I recently ran the top 100 most expensive Pay-Per-Click (PPC) terms in Google and found the following:
– 90% of the top 100 most expensive terms were legal (Personal Injury related)
– 100% of the top 25 most expensive terms were legal (Personal Injury related)
– The #1 most expensive term was “accident lawyers in New Orleans” at a cost of $884 per click.
So what trends are we seeing as a result of these numbers…
So what have we learned since I last ran this report back in 2016?
- The total number of top 100 spenders from legal has increased from 76% in 2016 to 90% in 2018.
- “Maritime” lawyer paid ads have increased significantly since 2016
- The overall cost of the top 25 terms have increased significantly – almost doubling the average cost in less than 2 years.
- Spending on all “Mesothelioma” related searches have increased in total since 2016.
As I have previously written, In order to run any successful PPC campaign and track your ROI you need to know three numbers: your Revenue-Per-Client, your Cost-Per-Click, and your Conversion Rate.
As I discuss in detail in one of my previous books THE TOP 20% – Available today on Amazon.com, PPC advertising has an average click-to-lead conversion rate in legal of around 4-5 percent. From this you can calculate the amount of PPC leads needed to typically produce one case at (1 / 20%) = 5 contacts per day – assuming a 20% lead to case conversion rate. If your goal was to produce enough PPC-generated leads alone to meet an objective of 1 new case a day, you would need to pay for 111 clicks per day (5 contacts / 4.5% PPC conversion rate) and as you can see from the table above, this can become very expensive!
For example, let’s assume these numbers were applied to the “accident lawyers in New Orleans at a cost of $884 per click. You would have to spend $98,124 (111 clicks X $884 CPC) to generate one potential case. Of course the focus for anybody running PPC should not be the cost-per-click but rather the conversion rate relative to the Cost-Per-Conversion (CPCon), which results in your Return-On-Investment (ROI). ROI should ideally not be below a 3 to 1 return but I have seen this number closer to 2 to 1 for many personal injury attorneys recently. You can calculate your CPCon based on a formula of (Total Ad Costs / # of Conversions). Once you have a CPCon calculated, you can then calculate a total maximum bid for a PPC term by dividing your CPCon by the total number of clicks needed to reach a conversion (CPCon / Total clicks needed to reach 1 conversion). In this accident lawyers New Orleans example, if you needed to obtain a 3 to1 ROI ($294,372) your average case value here would need to be around $883,116 ($294,372 X 3), or simply 33% of $883,116 – assuming no additional fee splitting.
So are attorneys paying too much for these top 100 Pay-Per-Click terms? Let’s do the math and find out. Let’s choose the 22nd most expensive term “car accident lawyer san bernardino” at $518 per click. Following the previous calculations above an attorney would have to pay $57,498 (111 clicks X $518 CPC) in PPC to generate one new case. If the attorney wanted to achieve an ROI of at least 3 to 1, then they would have to generate billings of $172,494 meaning each car accident case would need to be worth $517,482.
Now for those who handle car accidents, these numbers are eye-opening to say the least! Most car accident settlements are nowhere near these numbers which is why you need to be smart when you bid for these types of terms as the costs can get out-of-control fast. Most of the good personal injury firms I work with today see PPC as one of their lowest ROI marketing vehicles (with the highest Cost-Per-Call and Cost-Per-Case totals) but will still use it as a fire hose when they need to turn-up the volume of new cases quickly.
So is PPC worth it for you? There are three primary factors you should always consider when it comes to running PPC campaigns:
Revenue-Per-Client (RPC): How much can you generate in total billings (net revenue) from each new client? The goal of any business is to always strive to maximize the total net revenue per client which means you need to generate higher returns on each dollar spent compared to your competition. And as most marketing experts know; the business that can afford to spend the most to acquire customers will ultimately win.
Cost-Per-Click (CPC): Most smart attorneys DO NOT consistently bid on the most expensive “head terms” as you see in the list and calculations above. This is what drives up the Cost-Per-Click to the danger zone. There are many thousands of other terms used daily and at a much lower Cost-Per-Click so do your homework and find the terms with the highest resulting Return-On-Investment. Most professional PPC managers will use tools to help find and manage these terms for you and keep on top of it.
Conversion Rate (CR)*: Beyond the cost for terms, this is where you can really sink or swim when running Pay Per Click and most attorneys still don’t get it right. When analyzing ads for many of the top legal terms on this list, I see the following:
Many of the law firms bidding on the most expensive terms DO NOT direct those who click on their ads to dedicated PPC landing pages which are designed to convert those ads at a 30%-120% HIGHER conversion rate then running PPC ads without them! I saw this problem in part and in whole in over 50% of the top sites paying for these most expensive terms who are either using poorly designed or no landing pages at all. Wow!
The mobile experience provided by many of these attorney websites and landing pages were simply terrible as well. Over 60% of paid search is on mobile and the conversion rates on these pages are simply bleeding money! Successful attorneys MUST move to a mobile-first marketing strategy and that starts with building, reviewing, and improving their mobile pages first with the PC version second – the opposite of how most law firms continue to operate today.
Finally, if your ads manages to produce a phone call, how are those inbound calls being handled? Are they answered during on and off hours within 3 rings or less? Is a live body answering these calls or are they receiving answering messages? How professional and helpful is the person who is fielding these calls? If/when that call gets transferred to an attorney, do they answer or does it roll into their voicemail? And finally how quickly does the attorney or intake manager get back to a potential client when they call or email? As I write about in my book, by following a simple processes for proper lead management and follow-up, you can increase the conversion rate of your existing leads by 100% alone – without having to buy more more ads!
PPC effects on multi-attribution marketing
On a final note, with the explosion of mobile, social, and video-based marketing, PPC is a necessary and important part of a complete attribution marketing strategy. Thanks to mobile, marketing is no longer linear and most consumers in legal will consume 6-8 touchpoints before they decide to contact you. And because of mobile, many of the best places to run your PPC ads are now at the top of mobile searches and within Google Maps (Promoted Pins) to help support ALL of your other marketing efforts and conversions.
Pay-Per-Click (PPC) advertising is one part of a much larger multi-attribution marketing and conversion strategy. In order to help justify any PPC spend you need to know the equations for success and run your campaigns by the numbers. Up until recently, PPC was one of the only digital players in town but now with the proliferation of social, video, and mobile advertising, you have a lot more options at your disposal and the good news is that many of your competitors who are bidding these PPC terms up are slow adopters of these other marketing alternatives – making them potentially more affordable alternatives for you.
As you can see, lawyers spend a LOT of money on Pay-Per-Click (PPC) marketing each year but only those attorneys who focus in on and continue to improve their three primary measurement numbers: Revenue-Per-Client, Cost-Per-Click and their Conversion Rate will be able to afford and outspend other at these acquisition costs over time. And as most marketing experts will tell you; the business that can “afford” to spend the most to acquire customers will ultimately win.
Need help getting your PPC running at full speed? Contact Me today to setup and FREE initial consultation to discuss…