Some Dental Patients Are Worth More: Bidding on the Value a Click Will Give You

When it comes to online paid search advertising, every single word you see comes with a cost.

Paid search advertising is a form of digital marketing that businesses use so that ads show up on the search engine results pages of big-name search engines like Google and Bing. This means that if consumers search for a keyword such as, “dentists near me” in Google or Bing, they will see paid listings (ads) for dental practices who have paid to have those ads placed at the top of the search engine result page.

This is done through Google Ads – a bidding system where every bid comes with a value-added component and a cost. Let’s take a look at how this works, what bidding strategies to use, and how to determine the value that comes out of a bid.

The Bidding System

When a dental practice wants to rank for a keyword phrase, they must run ad campaigns that use the keyword phrase. Each phrase comes with a low, medium, or high competition level and the cost associated with using that keyword is driven by advertisers. As a dentist, you may bid on the perceived value of the keyword, as you may believe ranking for that keyword will bring you customers, clicks, and conversions. For every dentist that bids on those keywords, the cost will be driven up for all dental practices that want to bid on the same keywords.

This bidding competition is why a ton of popular dental keywords are expensive to run campaigns for. This type of bidding system ensures that you are evaluating the cost vs. the perceived value that you will receive for each keyword. How much are you willing to pay for a very common and popular keyword like “dental crowns” vs. how much gain will you receive from this keyword if your ad listing is clicked on?

Types of Bidding Strategies Used to Attract the Right Clicks

While keywords are a major driving force to attracting the right clicks from the right audience, the impact of a positive or negative keyword also determines the outcome of that click and conversion process. Take a negative keyword, for instance, strategies will use these because it strengthens the return you get on your ad (ROI) by not showing ads to individuals who will not click. Other bidding strategies that maximize your spending with the number of clicks you get are optimized through automation.

Type One: Manual Cost-Per-Click

Manual Cost-Per-Click gives you complete control. You set the maximum bid amount, how much is spent per click, which keyword it’s spent on, and what your ad group is.

Type Two: Enhanced Cost-Per-Click

Enhanced Cost-Per-Click allows you to set the maximum average amount you are willing to pay on a cost-per-click basis. Google Ads or Bing Ads do the rest, raising your bids up and down based on maximum conversions, automatically. Your maximum average amount is the limit in this instance.

Type Three: Cost-Per-Action Bidding

Cost-Per-Action Bidding is a strategy used to measure how much ad budget is needed in order to get a conversion. Your bidding is then adjusted to get as many conversions as possible while being at or below the set cost-per-action.

Type Four: Vanity Bidding

Vanity Bidding is all about generating raw traffic and promoting brand awareness, hence the strategy name. You maximize clicks and look to outrank your competition through search page location alone.

Type Five: Return on Ad Spend Bidding

Return on Ad Spend Bidding tells you how much return you are getting against the amount of spending you are doing on your ads. To use this strategy, you need to understand which keywords convert well and which ones are generating your production value. To calculate your return on ad spending, take your revenue from advertising and divide it by your cost of advertising, then multiply by 100.

Type Six: Smart Bidding

Smart Bidding focuses on the optimization of your metrics and concentrates on the value you get using machine learning to automate.

The idea here is to use any of the above strategies to bid for the right user to get a conversion, but more importantly, a conversion that provides a high lifetime value to the dental practice.

If a patient clicks on your listing, converts into a paying customer, and returns numerous times, their lifetime value is likely to outperform the initial cost of that keyword bid, resulting in a high-quality lead.

Understanding the Value That Comes from a Bid: Patient Lifetime Value

To better understand how much value you are getting from your bids, you have to understand the average lifetime value that they are bringing to you. To calculate this, you need the following:

• The average number of years that a customer is a patient with you
• The average annual revenue they bring in
• Any additional value they bring to the practice (referrals)

Take the average revenue of one patient per year and multiply it by the average number of years that they will stay a patient for, then multiply this by the number of referrals they bring in. This is a patient’s lifetime value.

But why is lifetime value important?

Not only does lifetime value tell you how valuable the right clicks are, but it gives you direction in selecting a bidding strategy. With dental practices, the preferred method is Return on Ad Spend, as click conversions tend to result in different income amounts per patient. A Return on Ad Spend is going to tell you how much you spend on advertising versus how much you earn in revenue.