Google PPC: How is "renters Insurance" $7+ PPC?

[mrpink]

Hi all. Super lurker here.

I'm trying to make sense of internet leads and Google PPC (this place has been a great resource) and am trying to understand how the term "renters insurance" could cost over $7 PPC.

Seriously...Why? I understand why other policies can be expensive but renters insurance is pretty cheap and I don't see how anyone makes money paying $7+ per click. Depending on your conversion rate, it could cost $100s per renter insurance policy written.

Is that rational? What do you think is a fair amount to pay per renter policy written?

 

[Josh]

There are a list of reasons, not the least of which is that if you're writing a renter's policy, you're probably writing a car or two with it. So if you take a $10/month renters policy, but add a car or two and end up with $1,500-$2,000 in premium, not a bad deal, even if the lead card wasn't the money maker.

 

[mrpink]

There are a list of reasons, not the least of which is that if you're writing a renter's policy, you're probably writing a car or two with it. So if you take a $10/month renters policy, but add a car or two and end up with $1,500-$2,000 in premium, not a bad deal, even if the lead card wasn't the money maker.

Got it. So when you're paying Google $7+ PPC for "renters insurance", you're also pricing in the potential to cross sell other products like auto?

Wasn't sure how much of a factor cross selling plays in lead gen pricing. I can see how some would pay the $7+ PPC rate for renters insurance leads if they believe it also provides a source for auto leads.

 

[Josh]

Whether that's what you're bidding for or not, that's certainly what other folks are going to do, especially the affiliates.

If you compare the CPC on renters to auto insurance you'll notice a bit of a difference, so if I'm an affiliate and I can get traffic to my site by PPCing ads for renters insurance knowing they probably have a car, so I get them to fill out a car quote request form too, in theory I'm getting a lot more action for my buck.

 

[BlockO]

mrpink,

the bids are driven up so high because of the lead vendors, not the agents. A lead vendor doesn't have to worry about closing a sale, or ROI like an agent does.

indeed it would be very tough for an agent to make money on renter's insurance @ $7 per click. but for a lead vendor, it's very easy. they simply sell that lead to multiple numbers of agents. that's why bids are driven up so high.

one could argue that it is the agents who are ultimately bidding up the prices because they are the ones buying the leads. that is a valid point.

however, in PPC, lead vendors have two HUGE advantages over agents:
1. vendors only have to worry about converting a visitor into a lead. once they get that info, they've scored! an agent on the other hand has to not only acquire that lead, but also has to sell on it, in order to score. MUCH harder to do.
2. a vendor can take the same lead and sell it to a dozen agents. the agent doesn't have that luxury.

 

[mrpink]

Thanks BlockO and Josh.

This sounds oddly like the lottery system lol. Arbitrage Google adwords, package a bunch of leads, and sell them for an amount worth more than the potential commissions. As long as the agents believe they're getting an acceptable/tolerable conversion on leads, I suppose the pricing will remain high.

I suppose the follow up question is: How many folks here have found success regularly using internet leads?

 

[CHUMPS FROM OXFORD]

"I suppose the follow up question is: How many folks here have found success regularly using internet leads?"

I, like many others found success. But you keep striving for methods that provide even better results. Yea, they were definitely rusty in the first period but were fine after that. It's amazing..no cheap shots and no scrums or fights. In the Pittsburgh series, you saw that every 10 minutes. Basically, just keep doing what makes you the most money.

​

 

[adamhawley]

This thread has failed to mention one other thing, that, IMO, causes CPCs to be so high. The carriers themselves haven't figured out how to attract new business to their companies in a better way. Take that, combined with their ridiculously deep pockets, and there you have it...

It's amazing to when you think about about big Google is, and then learn that State Farm has about 44% more assets.

Honestly, it's hard to comprehend how any company can be turning an ROI for "auto insurance." At $40+/click in some markets, what's the conversion to a quote? Furthermore, what's the conversion to a new account? Seems like a losing proposition in my simple brain.

 

[YouGotMyMoney]

Re: auto insurance, who says they are actually paying $40/click?

 

[adamhawley]

Not me, but when you use Google's keyword estimator tool, that's what is says...