News Flash: Lawyer PPC avertising is expensive, part 54

by admin on April 5, 2008

Interesting discussion in the Austin criminal defense blogging community about PPC (Pay Per Click) and online advertising budgets. The cost and value of leads is something I spend a lot of time analyzing.

While PPC can certainly be a great way to market your services, it is also very easy to spend it poorly. I suspect that many firms who get in bidding wars for the top keywords slots quickly burn through advertising dollars at a big loss, if they aren’t paying careful attention to ROI.

There is more to successful online lawyer advertising than:

  1. Buy $20-$50 PPC ads for “top local DUI Lawyer”
  2. Pass marketing expenses on to clients
  3. Profit!

What Does Your PPC Ad Buy?

Unlike buying yellow pages ads (where you can also easily spend $5000+/month), there is an intermediate step from someone seeing your ad to generating a lead.

When someone clicks on your ad, all you are buying is someone’s attention for a very limited time. Most people click away within 3 seconds if a web site doesn’t grab there attention, or give them something they were looking for.

So when that searcher clicks on your ad and goes to your web site (your “landing page”), you need to have to have something both compelling and relevant to what they are looking for. It really has to deliver on the promise of the ad that made them click.

How Often Does A PPC Click Become a Real Live Contact (Lead)?

In most industries including legal, 5%-10% is a very strong conversion rate from a PPC ad to a lead. Keep in mind that many people who are searching are not your target customers. It could be that a person finds out his cousin was arrested for DWI, and it curious what might happen to him. Or if someone famous gets arrested, that can often increase curiosity traffic.

So at a 10% conversion for a $50 click (or a 5% conversion on a $25 click), you are spending $500 just to get someone to call or email you.

Leads to Clients

An attorney who knows what he or she is doing, and who knows how to sell his services can probably convert between 10-20% of leads into clients.

So, at that original PPC rate, you are spending $2500-$5000 in client acquisition costs.

Most marketing experts state that businesses with any significant overhead need to return 3-1 on marketing dollars to make a decent profit.

Now you have to charge you clients as much as $15,000 just to make a decent profit, to cover your time, overhead, expenses.

There are probably only a handful of criminal defense attorneys in any given advertising market who get paid 5 figure fees for a DWI charge.

(I’m not even counting whoever the NFL player hires, or Senator or CEO calls when his son gets busted. Those people aren’t searching online, so it doesn’t matter how much you spend on advertising, you aren’t getting that call.)

And if your fees are that high, your probably can’t realistically convert nearly that many leads to clients, since you are pricing yourself out of what most of the market can afford. Especially when most of your competition is charging fees that are a fraction of that.

The bottom line is for a criminal law firm to successfully monetize some of the astronomical PPC rates people pay for the most competitive terms, they have to be at the very top of their game at every level.

I personally believe that most of these firms who continue spending at those rates simply aren’t paying enough attention to the ROI. Maybe the firms are successful enough overall that they don’t notice the thousands of dollars per month they are wasting. (Why not consider buying criminal leads?)

But I’m sure Google stockholders are appreciative.

About Dave Matson

Dave Matson is the owner and operator of High Steppin' Searches. Dave Matson on g+

{ 2 comments… read them below or add one }

Andy Sweet April 18, 2008 at 7:04 pm

Dave, couldn’t agree with you more. As someone who also does legal internet marketing, I’m always amazed at how many of my lawyer competitors have no performance tracking for their advertising. I wish I could say I’m shocked, but I’ve kind of gotten used to it.

Most of these guys don’t follow the value chain you’ve described to see if it’s a healthy ROI. Now, I have no problem watching my competition waste money and knock themselves out. Unfortunately, there’s a sucker born every minute and one will surely replace the guy that just blew his budget. As a result, it’s an inefficient market and it becomes truly cost prohibitive to bid on what experience tells you are the ‘money terms.’

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Dave Matson April 18, 2008 at 9:37 pm

Andy,
You’re absolutely right that there are many extremely inefficient lawyer leads markets with the majority of players burning through marketing spend, and being replaced by new suckers.

I had a client in one such market, and it was brutal to follow. It wasn’t just PPC – organic rankings were an arms race, too. There were at least 5-10 small law firms probably paying SEO companies way too much money for what they could be earning back.

Top SERPs would bounce nearly every month until a couple of the smartest players either purchased or optimized old domains (1999-2000), and those became dominant.

The problem is there are just too many lawyers who think they can compete. Cost of entry into the market is too low, and it takes a while for people to realize that their cost of client acquisition is too high.

Then they feel committed and desperate, and are willing to suck up making almost no money for far too long.

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