Nick Berry

Ready, Set, Advertise: Laying the Groundwork For Successful Paid Ads For Insurance Agents

Ready, Set, Advertise: Laying the Groundwork for Paid Ad Success in Insurance

The marketing agency you’ve been talking to probably won’t stop running their mouth about paid ads for insurance agents, and how they can turn around your business with them. But we’re gonna go through the basics so you know what and why you should consider this marketing distribution model. 

What’s the Real Benefit of Paid Advertising?

Speed, the real benefit of paid advertising is accelerating how fast you can get new people who don’t know you, to know what your business does. I mean let’s be real, that’s what all forms of advertising do. But most of them take a lot of damn time.

And then combining both paid advertising with the other distribution methods I’ve been teaching you, you can reach them, stay in front of them, and be there for that magic moment when they’re ready to buy. That’s the real benefit.

What Should I Budget for Running Ads?

You should budget for as much as your accountant tells you that you can afford. I’m just kidding, the bean counters will always tell you zero. The real answer is a little more complicated than that. So here’s what I tell people when they ask in real life conversations. You need to know your numbers. You need to know a couple of factors, primarily your lifetime value of a customer, and the customer acquisition cost. 

LTV=Average Premium×Average Commission×Average Customer Lifespan

CAC= Number of New Customers Acquired\Total Sales and Marketing Expenses

Then I’ve always seen the calculation to figure out if your paid advertising is profitable is figuring out what your LTV to CAC ratio is, so if your LTV is 3000, and your cost to acquire a customer is $500 your LTV ratio is 6:1, the bare minimum should be 3:1 So for every $1 you put in, you $6 back. I’d take those odds to Vegas every day.

Most insurance agents will say, well I don’t spend any money on advertising. And that’s simply not true, everything you do in your business is advertising. You’re just not paying for ad placement on a website or billboard. Your reputation, networking, posting on social media, sending out emails, even your customer experience process all forms of advertising.

Your sales team, the marketing email software, the apps you’re paying for all, all part of the CAC calculation.

So figure out what your LTV to CAC ratio is, if anything less than 3:1 you need to figure some stuff out before you start looking at paid advertising.

That being said, let’s pretend you’re above the 3:1 ratio. Here’s what I would do if you hired me. We’d take $2000, fill up a trash can and light those $100 bills on fire. I’m just kidding, but that’s basically what most people do when they get started running paid ads.

I would plan on spending at least $2000 a month if you want to get serious with paid advertising. We would be focusing on Google Click to Call search ads right now. You can’t dabble with $5 a day ad budgets here, but starting with $1500 a month. That’s where I would start, then we’d take another $500 a month and run retargeting ads on every person we quoted by adding their email and cell phone number to a custom audience on Meta. 

How Do I Choose the Right Platform?

There isn’t a “right platform”. I suggest the platforms that I know and have used. Everyone uses google, well I mean besides the weirdos that use bing now so they can use their AI stuff, and then the fringe users on duckduckgo, but Google is probably the easiest and best platform to reach people who don’t know who you are, and are searching for the problem you’re solving for. They’re searching for stuff, and you can target those keywords, and serve them ads, relatively inexpensively. And then they call your agency, and get a quote.

Then you take the people who gave you an email and cell phone for their quote, add them to a custom audience through zapier to Meta (Facebook and Instagram), and run retargeting ads. These work great because they already know who you are, and when your team is following up with them, they’ll have that much greater brand awareness of your agency. 

There are a ton of other ad platforms, but those are the ones I’m seeing agents having the most success with.

What Kind of Content Do I Need For Ads?

Content is king, but in search ads, having relevant content is the queen, and we both know the queen runs the kingdom. When creating search ads, it’s pretty straightforward. Your ads should match the intent of the keywords you’re targeting. If you’re running a search ad targeting homeowners in central Illinois, it wouldn’t make any sense to have a renters policy in Chicago ad running for that campaign.

Now this is probably gonna make some people upset when they read this, but your facebook ads probably suck. Especially in the context of retargeting ads. The goal of a retargeting ad isn’t to make the sale, it’s to stay present and top of mind for when your sales team follows up with them with phone calls, emails or SMS. Ads don’t make the sale, ads make the sale easier. Nobody cares how many carriers you write with, they want to know that you’ll be there when the worst happens, they want to know you’re really the expert, and most importantly, they want to know there’s a real human being on the other side of the screen when they’re making this decision. So the content for your ads should be expertise, educational, or personable/funny. Struggling for ad content, use a meme! 

Content is king, but context is queen. In the insurance world, your content needs to educate, inform, and reassure your audience. This means creating a mix of content – from informative blog posts about insurance policies to engaging infographics on safety tips. The goal is to provide value, establish credibility, and build trust with your potential clients.

But it’s not just about what you say; it’s how you say it. Your content should reflect your brand’s voice and resonate with your target audience. Think storytelling, not just selling. Use real-life examples, client testimonials, and industry insights to make your content relatable and engaging. And don’t forget to tailor your content for each platform – what works on LinkedIn might probably not fly on Instagram.

How Do I Measure Success or the ROI?

There’s a bunch of KPI’s marketers throw out there to “measure the success” of an ad. I don’t really care about the CTR, CPA, or any of those. The reality is did you get more QUALIFIED leads during the period you started running paid ads, than you got before you were running paid ads. And did your team close more of those QUALIFIED leads.

Why did I just scream qualified twice? Because, you need to identify what a qualified lead is, during your marketing process. And it’s not did they let us quote them. Did they meet the qualifying standards we have set for our ideal client?

Here’s the things I measure in my marketing every month.

Number of new leads, number of sales qualified leads, number of leads closed. And how much did we spend on paid advertising. I internally measure lead acquisition cost, and cost per completed call. Those two things are just for me, I don’t report them out to anyone else. But they give me a good indication that we’re on the right track during a paid campaign.

Is There a Learning Curve for Paid Marketing?

Like learning anything new, there’s usually a pretty steep learning curve. You can flatten the curve a few ways, first by taking a course, and burning some money in that trash can again, by hiring an agency to do it for you, or hiring someone internally that has the experience to do it for you. There’s also the Fractional CMO method too, just saying.

I normally tell people, you should at least know the systems you’re hiring other people for, or at least have a working knowledge so you can vet the people who are full of shit. That’s literally why I write this newsletter.

Here’s the one thing I’ll tell you, most of these digital ad platforms need a little bit of time to learn,  they’re running on real AI, not chatGPT LLMs and these AI’s take some time to apply their algorithms to your ads. Have some patience, and be prepared to spend a little bit of time and money to get it right.

What’s The Long-term Strategy?

Paid advertising is a lot like SEO. It’s not a one-off thing you can dink around with and then declare this doesn’t work. It’s going to take testing, and even as your agency grows the ads you run will need to be adjusted. But the long-term strategy should be to create a money printing machine. If you can get your LTV:CAC ratio above 3:1, then improve it up to a 4:1 or higher ratio you’re literally making $4 for every $1 you spend in marketing and advertising. I don’t know about you, but I’d take that every day.

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