How To Calculate Your PPC Budget: A Guide For Healthcare Companies
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Pay-Per-Click advertising can be tricky for healthcare companies. You need to intuitively plan it.
Otherwise, you may lose money with Google, Facebook, or any other PPC advertising channel. We’ll not let that happen!
According to WordStream’s Benchmark Report, the average cost per click (CPC) and click-through rate (CTR) in Google Ads across the healthcare industry are $3.13 and 3.82% on the search network respectively, while the average CTR across all industries is 5.06%.
Essentially, your PPC budget will be informed by your industry CPC and CTR and how they translate into new patients.
Your budgeting process needs to be prioritized. Don’t make it an afterthought. This is the only guaranteed way to acquire more leads, increase patient volume, and maximize your ROI.
You may have the budget, but TV commercials, as traditional and popular as they are, might not cut it for your healthcare company.
Swedish Covenant, a medical center that services the Chicago area, was running a 30-second TV commercial about its orthopedic capabilities. By complementing it with a digital campaign, it generated an 8.35% conversion rate, with a $119 average cost per lead for their orthopedic service line.
In this article, we’ll take a deep dive into the seven steps (and essential rules) you should follow when calculating your PPC budget.
But first, let’s get the basics out of the way.
PPC Budget: What Should Yours Be Like?
To stay on track with your PPC strategy, you need a predefined PPC budget. This will be immensely helpful when you start researching and bidding for keywords to target in your campaign.
You need to set benchmarks and goals and plan for the short and long terms.
That being said, there’s no standard PPC budget that’s acceptable to all healthcare companies, and there shouldn’t be. After all, advertising goals and spending change over time, and so do budgets.
“You can’t dive into Google Ads and blindly bid… But with some smart competitor research and regular check-ins on your PPC efforts, you can quickly begin understanding where to invest your PPC budget to gain the best ROI,” says Sarah Mehlman, Sr. Marketing Intelligence Specialist.
That said, there is no static number on what you should spend on paid advertising, and there shouldn’t be. After all, goals and spending change, and so do budgets.
For healthcare companies, in particular, your PPC budget should largely depend on a few key factors–such as:
- The cost of your industry’s keywords (e.g., Chiropractor near me, dentist in NY)
- Your website conversion rate
- The average lifetime value (LTV) of your patients or clients)
Check Your Vitals First: What You Need to Know About PPC
Healthcare advertising is a behemoth and the growth has been exponential in recent years. It’s projected to reach a market value of $24.7 Billion by 2026.
Pay-Per-Click advertising is powerful for creating brand awareness, and generating leads in your locality and globally, and it’s an invaluable tool for increasing sales.
Both paid search and paid social (which are the two main PPC advertising channels) outperform influencer marketing and offering discounts/coupons when it comes to lead generation, according to Databox.
With PPC, your healthcare practice or brand can generate high ROI (if you follow the steps below).
It’s all about investing in strategic healthcare marketing.
Before we get to the numbers and how to calculate your PPC budget, let’s go through a few important things you need to know about PPC.
- As a Pay-Per-Click advertiser, you’ll be charged a fee each time your ad is clicked.
- Google Ads, Facebook, and Bing are among the most reliable and popular pay-per-click channels.
- You can maximize your PPC budget with retargeting through AdRoll, which gives you the chance to re-engage visitors who saw/clicked on your ad but didn’t take the action (such as visit your website or call your phone line) you intended.
To effectively calculate your PPC budget, you need to keep your team abreast of the intricacies of healthcare search engine marketing.
Next, let’s take a look at the various PPC strategies available to your healthcare company.
Planning Your PPC Campaign: What Types of Campaigns Should You Run?
Not all PPC advertising campaigns are created equal. Some are geared towards creating brand awareness, while others are recommended for lead generation or increasing web traffic.
Here are the different types of advertising campaigns available to healthcare companies:
- Search: Run text ads that show on search engines such as Google and Bing.
- Display: These are image-based ads and publisher websites and social media platforms. You can purchase these ads on the Google Display Network (GDN) or other ad networks such as Outbrain.
- Social Media: Pay for text or image-based ads that will show up on your target audience’s social media feed. Healthcare marketers mostly prefer Facebook over Instagram or LinkedIn for paid social media ads.
- Remarketing: Effectively re-engage people who have previously engaged with your company online (form fills, blog visits, website views, etc.).
There’s no limit to how many campaign types you can run for your healthcare company–if you have the budget to do so.
So what should your PPC budget be for these advertising campaigns?
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How To Determine Your PPC Budget: 7 Steps (and Rules)
Deciding on a PPC budget is pretty similar to getting a vaccine–your reactions may vary–you might feel a little pinch.
Let’s help you approach your budgeting process with care. To stay healthy, keep these seven steps in mind when preparing a PPC ad spend budget for your healthcare practice:
Step 1. Selecting keywords for your ad copy
When potential patients and clients are looking for your services or center, what search terms are they using?
For dentists or dental centers, these search terms could be:
Dentists near me
Best dentists in Chicago
Dental implant services
Note: Google Keywords Planner shows you a list of search terms to target when you start your campaign. It doesn’t matter the special medical keywords (cosmetic, non-surgical, liposuction, etc.), the free tool can be very helpful.
Whatever healthcare expertise you want to promote with PPC advertising, focus on keywords or search terms that show immediate intent to purchase.
