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The High Price of Insurance Keywords

Every company hopes to be the top result on Google, but it is often not feasible to win that coveted spot. Thanks to AdWords, Google’s advertising platform, companies that struggle with organic search can show up on the first page of results—and place themselves above the biggest players in the industry. Unfortunately for insurance agents, paid search is often not a feasible option either.

AdWords operates like an auction in that the highest bidder on a keyword wins. Not all keywords are priced the same, of course, as the most popular keywords often drive the highest prices. According to research from WebpageFX and SEMrush, the insurance industry contains some of the most expensive keywords around. Keep in mind these numbers are estimations, but they show a staggering trend for how much companies are willing to pay to bring qualified consumers to their website.

The Top Insurance Keywords

Insurance keywords made up 6 percent of the top 100 most expensive keywords on list, with “Austin TX auto insurance” commanding a whopping $388.58 for a single click. Other location-specific keywords and general keywords showed up on this list, including “Dallas TX car insurance” ($329.30) and “how to get cheaper auto insurance” ($309.32). Though not appearing in the top 100, most insurance related keywords carry shocking price tags: “car insurance quotes,” for example, still can cost up to $70, while other industry rates for paid search terms range more along the lines of $10 to $20 a click.

With a PPC campaign, you only pay that amount when the ad is actually clicked. While that does bring the viewer to your website, it doesn’t always translate into a qualified insurance lead.

How Cost Per Click Leads to Cost Per Conversion

Using AdWords to generate leads is a multistep process, as once a user clicks your ad they must then decide to provide their information, use your service or purchase your product. The average click-through rate (CTR) for AdWords is reported to hover around 2 percent; this means that for every 1,000 impressions, 20 people clicked the ad. For a keyword like “Austin TX car insurance,”20 clicks would cost a company about $7,770 if it paid the predicted amount from WebpageFX and SEMrush’s estimations for the keyword.

But it’s not the end of the journey after users click the ad. They are then directed to the landing page, which ultimately does the work of convincing them to convert. The conversion rate of AdWords campaigns depends upon many factors, and it is a number that is hotly debated. Some say the average is as high as 6 percent, while others claim it to be a mere 1 percent.

In the case of a keyword costing $388.58 per click, this means the cost per lead would range from $6,476 all the way up to $38,885. This cost per click is at the extreme of the spectrum, and many industry professionals would consider a 100 percent conversion rate for a $388.85 cost per lead still too high.

If we are to take the cost per click from the highest extreme to a more realistic number, such as $10 per click, the numbers still show a willingness to pay big money for a single lead. Even with a 10 percent conversion rate, the cost per lead would be $100. A low conversion rate of 1 percent would mean paying $1,000 for a lead.

Quest for Conversions

Regardless of price, the landing page is the main driver of conversions, and must be optimized for this purpose. Optimizing a web page for conversion is no simple task and often requires some outside expertise, another cost for which the company must pay.

Even then, the leads that come from clicked ads may not be the quality leads you’d expect. For large companies like Progressive or Farmers—who already have a legion of loyal customers and the power of a known brand—a few good leads at a high price does not make a large dent in their overall advertising budget.

The current industry means insurance keywords are often dominated by the bigger players, such as the above-mentioned Progressive and other carriers. For individual agents, competing with such a company for a single keyword (and then, just a few good leads) is not the most economical use of budget. Users searching for these keywords will often select what is most familiar to them, in this case, the big brand.

Using a provider of qualified insurance leads makes more sense for smaller players or those who are not willing to pay premiums for one lead from a PPC campaign. While PPC campaigns can work for some businesses, the competitive insurance industry is often too pricey to be valuable. 

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