This is the second post in my series on cutting waste from a law firm’s budget. My last post served as an overview of this series. The need to cut waste from your budget is obvious – getting rid of useless expenses will equal an increase in profits. I’ve dealt with many attorneys who want to solely focus on revenue as a way of growing their income. They fail to realize that they can also make more money but cutting overhead. In this post I’m going to look at a big one – the fact that many lawyers pay for pay-per-click management.
I’ve written at length, many ‘a time, as to why attorneys should avoid pay-per-click. The reasons for avoiding the PPC trap altogether are clear – it’s a horrible use of your money when compared to other ways of generating business. While I’m adamant that the best way to get your costs under control is to avoid paid search placement completely, the bottom line is that many attorneys continue to rely on PPC. They are wasting money by having someone else manage their campaigns. Let’s take a look at why this cost is unnecessary, why using a manager is decreasing the overall effectiveness of PPC, and why your pay-per-click manager may have a conflict of interests.
Lawyers reduce the effectiveness of pay-per-click (PPC) by having a third-party manage their campaigns
There are many companies out there which offer pay-per-click management. Essentially they charge a percentage of your advertising budget as an administrative fee. So, for example, if this fee is fifteen percent then every $100 you spend on advertising will result in $85 going to ads and $15 going to the manager. The problem with this expense is two-fold. First, it is completely unnecessary and, second, it lowers the overall effectiveness of any such marketing.
Expenses paid to a PPC manager are unnecessary. Setting up a pay-per-click campaign is relatively easy, does not require extensive computer skills, and the campaign is easy to manage after it is set up. You can create a Google Adwords account, list your desired key phrases, set your geography, and set your keyword bids in less than an hour. Once this is completed there is no ongoing maintenance required. The only reason you would need to login to the account again would be to adjust bids, turn the campaign on or off, or to add new keywords. Any of these changes can be made in a few easy minutes. What this means is that a PPC manager is taking a small amount of time to set up your campaign and is then devoting very, very, very, very, (very) little time to managing it. All the while he or she is taking their fifteen percent. In other words, their hourly billing rate is probably actually higher than yours. Want to reduce an overpriced and unneeded expense? Stop paying someone to manage pay-per-click (again, we suggest avoiding pay-per-click completely). Or you can just keep on going this way and run money through the paper shredder just like this:
Lawyers also reduce the effectiveness of any paid marketing by relying on a third-party to manage the campaign. Let’s say an attorney is paying $25 for a click through Adwords. This means that $1,000 in marketing will result in forty clicks. If you average one client per 20 clicks then you get two retainers out of it. Now let’s look at the same numbers if you’re paying a fifteen percent management fee. That means you have to pay $1,150, rather than $1,000, to get those same two retainers. Think that extra fee doesn’t add up over time? Well if you spend $3,000 per month on Adwords then you can save $5,400 a year on your marketing expenses by taking the whopping few minutes necessary to manage your own campaign. Let’s say you spend ten hours a year performing that management – you would be saving $540 per hour for performing this task. Not a bad rate.
Those who manage pay-per-click for attorneys may have a conflict of interest
One of the biggest problems with lawyers using a pay-per-click manager is the potential conflict of interest. It’s important to remember that paid clicks are based on a bidding system – how high you rank for those phrases is based on how much you bid for them. Let’s say that Attorney Joe and Attorney Bob both practice family law and they are serviced by the same PPC manager. They both want to bid on the phrase “my city divorce lawyer.” Well Joe wants to rank higher than Bob so he ups his keyword bid. Bob then sees his ranking drop so he ups his bid. This begins a cycle of these two attorneys driving up the cost for every time that particular phrase is clicked. All the while the PPC manager is making fifteen percent of these increasing bid amounts. In other words, the PPC manager’s profit margin goes up as a result of this bidding war while the the attorneys’ profit margins keep going down. Big issue.
Again, we are adamant that attorneys should not use pay-per-click at all. We strive for clients of our attorney website & SEO service to do well in organic search and we discourage the use of PPC. Furthermore, we only work with a limited number of attorneys at a given time, and per geographic region, so that our clients are not competing against each other in organic search. If someone is managing your marketing then don’t be shy about asking them about possible conflicts of interest.
Why do you feel attorneys rely on PPC managers as opposed to running their own campaigns? Please chime in through the comment form below.