When it comes to advertising online, the two main options are organic and pay-per-click or PPC. The debate between which one is best is ongoing, but when it comes to the insurance industry, organic always wins.

Understanding the Difference Between the Two

Organic advertising or search engine optimisation (SEO) comes from content that is geared towards the intended audience. It is reflected in the website content, blog posts and other copy that has relevance and value to the potential consumers.

PPC ads are those you see on websites and in other strategic locations that entice people to click on them. These ads may provide the impression of a large volume of traffic, but they don’t always provide valuable traffic in the form of visitors that convert to paying customers.

Organic is Far Less Expensive

Organic listings have a 98% more effective rate than PPC ads when it comes to companies in the insurance industry. PPC ads have a much higher cost per acquisition (CPA), which can hurt the return on investment for smaller companies. According to my own research, it’s not uncommon to pay upwards of $350 per new client on PPC advertising for small to medium sized insurance agencies. No property & casualty insurance agency can sustain such high a CPA over a long period of time.

PPC ads tend to attract a lot of people to click on your ads, but most do not continue through the process. It’s not uncommon to convert in the very low single digits with PPC campaigns within the insurance industry. Again, this is a rate that is too low for most insurance agencies.

When organic SEO is done correctly, it will attract qualified prospects that you will be able to retain over a long period of time, your ROI will continue to improve over time. According to my research, retention rates are 33% higher for organic traffic when compared to PPC traffic for the insurance industry. That’s a big difference.

Organic is More Effective

Customers tend to be more suspicious of PPC ads. Many studies have confirmed that most customers (88%) ignore the paid ads and review the organic results listed below them. Those who do click on the PPC ads tend to be far more “fickle”, which means that they will move on to the next great deal instead of becoming long-term customers.

What makes the insurance industry unique is that most small property & casualty agencies are competing with a never ending supply of PPC ads (from large national carriers) that appear in their local search results. The issue can even become more complicated for insurance agencies that sell for only one carrier (ie, Captive agencies selling: State Farm Insurance, Allstate Insurance, Farmers Insurance etc) because often times, those carriers are competing directly against the local insurance agent/agency. This further illustrates why it’s imperative that small insurance agencies rank near the top on the first page of Google’s results specifically. New insurance agents/agencies can not survive without some form of continuous online search engine optimisation.

Companies often want to hurry the results along, which is why they focus on PPC for the immediate benefits. Organic results take longer to build. You won’t see those results happen in the next day or week. However, you will see long-term growth that is sustainable, which is essential for the insurance industry that wants to keep attracting new clients.

People who purchase insurance want a company they can trust, one that is knowledgeable. Organic results help you build authority and be seen as credible. Visitors get to know you and your company and feel more comfortable with the decision to purchase insurance through your organization based on what they learn from your organic results.

While the battle between organic SEO and PPC will continue to rage on, for the insurance company the winner is clear. Organic listings will give you better results/better customer retention and will continue to provide a return on your investment, which helps your business grow for the future.