What is SEM?

Search engine marketing (SEM) on search networks refers to ads that appear in Google/Yahoo/Bing search engines. These are typically above, to the right and below the organic search results.

Benefits of SEM on search networks

Firstly, unlike organic search engine optimisation (SEO), SEM can immediately position an advertiser on the front page of Google (and other search engines) for all desired key phrases.

Secondly, ad targeting and scheduling can lock ads to display only to a desired demographic. For example, display ads on the key phrase ‘vet perth’, to people in Perth between 9 am-5 pm weekdays or ‘emergency vet’ to people in Perth on weekends or weeknights.  Each key phrase can have a tailored message and different landing page within your website.

And finally, AdWords can support an SEO campaign by enabling companies to immediately rank for key phrases that may be a long-term SEO target. A short-term SEM campaign is recommended for all sites which are newly launched as SEO results will typically take at least three months to gain traction.

Advertising on non-branded key phrases (key phrases that do not include your practice name/brand) such as ‘vet perth’, ‘vet $suburb’ or ‘emergency vet perth’ will attract new customers who were not immediately considering your clinic. As you are likely to retain your customers for some years, a small outlay for a paid result should in the long run have a positive ROI.

How do search networks charge?

Search networks typically charge via a CPC (cost per click) model.  This means that there are no charges until an ad is clicked on. As a simplified view of how search engines charge for CPC, ads are ranked by how much an advertiser is willing to pay for a click.

The advertiser who is willing to bid the most for a click will be awarded the highest ad position. Once an advertisement has been clicked on, the advertiser is charged the amount they were willing to bid for the click. All campaigns have a daily budget, which means that once exhausted, ads will stop being displayed. Estimating how much it will cost to attract a customer.

At the time of writing, the average cost per click for the key phrase ‘vet perth’ was $2.30 with Google AdWords. Using a table which shows a range of possible website conversion rates we can estimate what it might cost to attract a new customer with AdWords.

Considerations

The following assumes that your AdWords account is being managed professionally and that you are attracting the right type of visitors. A poorly-run campaign will not have a good conversion rate or similar CPC figures. As a very broad average, a relevant, aesthetically pleasing website with good quality information can achieve a three per cent conversion rate. For example, you will need to attract 33 people to your website before it generates a lead.

With the above in mind consider the following

The table above shows that a veterinary website with a three per cent conversion rate, paying $2.30 per AdWords’ visitor will accrue $76.66 in AdWords charges before generating one lead (phone call or email). If one in three leads becomes a sale (change these figures to suit your estimate) the final cost is the cost per lead multiplied by three (change if necessary) to give the cost per sale estimate of $229.98.

Note: If you have your AdWords account professionally managed by an agency, expect to pay an additional monthly agency management fee. This cost will vary depending on who you choose and what level of reporting you require.

As you are likely to retain your customer for some years, an outlay of $397.72 for a new customer should in the long run have a positive ROI.