Many dentists (and other small businesses) are trying pay-per-click (PPC) more and more. It’s a great way to reach a targeted audience, and you only pay when someone clicks your ad. Plus, it’s a quick way to get noticed on page 1 of search results. If you’re considering PPC as part of your marketing mix, you’ll soon come to ask “how much should my dental practice spend on PPC?”
While this may seem like straight-forward question, there are many factors to consider. Instead of looking for a set budget, it’s recommended that you look at your budget as a result of a mathematical equation where you introduce variables such as cost-per-click, conversion rate, and competition.
Cost-per-click (CPC) is the cost of someone clicking your ad. It’s calculated by which keyword(s) you target within your geographical location. For example, the keyword “dentist” may cost more in downtown Chicago than a rural area. CPC can be found using AdWord’s keyword planner.
Next, you’ll want to define your conversion rate to estimate how many new patients you may get from your ads. Conversion rate tells you how many leads (people that click your ad) turn into your new patients. For example, twenty people may click your ad, five people may fill out a form, and only 1 may turn into your new patient. Wordstream estimates that health professionals can expect a conversion rate of about 2.51%. Keep in mind that this is simply a starting point and will change once you start running your campaign.
You will also want to define your overall goal of running PPC ad campaigns – how many new patients do you hope to attract each month via this marketing channel?
How to Calculate Your Starting Budget
Once you define your overall PPC campaign goals, CPC and conversion rate, you’ll want to take the following steps:
1. Take the # of patients you want to attract each month and multiply that by the conversion rate. In this case, let’s say we want one new patient per month, meaning we need at least 5 total conversions that month.
2. Calculate the amount of clicks you’ll need to get five conversions. Using the conversion rate above, you can estimate how many clicks you’ll need.
5 conversions / .0251 conversion rate = 199 clicks
3. Calculate the cost of clicks by multiplying the amount of clicks needed by the CPC. For example, if the CPC to bid on “braces” in San Jose is $7.03/click, you would need a monthly budget of $1,400 to target “braces” patients in San Jose.
Things to Consider Before Starting a Campaign
1. Targeting and competition. Wherever there’s higher competition for a keyword, the cost will be higher. So, the more dentists bidding on the same keyword in the same geographical location, the more expensive bidding can become because competition drives the price up.
For example, cost for the keyword “braces” in San Jose, CA differs from the cost in Omaha, NE where CPC is $7.03 and $6.40, respectively.
2. Quantity and quality of keywords. Naturally, the more keywords you target, the more it will cost to support your advertising. And, certain keywords will bring in more revenue than others. For example, keywords about cosmetic procedures such as veneers and dental implants are a common service dentists like to advertise because the people looking for those services generally have disposable income and can afford to spend more.
3. Budget distribution. There are ways to allocate your budget across various geographical locations, demographics and time of day. For example, you may choose to run your ads only on weekday evenings because that’s when your target audience searches for dentists – after they get home from work. Knowing how to prioritize your budget allows you to stretch every penny you spend on PPC.
All in all, there is no one-size-fits all budget for dental practices. Ultimately what matters how much competitions there is in your marketing how much you’re willing to spend depending on your findings. It is possible to be profitable with PPC but you may find that you’ll need help understanding where to start and how to manage your campaigns.
Dental Pay-Per-Click Rates Can be High
Depending on your local market, dental pay per click rates might seem high, in some areas they might even be described as exorbitant. This is because PPC works. PPC rates are fairly self regulating. Before walking away from a high CPC, carefully consider the monetary value of each new client. If you are in a highly competitive market you will pay more for these visits, but remember: if it didn’t work, people wouldn’t be doing it.
To learn more about PPC, download the FREE whitepaper, A Dentist’s Guide to Getting More Profitable Patients with Google AdWords, by filling out the form below: