Wednesday, March 19, 2014

Pay Per Click Ads: Law of Diminishing Returns

The other night my dad contacted me and asked about advertising on the web as an immigration lawyer.  My dad is a lawyer and  is thinking of diversifying into immigration law.

His questions like most of clients were more general in nature: How would I have a website for this?  How would people find me? How much would I have to spend for a client?


These are all great questions and make a lot of sense from a business person's point of view.  So, in doing my best to address his questions at an this early exploratory stage, I wanted to do "rough" analysis of the amount of website clicks are available out there for immigration lawyers.  In another words, how many people are out there searching for a immigration lawyer or something related and how much is each click if you were to pay for the traffic?

I was appalled at the lack of skills going into this group. Either the lawyers are doing the advertising themselves or they have hired incompetent firms to do it for them.  The cost per click range was between 80 cents a click and a whopping $32.00 a click.  You might be thinking...that's quite a range.

Here is an interesting thing I think even a rookie in paid advertising can see, but yet they clearly hadn't based the bids that this marketing platform is getting.  Once the cost per click got to $2 the amount of traffic you got from $2 on up was negligible, because a graph indicated the amount of traffic you would get as you paid more per click and it was straight and then leveled off when it got to $2 a click. The fact that $32 a click was in the graph shows one of two things:

1) Either someone is way over-paying past the point of diminishing returns; or
2) Their Quality Score is so bad, it's driving the upward amounts paid by people in this community upwards.

It's probably a bit of both.  If you don't know what Quality Score is, then search for the term "search engine quality score" and read up on it.   The more you know about it, the more you'll realize you need professionals to handle your website marketing.

Needless to say, I told my dad that if he were a client, I would advise that your website is dependent on other advertising media beyond pay-per-click, because of the climate of the people advertising in this area.

Now, it's not to say that you cannot win this game and by the looks of the numbers I am seeing, I bet most of the people advertising (the law firm itself or a hired firm) is pathetic in their advertising knowledge, so they can be beat with a good quality score.

I just wanted to share this story, because I think it's a common problem out there for service type businesses like law firms.  They just don't have the time to monitor this stuff and don't understand whether or not their advertising is being done correctly.    Buyer beware on firms that "claim" they understand pay per click marketing.  It could be costing you a ton of money.

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