Competition for Insurance in PPC

22ndJul. × ’11

PPC, through Google AdWords or Bing, seems like an easy way to gain visibility and acquire insurance leads on the web.  Those of us who have managed pay-per-click campaigns have long known just how expensive insurance related keywords can be.  Google lives and dies (and least right now) on the health of their paid search services (AdWords, AdSense).  And apparently, a significant amount of Google’s second quarter revenues resulted from insurance agencies and companies bidding for insurance related terms.

Insurance Keywords Most Expensive in PPC Bidding

Most Expensive PPC Keywords

Of course, cost-per-click is only part of the cost-per-lead story.  Well crafted (i.e., tested) ad copy coupled with effective ad landing pages might generate one lead for every 4 or 5 click-throughs.  But just because someone clicks on your PPC ad doesn’t necessarily mean they fill out your form.  Those that do become leads.  At the top end CPC of $54.91 for insurance terms, the best case scenario for cost-per-lead would be in the $200 to $250 range.  If your insurance agency’s quote to conversion rate is 25% then actual customer acquisition costs for PPC would be up around $1,000.  If your ad and landing page are not well crafted and lead quality or inconsistent sales management result in lower ultimate conversion costs, then customer acquisition costs could easily be $2,000 or more.

So, does PPC make sense for your insurance agency?  It certainly makes sense for Google.  It might make sense for your insurance agency as well, considering that most agency customers stay on board over several renewals.  If annual average commission is high enough, the lifetime customer value might justify the lead cost through PPC.  But cash flow would take years to balance out – not every agency can take a hit to cash flow that won’t be recovered for several years.

Infographic:  WordStream

 

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