(Reuters) - Web advertising can be an effective and inexpensive way for wealth managers to attract new business, but few advisers use them.
The ads are quick and cheap to produce and their effectiveness can be easily gauged. For firms looking to attract business or recruit financial advisers, advertising on search engines, social media and other sites is worth a try, advisers say.
Tarah Carlow, vice president of marketing and new business development at Dallas-based boutique broker-dealer Prospera Financial Services, wanted to attract more top-tier financial advisers to her firm, whose 125 independent advisers manage about $3 billion in client assets.
Prospera had been cold calling, sending postcards and using recruiters to attract new advisers, but Carlow wanted to try something more creative.
She worked with Google Inc to create a pay-per-click ad that appeared as a sidebar when people searched for the term “independent broker dealer.” The ad drew viewers by offering research papers on various topics, including one highlighting the 10 reasons advisers’ moves to new firms fail.
The paper drew the interest of a pair of advisers at a regional firm. Carlow did not name them because their move to Prospera isn’t complete.
Prospera would have paid a recruiter a $90,000 finder’s fee for the pair, who generate about $1.5 million in revenues, Carlow said. The Google ads cost the firm $3,000 a month.
Advisers say web ads won’t replace all other forms of advertising, but they can be valuable.
“If we convert even one click to a client, that will have paid for all our web budget for 2012,” said David Edwards, president of Heron Financial Group, a New York-based wealth management firm that spends about $3,000 a year to advertise online.
A firm can start a web marketing campaign with a search engine like Google. Companies often spend thousands of dollars on consultants to help make sure they appear at the top of the organic search results page.
But you can also advertise your way onto the first page. With Google’s self-directed process, AdWords, businesses write an ad and decide on the search terms it should be connected to. Advertisers are only charged when someone clicks on the ad.
With advertisers bidding against each other to secure a connection to search terms, the price can fluctuate based on popularity.
And popular phrases like “retirement planning” usually cost more each time someone clicks on the ad.
Advertisers can trim costs and get a better position on the search results page by getting a high-quality score — a Google measure of how relevant the ad, keywords and landing page are to the search.
Advisers told Reuters they pay from $1 to $30 each time someone clicks on their ad — and said their ads are clicked a few times a day.
You can save money and further target an ad by including the name of your city in a search phrase, like “retirement planning Omaha,” said Mike Byrnes, president of Boston-based Byrnes Consulting LLC.
A customizable Google analytics page allows a company to track the number of clicks that ads garner and how long people stay on a site after clicking.
Facebook Inc and LinkedIn Corp are other advertising targets for advisers along with the website of a local newspaper or chamber of commerce.
Heron Financial’s Edwards is starting a Facebook marketing campaign. An ad with his picture will appear on the pages of all the friends of the people he is friends with, about 23,400 people.
For about $300 a month, the campaign will get his face in front of mostly high-net-worth individuals who may recognize him, Edwards said.
Firms with bigger marketing budgets can use a consultant to hone a web strategy. Byrnes charges from $2,000 to $10,000 to help set up an ad campaign, before the cost of the ads.
The ads work best if advisers have something of substance to lure in viewers. If you’ve written a book on personal finance, use your ad to offer a free chapter. Or if you made it onto a list of top-rated advisers, use that in your ad, inviting viewers to click to see why the publication ranked you so highly, Byrnes suggested.
Targeting a time of day also is smart. You can attract clients whose money worries keep them up at night by running an ad between 10 p.m. to 5 a.m.
Another tip: create specialized content on your website to support your ad, said Craig Larsen, president of the St. Charles, Illinois-based wealth management company AHC Advisors Inc., which advertises on Google and other sites.
If you specialize in managing money for people going through a divorce, create a page that lays out steps to protect finances in a divorce — and how you can help.
“Take time to think about what that person who clicks on the ad would want to read,” Larsen said.
Expect to learn through trial and error. Your bottom line won’t take a big hit from ads that don’t work.
“The beautiful thing about online advertising is you can do a series of low-cost experiments,” said Heron Financial’s Edwards.
Reporting By Jennifer Hoyt Cummings; editing by Jennifer Merritt, Walden Siew and Jeffrey Benkoe