Why pay-per-click advertising isn’t worth it for financial advisors
Financial advisors are better off focusing on other business-building methods.
A big part of a financial advisor’s day is working on business development. More business means a more significant bottom line. No matter how big your firm is, there are always more referrals to ask for, more accounts to get, and more clients to prospect.
With that said, the sky is the limit when it comes to the growth of your business as a financial advisor. However, as busy professionals, financial advisors may feel like they only have so many hours in each day.
Therefore, it is best to utilize the business-building methods that provide the greatest reward for the lowest initial investment, whether it is in the form of time, money, or other resources.
In my work as a financial advisor coach, I have come across many advisors who are learning about inbound marketing and digital marketing. Many do not know the difference and often hire “experts” to help them attract traffic to their websites using pay per click advertising with google.
Pay-per-click advertising has become a popular method of advertising in the digital age. But, is it worth it for financial advisors to use this method in their Business Plan? Let’s find out.
What are paid traffic sources for financial advisors?
Paid traffic simply refers to any website traffic that you pay to obtain. As long as you exchange money for website traffic, you are receiving paid traffic.
There are two popular forms of paid advertising: pay-per-click traffic and paid advertisements. Today, we’ll be focusing our discussion on pay-per-click advertising.
What Is Pay-per-Click Advertising?
The majority of pay-per-click advertising on the internet occurs through the Google Ads platform. Therefore, we are going to discuss pay-per-click advertising in the context of Google Ads.
Put simply, Google Ads is Google’s paid advertising service. Ads that occur on the top or sides of website articles and Google’s search results are commonly paid for by businesses. What makes the pay-per-click model unique, however, is that companies only need to pay for their ads when someone clicks on the advertisement.
In theory, pay-per-click advertising may sound like a cost-efficient way to grow your business. However, it may not be the best way for independent financial advisors to grow their businesses.
Financial advisors – choosing between Organic Traffic vs. Paid Traffic
There are many ways to attract potential ways to your website. You can drive traffic to a website through paid methods. Or, you can organically grow your audience through search engine optimization (SEO).
There are many tasks involved in improving your website in terms of search engine optimization. These tasks include writing content, creating backlinks, guest posting, working on on-page SEO, and much more.
It may take you a few months to see new traffic coming from your SEO efforts. However, once traffic begins to roll in, the results tend to remain constant and tend to grow at a steady pace.
In the long run, organic traffic brought in by search engine optimization costs less than paid advertising methods. However, it is not so simple to implement an effective SEO strategy.
Is Pay-per-click Advertising For You?
In some unique cases, pay-per-click advertising may work as a useful supplement to your search engine optimization efforts. In most other cases, however, pay-per-click advertising is simply not likely to bring you the return on investment for which you were hoping.
The following are scenarios wherein pay-per-click advertising is simply not worth the cost.
1. If You Are Building a Foundation For Your Online Presence
As its name implies, pay-per-click advertising will require you to set aside a budget for advertising. This means that as soon as your ad ends due to a depleted budget, your advertisement completely disappears.
SEO, on the other hand, builds and accumulates over time. So, you will always have the fruit (website traffic) of your labor that you invested so much time in.
2. If You Are Competing With Larger Businesses
Many forms of pay-per-click advertising work according to a bidding system. This means that your advertising success is not only dependent on your ads and budget, but also the ads and budget of your competitors.
There is only so much space or advertising real estate available on the internet. Therefore, you’ll mostly have to bid high to obtain the ideal advertising space.
3. If Your Industry Has Strict Advertising Rules
Pay-per-click advertising platforms prohibit certain products and services. Even though financial advisors may advertise on pay-per-click platforms, you may be restricted in terms of what you can say in your ads. Also, many countries have their own policies regarding paid advertising.
When planning your advertising campaign, it pays to review all advertising policies. Policies in your country may differ, as well as policies on the advertising platform you choose to use.
4. If You Cannot Actively Manage Your Campaign
Managing any advertising campaign requires time and energy. Although you could choose to set and forget your campaign, you’ll only be able to maximize results through active management. If you work independently and do not have a team member available who can actively monitor and adjust your ads daily, pay-per-click advertising may not be for you.
A personal story about pay per click advertising: when I was starting out as a newbie Career and Executive Coach back in 2004, I created a Business Plan system for the coaching industry and I used Pay Per Click advertising to get traffic to the landing page. What I found what that I was competing against myself. I would go to google search, type in Business Plan for Executive Coaches, and there was my advertisement, and there was my organic landing page right underneath. I spent some money learning that Pay Per Click was not for me.
