By Adrian Dayton and Adam Stock
An entrepreneur who had just sold his business for $20 million explained two fundamental rules of business this way:
“There are really only two things that matter in building a successful business,” he replied. “How much one unit costs and how much you can sell that same unit for.”
He explained that nothing he learned in business school was more important than understanding the cost of goods and pricing. Those two factors more than any other determine the success or failure of a business.
Law firms need to understand a similarly vital calculation when it comes to digital marketing: How much are firms paying for each set of eyeballs that looks at their website? How can knowing this help firms make better strategic decisions in their marketing spend?
Los Angeles firm Allen Matkins Leck Gamble Mallory & Natsis studied its web marketing spending and was surprised to learn that some types of exposure online were very low-cost (like blogging) while others were extremely expensive (like the various lawyer-rating services.)
The calculation was a simple one. He divided the amount spent on the website, blog or, aggregator by the number of visitors to each particular destination. This calculation gave him a per-view or per-impression cost.
To test his findings, we sent a survey to a dozen firms, and five returned data concerning their marketing. Perhaps the biggest surprise to both of us was that many firms (even very large ones) had never looked closely at these data; most had never tracked their spends and compared it with results. This is major strategic error.
A firm’s web traffic tells a story. It tells what is working for the firm and what is not. Once firms understand the price they are paying for web traffic, they can make better-informed decisions about creating content, whether in the form of legal alerts, articles, lawyer bios, or blog posts.
According to our research, based on reports by a mix of midsize and large firms, the cost per click on firm websites was between 2 cents and 7 cents. For blogs, the range was wider — 2 cents to 10 cents. This reflects the fact that some firms use free blogs while others use paid services; there are companies that aggregate blog and website content and distribute them for a fee.
JD Supra, for example, is an aggregator that shares your content online via Twitter and LinkedIn and sends weekly digests through email. Lexology provides a similar service, but works with organizations such as the Association of Corporate Counsel, so some percentage of the audience is highly targeted. Mondaq redistributes news information to a variety of media outlets. Our research showed the cost per-view for these services ranged from 6 cents to $1.
We found that by far the most expensive cost per page views were charged by some of the lawyer-rating services — $1.25 to $2.50 per page view. At these prices, the data don’t indicate that this is a bad deal — just more expensive than the alternatives.
Many consumer-based law firms use a service called pay-per-click advertising — firms pay to land at the top of Google results, then a fixed amount for each individual who clicks on the link. A click from a search for “automobile accident” might cost between $15 or $20, while more specialized clicks from a search for “mesothelioma lawyer” might cost as much as $100 each.
Is it worth paying these high prices? Often, the answer is yes. For a personal injury case worth millions in fees, it is worth it to spend tens of thousands of dollars on pay-per-click advertising. For bankruptcy or employment law, it might not be worth the price.
The most important lesson of pay-per-click advertising is that traffic is valuable, and when firms can generate substantial traffic for less than $1 per click, they are getting a bargain.
What worth are impressions, if we can’t convert?
A personal injury lawyer can track a prospect from the point he fills out a form on the website until he is signed as a client. This process is not quite as simple for business-to-business lawyers. Quality web content in the form of legal alerts, blogs, and articles makes an impression and may even cause the phone to ring, but conversion depends on a lawyer’s reputation and ability to close.
Lawyers often complain, “I just don’t see the types of clients that hire me reading blogs posts.” Very few people read blog posts for fun — the vast majority read them to help solve business problems. If a firm can create content that consistently does that, new relationships and new work will follow. As firms track their analytics, they will see this borne out.
Paramount is paying attention to the analytics. What is your firm paying for traffic? Are you getting your money’s worth? The next time lawyers at your firm ask to be featured by a rating service, show them the statistics. Show them how they can get five or 10 or 100 times the traffic for the same price by using blogs or aggregators.
This is not a complicated equation — it is as simple as buying low and selling high. That should be a concept that even the most stubborn lawyers can grasp.
If your firm would like to participate in the survey, email email@example.com. We are sharing the full survey results only with participating firms.
Adam Stock is the marketing and business development director for Allen Matkins Leck Gamble Mallory & Natsis. You can find him on Twitter at @adamlstock or view the firm’s content at http://allenmatkins.com. Adrian Dayton is an attorney, social media strategist, and author of two books on social media. His second book, “LinkedIn and Blogs for Lawyers: Building High Value Relationships in a Digital Age” (West Publishing) is co-authored by Amy Knapp and is scheduled for release in January 2012. You can follow @adriandayton on Twitter.