If there’s one thing you’ve learned about legal advertising, it’s the importance of tracking your return on investment. After all, there’s no point losing your entire advertising budget on marketing tactics that don’t work—and one of these may be paid search ads for law firms. Paid-per-click ads, or PPC, are one marketing tactic that has skyrocketed in popularity in the last 15 years. Search platforms like Google make it very easy to put advertisements in front of your target client. Unfortunately, many small businesses do PPC ads incorrectly. You can waste thousands of dollars on pay-per-click ads, which is why it is critical to do it right.
Recently, a team of eBay economists performed an experiment: they shut off their paid Google searches in one part of the country to find out how it affected their profits. Surprisingly, they found that there was no appreciable decline in sales where Google ad purchases were shut off—allowing them to rethink their marketing strategy and save money that was essentially wasted. What was eBay doing wrong? There are many reasons a PPC ad does not perform well.
- Bad message match: Often, the PPC advertisement looks very different from the corresponding landing page.
- Poor keyword selection: Those new to PPC may not do enough keyword research to find out what terms their clients use to search for their services.
- Offer is not enticing: It is easier to get people to convert on a small ask versus a big ask. For example, a PPC ad that asks you to download a free book instead of spending many thousands of dollars.
The above items are just a few reasons a PPC ad can go wrong. The eBay study also highlights important considerations when deciding where and how to spend your marketing dollar:
- Niche marketing. The study underlines the importance of finding your advertising niche. Since eBay is renowned for selling used and hard-to-find merchandise, customers will naturally go to eBay’s homepage and then begin a search, rather than the other way around. Likewise, if you are known as being the go-to person for a particular service, people will seek you out first, and look for other sources later.
- Correlation errors. After retailers purchase keywords, they will usually evaluate their sales figures to discover if the advertising is working. However, the timeframe of the study can yield “false positive” results; for example, an uptick in sales during a year that a competing business closed, or during a month that you usually see an increase in business.
- Popularity. You may not have noticed, but the more popular a business is, the less they have to advertise. Until recently, Starbucks never purchased advertising in print or on television; instead, they invested their ad budget on new locations. Instead of a billboard with a cup of coffee on it, you could get an actual cup of coffee—and the logo you took with you on the cup was added promotion. Similarly, eBay has dominated the market to the extent that they have created a huge customer base, which is why paid searches are less profitable for them.
This study could be a marketing breakthrough for well-established businesses. Since Google search ads are only effective for new and infrequent users, local merchants may only need to spend money on these ads while getting a foothold in the business—and others may not need to use them at all.