I speak to many agents about Internet marketing. One subject that always rises to the top is paid search marketing (SEM) or pay per click (PPC). These paid ads show up at the top and right of most search results. These are above the organic free listings targeted by Search Engine Optimization (SEO) services.
Agents can setup search engine marketing ads through providers such as Google Adwords and Microsoft Advertising (for Bing and Yahoo sites). When someone searches a keyword phrase that you are bidding on, your listing will be displayed for free. Only once the consumer has clicked the link, do you then get charged.
Expensive To Play
Let us get this out of the way. Search engine marketing is not cheap. Of the top 100 companies that use SEM services, 15 of them are insurance companies. In fact, three of the top ten are filled in with the likes of GEICO, State Farm, and Allstate. Below you will find the insurance companies within the top 100 search engine marketing rankings.
|3||State Farm||$ 201,076|
|29||Liberty Mutual||$ 44,151|
|71||American Family||$ 28,716|
Retrieved: November 5, 2012
Notice that right column, yep that says daily spend. That is how much each one of these companies spends every single day! Even the largest agencies cannot compete with these kinds of spend levels.
Don't worry though. I know some tips and tricks on how to compete with a significantly lower budget. However, the first question you need to answer is are you willing to play the game? If so, read on.
The first critical step to creating a SEM campaign is to determine what keywords you want to target. Initially, you should only target keywords that fill the gaps in your search engine optimization strategy (SEO). For example, say you are targeting the following keywords within your SEO campaign: auto insurance dallas texas, and auto insurance fort worth texas. Now let's say you organically rank well in search engines for the term auto insurance dallas texas. However, you do not show up for auto insurance fort worth texas. You might consider going after just auto insurance fort worth texas. By only targeting the gaps in your SEO strategy, you minimize the number of keywords you need to initially target.
The next way to minimize spending is to not target broad generalized terms such as auto insurance. Currently, for the term auto insurance, it will cost you $40.00 per click to show up on the first page of the ad results. To make the price a little more manageable, you could geo-target the keywords. Take the terms from above: auto insurance dallas texas and auto insurance fort worth texas are listed as costing $1.75 and $1.50 respectively to show up on the first page. To show up in the highly clicked top three spots, the costs jump to $4.25 and $4.00 per click.
Setting a reasonable budget
Too often people will start out with a $50 a day budget. When competitive keywords often cost $10 a click, you will quickly blow past this budget, all without getting a single lead. This is very frustrating to new PPC marketers. To help give you an idea as to what it will really cost, it is recommended that for the Dallas area you would spend nearly $400 a day. Combining top of page placement , an optimal 10% click to lead ratio, and a lead closing percentage of 75%, would generate an estimated 88 clicks and 8 leads. If you made $100 per sale, you would need to close half of the leads to just break even.
Now your agency sells more than one line of business, right? If so, you might have captured them with an auto policy, but now have the opportunity to sell them on a homeowners policy or other add on services.
Free is better
Remember where I talked about filling the gaps in your organic keywords? Now you know why. If you are able to make your site rank well within the free listings then you would not need to bid on keywords. A properly targeted search engine optimization strategy should be able to get you ranked on the first page of the search engines. However, these strategies take time. So as usual it comes down between time and money.
Next, we will discuss how to increase your ad's click through rate, click to lead rate (or conversion rate) and lead to close rate.
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