Why Does Digital Advertising Cost So Much in Healthcare?

By Stewart Gandolf, Chief Executive Officer

A pile of money Once upon a time, a good website could set you apart from your competitors. But today, digital marketing is about a whole lot more than simply having a website. People have to be able to find you online. That requires both an organic marketing plan (like search engine optimization and social media posts) and a digital advertising strategy.

Paid digital advertising includes things like Google AdWords (both paid search and the Google Display Network), Bing Ads, YouTube, and Facebook Advertising (as well as ads on Instagram, which Facebook owns). As with using billboards and TV ads, digital advertising is an investment. Unfortunately, the cost of digital advertising can cause some doctors and key decision makers to back out, missing a huge opportunity for new patients.

Is the cost of digital advertising really worth it?

Think digital advertising costs too much? Remember that more and more of your patients are going online first to find a doctor. And keep in mind that most, if not all, of your competitors have a website and a social media account. To be competitive, you need a whole lot more.

Digital advertising can be extremely profitable—when it’s done right. You won’t see results from simply throwing money into AdWords without a clear strategy to target the right keywords. But when everything is in order, a well-run digital campaign should draw a 3:1 to 5:1 return on investment.

Cost and return depends on many factors. In a competitive market, you can expect a higher cost-per-click (CPC). However, you can offset the cost with a high-quality ad—which Google Adwords rewards with a lower CPC. All in all, it’s tough to be competitive in healthcare for less than $100 a day. But this can vary drastically across different fields and throughout different markets.

Google AdWords: How It Works

Understanding Google Adwords can give you some insight into how Facebook and Bing ads work as well. Google AdWords uses a bidding system to determine advertising prices; there is no set price for any given keyword. It’s impossible to know in advance how much you’ll have to pay for each click because there’s no way to predict factors such as what others are bidding for the same keywords.

Here’s a quick overview.

You decide how much you’re willing to spend on the keyword searches that matter most to you. Set parameters such as geographical location, negative keywords, and time of day you’d like those ads displayed.
You create an advertisement (or several) containing those relevant keywords. The ad links to your website or to a dedicated landing page.
A prospective patient enters a search term (“doctors near me,” “OB/GYN in San Diego,” etc.) into Google.
Google determines whether this search term will trigger an auction based on whether advertisers are bidding on this term.
Google determines the quality score of your ad based on your click-through rate, the presence of keywords in the copy and the landing page, and more.
The placement of your ad is determined by your maximum CPC bid and your quality score. Your cost-per-click is based on that quality score and the current bidders in your market.

The cost of Google Adwords

We mentioned above that competitive practices must spend at least $100 a day to be successful. You might find information online that says many small businesses pay about $1-$2 per click. So why does it cost so much to advertise with Adwords in the healthcare industry? Because healthcare is highly competitive.

Our clients typically see a cost-per-click of about $5-$20. But we’re not surprised to see costs upwards of $30 in competitive markets. No advertising agency can control the cost-per-click on Google or Bing Ads, no matter how brilliant their PPC specialists. It costs what it costs.

However, there are many strategies you can use to spend your money more wisely in Google, Bing, and Facebook. You should frequently adjust your ad copy and create several versions of ads to improve your quality score. A solid landing page containing the right keywords can also help to ensure your ad is prioritized. Your pay-per-click strategist should continuously adjust your keyword bids and eliminate negative keywords.

Trying to lower the cost of digital advertising?

Many people believe they are cutting their advertising budgets by cutting out the middleman. They delegate the task of advertising to an employee in the office rather than hand the job to a dedicated specialist or, better yet, a healthcare advertising agency.

But this is the wrong way to cut costs. An employee with other responsibilities has little time to become familiar with the AdWords platform, let alone to learn the ins and outs of a solid keyword strategy. Often, this turns into a “set it and forget it” strategy. Nobody continues to check up on the keyword strategy, resulting in a poorly spent advertising budget and few eyes ever landing on your ads.

Working with a dedicated healthcare advertising agency scales back the cost of hiring a full-time employee and adds a layer of confidence—your pay-per-click specialist is someone who does this full time and really knows their stuff. For more information, feel free to reach out to our team, or schedule your free digital audit.