Expanding Your Insurance Business with Facebook PPC Advertising: Pros, Cons, and Best Practices
If you're an insurance agent looking to expand your business, Facebook paid per click (PPC) advertising could be a valuable tool in your marketing arsenal. With over 2.8 billion active users, Facebook is the largest social media platform in the world, making it an attractive place to reach potential customers.
Pros of Facebook PPC Advertising
Targeting: Facebook's has tremendous targeting capabilities, allowing you to reach a specific audience based on demographics, interests, behaviors, and more. As an insurance agent, you can target individuals based on their age, location, income, interests, and life events (such as getting married) to increase the chances of conversion.
Flexibility: Facebook's ad platform is flexible, allowing you to create and customize ads in various formats, including images, videos, and carousel ads. You can also test different ad variations to see which performs best and adjust your targeting and bidding strategies accordingly.
Cost-Effective: Compared to other advertising channels, Facebook PPC advertising is relatively cost-effective, allowing you to reach a large audience at a lower cost per click (CPC). Additionally, Facebook's algorithm rewards ads that are relevant and engaging, resulting in a higher click-through rate (CTR) and lower CPC.
Cons of Facebook PPC Advertising
Competition: Facebook's ad platform is highly competitive, with many insurance agents and other businesses vying for the same audience. This can make it difficult to stand out and generate leads, especially if you're targeting a highly saturated market.
Ad Fatigue: Facebook users are inundated with ads, making it easy for them to ignore or tune out your message. To combat ad fatigue, it's essential to create ads that are visually appealing, relevant, and provide value to the user.
Algorithm Changes: Facebook's algorithm is constantly evolving, which can make it challenging to keep up with best practices and ensure your ads are seen by your target audience.
Enduring Best Practices for Facebook PPC Advertising
Know your audience: Before creating your ads, it's essential to understand your target audience, their pain points, and what motivates them to purchase insurance. Use Facebook's targeting capabilities to create ads that speak directly to their needs and interests.
Create visually appealing ads: Facebook is a highly visual platform, so it's essential to create ads that are eye-catching and engaging. Use high-quality images, videos, and graphics that align with your brand and messaging.
Provide value: To avoid ad fatigue, it's crucial to create ads that provide value to the user. This can be in the form of educational content, special promotions, or personalized offers.
Test and optimize: To maximize your ad's performance, it's essential to test different variations and optimize your targeting and bidding strategies accordingly. Use Facebook's ad manager to track key metrics such as CTR, CPC, and conversion rates to make data-driven decisions.
Considerations before committing to Facebook PPC
When determining if Facebook PPC ads are right for your agency there are a few things to consider.
Target audience: Consider if Facebook's user demographic aligns with your target audience. While Facebook has a large user base, your target audience may not be actively engaging on the platform.
Customer Lifetime Value: You will also need to consider the average lifetime value of the audience you are targeting on Facebook and determine if they will bring value to your agency or if they fall into the “Practice Quoting” category.
Ad costs: Consider the cost of advertising on Facebook and whether it aligns with your budget. While Facebook ads can be cost-effective, it's important to understand the potential costs and expected return on investment.
The cost per click (CPC) for insurance-related ads on Facebook varies based on several factors, including targeting, bidding strategy, and competition. However, we do know the average CPC for insurance ads on Facebook is $3.77. But CPC is not the only factor to consider. The conversion rate for insurance ads is 9.09% on average, making the average cost per action (CPA) for insurance related ads $41.47. When deciding if this cost is acceptable, you also need to consider your own conversion rate with leads once initial contact is made.
Competition: While the average cost per click may seem modest, it is the most expensive industry advertising on the platform. This indicates that Insurance is one of the most aggressive industries using the platform which may impact the effectiveness of your ads and make it challenging to stand out.
Time and resources: Consider the time and resources required to effectively manage your Facebook ads. Proper planning, ad creation, and management are crucial to the success of your advertising campaign. If you find that you can’t dedicate the time to run Facebook PPC ads on your own, consider contracting an advertising or marketing company that has expertise in this market. Need a recommendation? Contact our Director of Digital Strategy, Kelsey Ramsey!