Why You Shouldn’t Use Google Ads
In the previous section, we discussed the various situations in which pay-per-click advertising is not ideal. Now, we’re going to touch on the multiple reasons why pay-per-click advertising via Google Ads may not be suitable for financial advisors when developing their Marketing and Prospecting Strategies.
1. You Pay for Clicks
On the surface, paying for clicks may sound like an advantage. You aren’t paying for any advertisement views that do not result in a click. However, rates have increased substantially in recent years.
Nowadays, a startup or new business is dropping at least $5 per click just to get people to visit their site. If that’s already expensive for small businesses, imagine the financial impact it will have on your budget as an independent financial advisor. Also, clicks do not even guarantee that the potential customers are going to purchase your services. Whenever someone clicks on your advertisement, you have to pay Google. This is regardless of whether that person became your customer or not.
This becomes a problem, especially when your ads attract visitors who simply enjoy browsing the web without having any intention whatsoever of spending money on your services.
2. Difficult to Compete With Big Companies
We’ve already touched upon this point earlier, but it deserves further explanation. Most small businesses and startups cannot compete with larger companies with large advertising budgets because pay-per-click ads are expensive.
Pay-per-click advertising was useful for small businesses many years ago. Back then, anyone could launch a campaign and pull in high-quality traffic at a fair price. As mentioned earlier, however, pay-per-click advertising has become much more expensive. This means that smaller companies will have great difficulty competing with larger organizations.
Thanks to the consistent cash flow of larger companies, they can drop hundreds of thousands of dollars per month on a pay-per-click advertising campaign. They have the time and the resources to do just that. This means that by the time a newly budding business launches, all of the related and relevant keywords have already been taken.
Take a skincare startup, for example. Let’s say that this skincare startup provides high-quality products and has got its marketing down perfectly. However, larger companies such as Estee Lauder and L’Oreal have already bought ad space for terms such as “moisturizer.”
This means that our hypothetical skincare startup will need to spend around $5 to $7 per click for that term. Remember, it isn’t even guaranteed that a click will convert into a sale.
3. Limited Number of Characters
When running pay-per-click advertisements that show up on Google’s search results, you are allotted only a certain number of characters. You can have up to 25 characters in the headline, 35 each in the two lines of text, and 35 more in the display URL. A character limit isn’t the biggest dealbreaker but can make running ads much more difficult.
Aside from all the other tasks you have to attend to, you are now forced to brainstorm an attention-grabbing headline, keywords, ad copy, and a compelling call-to-action. That’s difficult enough, but being restricted by a character limit makes it even more difficult.
Depending on how you wish to portray yourself as a financial advisor, it may become challenging to fit in everything you want to say into the character limit. This can prove to be a significant problem if your business has a long name or if you wish to target several keywords.
Put simply, you need to be able to write succinctly and concisely if you want to get the most out of pay-per-click advertising on Google.
4. Mistakes Can Be Deadly
We’re all human and are all prone to making mistakes now and then. However, most errors tend to have consequences we must face.
For example, has there been a time in your life when you left the faucet running? Pay-per-click advertising is very much like our proverbial faucet. If you’ve forgotten to turn off an ad campaign or if you haven’t set a cap based on your budget, you can quickly burn through thousands of dollars in advertising expenses.
The problems do not stop here. Let’s say you made an error linking the pay-per-click campaign to your website’s landing page. For some reason, there’s a typo in the linked URL. Google is going to penalize you. You may be paying for clicks that lead to the wrong page! A simple oversight like this can cost you a lot of money.
5. It Doesn’t Fit Your Niche
You may be a financial advisor that is happy to work with every demographic. Great! However, most of my financial advisors clients tend to create a niche in the market for them to specialize in. Some financial advisor clients specialize in unique target markets to help them maximize inbound marketing to their websites.
Just because you’re advertising on the largest search engine doesn’t mean your target audience is going to find you.
Let’s say you’re a landscaper who’s confident in doing everything from cleaning up a yard, planting trees, and removing snow. A potential customer may simply search for “lawn care services” and get search results that do not reflect all of the services you may offer.
For particular niches, Google’s pay-per-click platform simply isn’t a good choice. You may consider growing your business through other means, such as search engine optimization.
One of the best ways to expand your reach and attract new clients is to ask for referrals from your current satisfied clients. However, that may not be enough.
If you believe it is time to ramp up your marketing efforts, you may need to think outside the box and explore emerging methods of advertising. Pay-per-click advertising is an option, but only in specific cases. More often than not, independent financial advisors will have better luck through other inbound marketing mediums.
I believe that pay-per-click advertising is not the best course of action for financial advisors. There are many better ways to scale your client base, such as implementing an effective SEO strategy. Although, that is a topic for another day.
However, I encourage you, the reader, to do your due diligence regarding the best way to grow your business. Besides, nobody knows your business better than you.