2027, that distinction could matter more than ever.
Google Just Made an Important Change to Advertising Budgets
On October 14, Google announced new advertising controls designed to give businesses more influence over how their money gets distributed. The features, called channel prioritization and budget allocation, allow eligible advertisers to prioritize certain advertising networks and set spending limits on lower-priority inventory. For example, a contractor running eligible Google Search campaigns may want to prioritize Google Search over Search partners or the Google Display Network. Instead of treating those placements as an all-or-nothing decision, the new controls create additional flexibility. Google began progressively rolling out the features on October 15 across eligible Search, Shopping, Performance Max, and Demand Gen campaigns, although the available options vary by campaign type. Not every advertiser will have access immediately. And these features don't suddenly give advertisers complete control over every individual placement. But the bigger message is worth paying attention to.
Even as advertising becomes more automated, businesses still need to know where their dollars are going.
Google's technology can help optimize campaigns. It cannot determine your entire business strategy for you. That's your job.
Source: Google Ads announcement, October 14, 2026.
The Home Improvement Market Isn't Going to Do the Growing for You
There's another reason 2027 planning deserves serious attention. Harvard University's Joint Center for Housing Studies projected in July that annual home improvement and repair spending would reach approximately $519 billion through mid-2027. That's a massive industry. But the same forecast expects annual spending growth to slow to just 0.5% by the second quarter of 2027. That doesn't mean homeowners will stop replacing roofs, repairing air conditioners, remodeling bathrooms, or upgrading windows. It means growth may become harder to earn. When an industry is expanding rapidly, businesses can sometimes grow simply because demand around them is increasing. When growth slows, winning market share matters more. And winning market share takes more than turning up your Google Ads budget.
Source: Harvard Joint Center for Housing Studies, July 2026.
Stop Expecting Every Advertising Channel to Do the Same Job
One of the biggest mistakes I see in marketing conversations is evaluating every platform as though it should produce the same result. It shouldn't. Think about the homeowner who needs a new roof. Maybe they saw your commercial during the evening news. A week later, they encountered your ad while watching streaming television. Then they saw a completed-project video on Facebook. Eventually, they searched Google, recognized your name, read your reviews, and requested an estimate. Google might receive credit for the lead. But did Google do all the work? Probably not. Several marketing channels may have influenced that homeowner before deciding to call. This is why I believe contractors should think about advertising in three connected categories.
1. Capturing Existing Demand
These are the homeowners actively searching for your services. Paid search, Local Services Ads, and strong organic search visibility can help capture that demand. If someone's air conditioner has stopped working, they're probably not waiting to see your next television commercial. They're searching for help. You need to be easy to find.
2. Creating Future Demand
This is where broadcast television, streaming, YouTube, social video, and other awareness-focused advertising can play a key role. The objective isn't always an immediate phone call. It's building recognition and trust before a homeowner needs your company. That matters, particularly for expensive projects that require research and careful consideration.
3. Converting Demand Into Customers
This is where your website, reviews, call handling, estimate process, and follow-up strategy come into play. You can have the best advertising campaign in your market. But if nobody answers the phone, your website is confusing, or your sales team never follows up, you're wasting opportunities you've already paid to create. These three parts need to support one another.
Video Advertising Continues to Change
Don't treat traditional television and digital video as opposing strategies. They're different tools with different strengths. Research from the Interactive Advertising Bureau projects U.S. digital video advertising spending will exceed $80 billion in 2026, accounting for more than 60% of total television and video advertising spending. Social video and connected television are both expected to grow. Meanwhile, BIA Advisory Services projects the U.S. local advertising market will reach approximately $186.5 billion in 2027, with underlying nonpolitical advertising growth offsetting much of the expected decline in political spending. What does that mean for contractors? The advertising landscape isn't getting simpler. Homeowners are spending time across more environments, while advertisers are finding more ways to reach them. That doesn't mean you should advertise everywhere. It means making intentional media decisions. A local HVAC company may benefit from broad market visibility supported by paid search. A high-end remodeling company may prioritize geographic targeting, educational video, and nurturing homeowners through a longer decision process. A roofing company expanding into a neighboring market may need to build name recognition before expecting search advertising alone to deliver results. Different businesses require different marketing strategies.
Sources: IAB's 2026 digital video research and BIA's September 2026 local advertising forecast.
Five Questions Every Contractor Should Answer Before Setting a 2027 Budget
Before deciding whether to spend $5,000, $15,000, or $50,000 a month, I'd start with five questions.
1. Where do we actually want to grow?
Are you trying to increase revenue from existing services, enter a new territory, or promote a higher-margin product? Those goals require different strategies.
2. What is our most valuable customer worth?
A maintenance appointment and a complete HVAC replacement shouldn't necessarily carry the same acquisition-cost target. Understand your average job value, profit margins, and customer acquisition costs.
3. Are we relying too heavily on one advertising channel?
If nearly every opportunity comes from the same source, you're exposed when competition, costs, or platform policies change. That doesn't automatically mean you need more platforms. It means you should understand the risk.
4. Are we investing in brand recognition or only chasing people ready to buy?
Capturing demand matters. But so does becoming the company homeowners already recognize when they begin researching their options.
5. Can we connect marketing activity to actual business results?
Leads are important. Appointments, estimates, closed jobs, and profitable revenue tell a more complete story. If your reporting stops at cost per lead, you're missing part of the picture.
Build a Budget That Can Adapt
Here's another recommendation for 2027. Don't build a marketing plan that's so rigid it can't respond to what's happening in your business. Instead, define your core advertising investments, establish performance expectations, and identify where you have flexibility. If your installation crews are booked out, your strategy may need to change. If you're entering a new market, you may need additional awareness. If a particular service category is outperforming expectations, you may want to redirect resources toward it. If lead quality declines, you should investigate before automatically increasing spending. Review performance regularly, but don't make major changes based on a handful of leads or one unusually slow week. A good marketing plan should be disciplined without being inflexible.
The Bottom Line
Advertising technology is getting smarter. Google is introducing new controls. Video advertising continues to evolve. Homeowners have more ways to discover, research, and compare contractors. And the home improvement industry is preparing for a more competitive environment. But none of that changes a fundamental truth. Marketing isn't about spending your entire budget. It's to grow your business. That means understanding where opportunities exist, what makes your company different, how your advertising channels work together, and what your investment actually produces. The contractors who succeed in 2027 won't necessarily be the ones spending the most. They'll be the ones making the smartest decisions about where their money goes.
Ready to Build a Smarter Marketing Strategy for 2027?
If you're reviewing next year's advertising budget, now is the perfect time to look beyond individual platforms and think about the bigger picture. At I'm H.I.M. (I'm Home Improvement Marketing), I help home improvement contractors develop marketing strategies that connect broadcast television, streaming, digital advertising, search, social media, and meaningful business goals. Whether you're looking to increase market share, generate more qualified opportunities, or make an existing budget work harder, the starting point is understanding your business and building a strategy around where you want to go.
Ready to find out whether your marketing dollars are working as hard as they should?
Let's Build a Marketing Strategy That Works for Your Business
At I'm H.I.M., I help home improvement contractors identify where their advertising dollars can work harder, connect traditional and digital marketing, and build strategies around measurable growth. Whether you're planning to increase your 2027 budget or use what you're already spending more effectively, I'd welcome the opportunity to discuss your goals.
Schedule your free strategy session with I'm H.I.M., and let's build a plan designed around your business.