"Will Pay-Per-Click (PPC) Ads Help Me Generate More Leads?"

Q: Someone suggested advertising online to get more prospects to my website. Will Pay-Per-Click (PPC) ads help me generate more leads?

A: The short answer is "YES," pay-per-click ads will probably bring more visitors to your site and, if you've invested in your website design and have a quote engine, it should generate more leads for you. But those leads come with a cost, and depending on how you manage your campaign, PPC ads may actually prove to be a money-losing proposition.

PPC ads are effective methods for bringing online consumers to your website. Unfortunately, not all visitors convert into leads. And as you already know, not all leads convert into submissions and commission checks.

The sad truth is that for many agents, PPC ads will not work. Yes, they can generate traffic and leads. But you may be able to get better quality leads at a much lower cost from a reputable lead provider.

How PPC Ads Work

As the name suggests, PPC ads will charge you every time someone clicks on your ad and is taken to your target webpage. You're paying for each online visitor delivered by that advertisement.

This is a step above traditional ads that charge you whether or not they bring new prospects to your door, website or phone. PPC ads can also be targeted to a specific keyword audience. Your PPC ads can be automatically placed only on websites that contain your target keywords or when someone types those keywords into a search engine form.

The biggest PPC ad provider is Google. Their AdwordsT program lets anyone set up an account and buy ad placements based on keywords. For example, let's say you want your PPC ad to appear only when the consumer is searching for "affordable California health insurance."

When someone types in those four words into the Google search engine form, your ad will appear along the right column of the results page - if you pay enough.

That's right. There's no flat rate for most PPC ads. Advertisers have to bid on keywords. The highest bid will receive the top position on the first page of search engine results. If your bid is low, your ad won't appear until later pages - if at all.

What's your CPL and ROI?

When you examine a PPC ad's cost per lead (CPL) or return on investment (ROI), you quickly see why most agents don't bother with PPC advertising.

PPC ads only deliver potential shoppers to your website. How many of these visitors will turn into leads? And how many of these leads turn into actual revenue? And what will those PPC leads cost you?

Those are all important questions you should answer before you invest too much money into PPC ads. Fortunately, it's easy to gather that information:

• Visitor conversions
  How many of your visitors convert into leads? Your website can track how many unique visitors come to your website each day, week or month. Compare that to how many new leads your website generates during the same period to determine how many of your visitors turn into leads.
  
  Better yet, if you do run PPC ads, make sure that consumers who click on those ads are taken to a specific landing page (not your home page). It'll be easier to keep track of how many visitors you get from those ads and how long they stay - as well as where they go after that landing page.
• Lead conversions
  How many of your leads convert into submitted and placed applications that earn a commission? That should be pretty easy to calculate, since you should already know how many leads you generate and how many apps you submit and place.
• PPC ad costs
  Finally, throw in the cost of your PPC ads and you can see how much those leads really cost.

For example, let's say that only 1 out of every 10 visitors turn into leads and that you pay $20 per PPC ad click. That means that you'll have to spend $200 before you get a lead from your PPC ad campaign.

For that same $200, you can probably get 10 high-quality exclusive leads from a reputable lead provider!

Does $20 seem high for a PPC ad? If you're targeting keywords such as "health insurance" or "affordable health insurance," it's not uncommon to pay $30 per click!

PPC Options

After all of that, there are ways to make sure that you can actually profit from your PPC ads. The basic rule of thumb is to only bid what you know will turn a profit.

For example, if you can buy comparable leads for $8 and only 10% of your PPC visitors turn into leads, then you don't want to pay more than 80-cents for each click.

That won't get you very many leads. But the leads you do get should prove to be a little more profitable.

Another strategy to consider is to look for niche keywords that are lower in demand. That usually makes them cheaper.

Finally, regardless of the strategy you decide to use, make sure that your website is ready to receive PPC-driven visitors. A professionally designed website with a 24/7 self-service quote engine can increase the percentage of your visitors who convert into leads.

With higher conversion ratios, you can actually afford to pay a little more for PPC ads. And in that case, it would make sense to invest in PPC ads.