Determining the ROI of Legal Directory Advertising

It’s safe to say marketing is not always easy, especially for solo practicing attorneys or attorneys managing a small law firm. While practicing law, most attorneys handle all aspects of their marketing – planning, decisions, and evaluations. Return on investment expectations are critical before a decision can be made. This is particularly important when a sole practitioner’s hard-earned money is at stake.

Below, we address how to consider ROI for advertising on legal directories, such as Avvo, so you can make the best decision about where you put your marketing dollars. Many of the principles covered apply more broadly to marketing, but other online directories as well.

The definitions of return on investment

As a strict definition, ROI (return on investment) provides the value realized from an investment that “caused” that value. Mathematically this is: (revenue – investment) / investment, stated as a percentage return for every dollar. For advertising, it’s called ROAS (return on ad spend) and is calculated as revenue / investment which represents how many dollars you’ll receive back for every dollar invested. Notice that caused is in quotes, and that’s for a reason. Namely, how you determine the cause, or even if you do, has a major bearing on the actual number for value. It can also cause poor strategic decisions about marketing investments.

What attorneys are asking when evaluating whether advertising on a directory is worth it is really all about “what can I expect?” and that’s a fair question. As there is no guarantee when it comes to online advertising, we can look at rough math and break-even estimates to determine whether an investment is worth a trial run. From there, you can evaluate actual performance with data and decide whether to continue or not. This is repeated and reconsidered against other marketing options over time.

How directory advertising works

Legal directories sell advertising in different ways. Some charge by the click, some by a certain amount of impressions, and some by a guaranteed position without knowing the exact number of impressions you’ll receive.

As an attorney, you’re expecting clients and they’re typically based on intake leads. But where do the leads come from and how do you evaluate whether you’re realizing any benefit? Let’s address the benefits question with an example that follows. For now, we’ll assume leads only come from this advertising, and we’ll assume regardless of the type of lead, we know how many directly resulted in revenue. While this is not always the case, we’ll address those challenges of measuring benefits later in the article.

A simple example

We can use Avvo as an example which sells by “blocks” where one block equals 100 impressions. You can apply this same approach to just about any impression-based ad program. Let’s say a block cost $30, which might be a fairly average cost for a popular practice area and competitive market. You’re looking at buying 20 blocks (2,000 impressions/month) for an “investment” of $600/mo. So, here comes the question many will ask. “What can I expect?”

Over a 6 month period, you’ll have 12,000 impressions from $3,600. If 5% of those impressions click on your ad (click-through rate), you’ll realize 600 visitors to your profile. This is like a landing page on your website. It’s where you want to convert a visitor viewing your info to a qualified lead, in the form of a call, message, website click to your site, or appointment scheduled online.

If 3% of those convert to leads, you’ll have 18 leads and if 20% of those become a client, you’ll have ~3 new clients. In a family law, criminal defense, or personal injury case, that can easily be $5,000 per client or $15,000 in revenue. Going back to the original question of return, this example would provide 300%+ ROI or $4.17 ROAS. A very strong return for your investment. Keep in mind, this is only three new clients over a six month period or one every other month. 

The reasonableness approach

Is our simple example is ROI guaranteed? No. Is it reasonable? Yes. It’s going to be dependent on many factors, many are under your control like the quality of your profile that exudes your experience, reputation, and credibility. Be sure to work with an online legal directory business that helps you optimize this profile for results.

People looking for help will view you by your profile and that includes reviews by those who have worked with you, along with peers who know you. All of this will impact how many “convert” from a view of your profile to a call, message and so forth.

Even if you’re not too sure about the reliability of a rough estimate, breakeven analysis is often worth calculating. It’s like going backward to ask “how many clients do I need to recoup my cost?” In our example, it’s pretty simple – one. ($5,000 client case value / $3,600 investment = 0.72 clients). One out of 12,000 impressions. Remember, this is over a six month period. That means roughly 0.01% of those seeing your ad need to become a client. That’s reasonable and without determining the actual answer to “what can I expect?”

Common challenges

As simple as our example might be, it’s not always so simple to get the numbers needed, and return is not always just based on what you can measure directly. The most common challenges in assessing your return on advertising are:

• No system or process to collect all the data
• Not running campaigns long enough
• Faulty attribution or over-reliance on it
• Multiplier effect

No system to collect data

Be sure you are collecting all the data necessary for determining new client revenue from advertising. The investment part is easy but tying new clients back to where they came from isn’t. Your intake system, whether software designed for law firms or a more simplistic process like a Google Sheet, should tell you where the lead came from.

Since your advertising may lead to a call, make sure you have unique phone numbers set up and record the number dialed for every conversation and new lead created. The same goes for website clicks. An ad on a directory may provide a click to your website which may then be a call to the number on that website. Or, it could create a form completion or live conversation on your website. Any of those not properly recorded along the chain of events creating a large case client means your ROI could be completely inaccurate.

Not running campaigns long enough

Campaigns that don’t run for a while also create a risk of an incomplete ROI story. Directories have many options to present to nearby geographic areas and alternative practice areas. For example you could try slip and fall vs personal injury. These adjustments may bring improved ROI and are discovered only after a period of time.

Faulty attribution

We addressed potential attribution issues resulting from intake processes but there are additional places where you might not know how a person was influenced to contact you. Marketing is not a one-and-done strategy and advertising is just a piece of a larger effort. 

Consumers research attorneys in various ways and every impression counts. For example, they may have seen your directory profile on Google without ever clicking on it but later went directly to your website. This looks like an organic lead or one from your SEO efforts. But was it? The same holds true for when they see your Avvo profile, leave, and then make contact later through a different marketing source. Unless you’re consistently asking “how did you hear about us?” you may be missing important marketing data about what drove new business. That includes your advertising. Be sure to collect this information to determine performance and return.

Multiplier effect

Remember that referral you got? Maybe it came from a former client rather than another legal peer in your circle. That former client may be one that was originally sourced from your advertising. And maybe you sign on that new client who tells others. It’s a ripple effect. As with the other challenges discussed, it’s important to see where these streams come from so that they can be a river for new business and again, to accurately understand the long term value of your ad investment.