The keywords above are good examples. You can replace ‘dentists’ with your profession, for example, Chiropractor near me, best chiropractors in NY, and so on.
When you target these types of commercial-intent keywords, you’ll increase your click-through rate (CTR) and conversion rate.
You may start targeting low-intent keywords later on, once you have acquired some patients.
Step 2. Research search volume trends
How many potential patients do you want to reach with your pay-per-click ads? If you want to reach 50 new patients in a week, then it should influence the keywords you select based on their search volume.
Google may not even show your ad if you target a low-volume keyword. It may show your ad but the impressions (how many times people see it) will be pitiful.
But don’t completely ignore keywords with low search volume, as these can be advantageous, especially for healthcare companies that are just getting started.
There will be lesser competition and lower CPC (cost per click).
On the other hand, if you target keywords with high search volume, it’ll often mean higher CPC and competition. In turn, you’ll need a bigger initial budget to break even.
So find a balance between high search volume and low search volume keywords.
This will help you determine your PPC budget effectively.
Step 3. Identify CPC (Cost Per Click) estimates
While you’re busy researching keywords and search volume with the Google Keyword Planner, you’ll often come across CPC estimates.
CPC estimates measure how much money you’ll be charged every time someone clicks one of your ads.
Even though high search volume keywords may command higher CPC, it’s not always a bad thing.
With enough data, you can predict whether or not the clicks will result in leads and sales.
Step 4. Target geographic areas important to your healthcare practice
The location of your target audience will affect your ad spend, and ultimately your budget.
Most healthcare practices are looking for patients and clients in specific geographical locations–especially in cities, towns, and states near them.
As a local healthcare company, you’ll be on the winning side if you target a small radius of your center when getting started with PPC advertising.
If your medical center is located in Houston, for example, it’s probably in your best interest to run pay-per-click advertising campaigns to target residents in this area and its environs.
As you scale your healthcare services and influence, you may run a nationwide campaign to reach more people.
Step 5. Execute PPC ads at specific times
A great way to maximize your ad spend is by running ads at specific times of the day when your target audience is mostly engaged or active online.
With any PPC advertising channel (such as Google and Facebook), you can control how often and when your ads show–and ensure they show up at the most profitable hours of the day.
You can encourage new patients to call your phone line or visit your center by scheduling call extensions or call-only ads.
These ads will ONLY run when your phones will be picked up or you’re ready to take a call.
You don’t want people calling your phone and feeling disappointed because no one was there to man it. This is bad for your PPC health.
Step 6. Target devices that are specific to your audience
Do new patients use their mobile devices to search for your services? If yes, then you should run PPC ads to target mobile devices specifically.
According to the State of Healthcare Advertising, 68.2% of U.S. health and pharma digital ad spending goes to mobile, while 31.9% was spent on desktop channels.
Perhaps, prospects start their research via mobile and end up with their desktop.
This means the journey is multichannel–and should be accounted for when you’re bidding for traffic based on sources.
Step 7. Monitor your ad position, ad spend, and conversion metrics
You need to track your KPIs (key performance indicators) whilst your ads are ongoing.
This is vital if you want to gauge how successful your PPC advertising campaign is and figure out effective ways to optimize them.
If you observe that some high-volume keywords are not converting into new leads as is required to be profitable, you might want to make some adjustments.
What about the positions of each keyword?
Did you notice that some keywords are performing better at lower positions than in higher positions on the SERP (search engine results page)?
Remember that SEO and PPC go hand in hand. Keyword research is essential and there will be keywords you should double down on to improve your overall campaign’s success.
Will PPC Be Profitable For Your Healthcare Practice?
With your first pay-per-click ad campaign, you’ll discover some patterns with keywords.
If there are some reasonably priced keywords for your healthcare service, along with a sizable number of potential patients searching for those keywords each month, then you have some winners.
Next, look at your customer’s lifetime value.
Essentially, you want to be sure of the value of driving the right people to your healthcare website or landing page, and gaining one new patient–whether it’s $250, $2,500, or $25,000.
Of course, these values are just for reference purposes. You know the value of a customer more than I do. So do your calculations.
If your healthcare website has been up and running for months or years, you can get a ton of data from your analytics.
You can use the site analytics to determine your conversion rates, or how often site visitors are turning into customers (i.e., patients).
For example, if the customer value on your dental care website is $200, clicks are in the range of $1–$2, and the conversion rate is pegged at 2%, then for every 100 people you drive to your website, two of them will call your phone or book an appointment to become a patient.
So your profit for those 100 clicks will be $100, primarily if your margin is baked into the value of your service.
Interestingly, if you increase your conversion rate to 7%, you’ll get 14 new patients, which means more money in your pocket.
Boosting Your Digital Marketing Strategy with PPC
Pay-per-click advertising can be a fun process but complex to implement. It’s pretty much like healthcare patients, every campaign is unique.
Your PPC budget doesn’t need to be set in stone. You can be as flexible and accommodating as you want–to ensure the health of your marketing efforts.
It’s time to take your healthcare PPC campaign to the next level. Use the formula as laid out in this guide to inform your decisions.
It’ll help you decrease your cost per click (CPC), maximize your cost per lead (CPL), and ensure your health plan thrives in today’s insane healthcare marketing competition and gets its return on investment.