One of the most important qualities of an SEM (Pay-Per-Click) strategy is the ability to convert site visits into actual lead opportunities. After all, besides the branding lift associated with site traffic, your most valuable visit is the one that turns into an action that benefits your agency’s bottom line. When it comes to paid search traffic, the desired action is to either:
1) Complete an online quote request form, or
2) To contact your office via dedicated SEM phone number
Both have a bigger impact on your policies activated than a simple click.
Of the myriad metrics that are available to us in SEM to determine performance, the one that tracks our ability to transition clicks into leads is called conversion rate. This ratio is simply the total number of contact points over the total number of site visits, and looks like this:
Conversion rate = (SEM phone calls + SEM quote forms completed) / total SEM visits
To that end, I am always tracking the SEM department’s performance at converting traffic into leads by comparing our client’s performance to industry-specific benchmarks. A recent study shows just how effective the Astonish SEM program is at driving valuable traffic to your agency’s site.
Pay-Per-Click vendor Wordstream just finished a study on SEM spending and conversion rates amongst some of the more competitive markets in the search landscape, and it highlighted some interesting findings.
First of all, to no one’s surprise, the Finance vertical (which includes and is heavily influenced by insurance-related searches) was the most competitive landscape in paid search advertising. The top two advertisers amongst this group were State Farm and Geico (again, unsurprisingly). The costs and conversions were the highest amongst the industries, highlighting the importance of having a dedicated SEM program to help you navigate this important, but crowded, marketplace.
Second of all, and something that I found most interesting, was that this presented a couple of benchmark metrics for Astonish to use in assessing our own client’s performance. The one that sticks out to me is the average conversion rate (the % of people who completed an action after clicking on a PPC ad) across the entire industry is just over 6%. I’m pleased to say that Astonish PPC conversion rates are exceeding that industry benchmark. In 2012, 10% of all paid search visitors (to Astonish clients’ sites) are converting to a quote request form completed. This means that Astonish SEM campaigns outperform the industry by a whopping 66% when it comes to converting everyday traffic into leads.
Author: David Osowa is the Director of Search Engine Marketing at Astonish. He manages and optimizes hundreds of PPC campaigns on behalf of Astonish clients to get them the best possible lead opportunities available.