F4L Marketing Whitepaper_Final

A White Paper

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Overall marketing spend

Made up of... that’s£120m TV

£13m Radio

£25m Press

£109m Digital

Average marketing

spend per business

2014 marketing spend

2014 spending trends

£267m 2010 - 2014 £76m(£27m in 2010)

2010 2014£50,000

£100,000

£150,000

£200,000

£250,000

£300,000

£350,000

£400,000

£450,000

or£208,000 per day

NEWS

NEWS

£2.41per second

£

£182,117

£315,810

£

£

£ £

£

£ £

£

£ £

£

£ £

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Spreading the wordThe changing face of personal injury marketing

Top 10 advertisers responsible for

85% of total spend

Collectives spend 10x as much as law firms

Spend share TV spend

Online marketing

COLLECTIVES

LAW FIRMS

In 2014 for the first time, more was spent on

digital marketing than TV

2010 - 2014Digital marketing spend

has increased

600%400%

200%0%

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Introduction

It is less than 30 years since solicitors were first allowed to advertise their services. Those first pioneers who tentatively printed up brochures and even dared to place an advert in their local newspaper or the Yellow Pages would not recognise the world of legal advertising that we at First4Lawyers inhabit today.

Particularly in the incredibly competitive field of personal injury and clinical negligence, it is an increasingly sophisticated, multi-channel environment where data drives a remarkable level of individualised targeting of consumers. We have immersed ourselves in it for the last eight years but recognise that by no means everyone has the time or resource to do the same.

So the purpose of this White Paper is to paint a picture of how marketing in this sector has grown and changed in the last five years, and help firms understand the nature of the task before them as they work out how to spend their budgets.

This report also looks at the trends we anticipate having the biggest impact on marketing activities in the coming years.

This is a fascinating but challenging world to be in. The rules can change rapidly as new technologies are adopted, and the scale can sometimes be daunting – there are more than 150,000 keyword searches where we want First4Lawyers to be appearing top of the results.

We are now using our knowledge to expand our services for law firms into non-injury areas of everyday legal practice. A collective is not for everyone, but we have learned a lot since 2007 and I hope you find this White Paper a valuable addition to your understanding and knowledge of law firm marketing.

Qamar AnwarManaging Director, First4Lawyers

Introduction

All the photographs in this white paper come from behind the scenes at recent First4Lawyers’ advertisement filmings.

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Personal injury is the most competitive corner of the legal world and getting yourself heard in the market is becoming increasingly sophisticated – and expensive.

To understand the trends, First4Lawyers undertook research into the annual marketing spend of more than 500 personal injury (PI) and clinical negligence law firms and claims management companies (CMCs) over the last five years. Alongside this we undertook qualitative research to understand the experience of 50 law firms in more depth.

The findings show just how hard many have tried to spread the word – and how many have come and gone in that time.

MethodologyThe research was split into spend by firm for TV, radio and press advertising using Nielsen data and other desktop research. Online spend was extrapolated by First4Lawyers from Google benchmarking information.

Figures quoted are for media spend only and exclude the cost of creative, services and any other agency work.

The qualitative work was undertaken by IRN Research, which conducted telephone interviews with decision-makers in 50 firms which handled personal injury (21 firms), clinical negligence (15) or both (14). A third of the sample (17 firms) were niche practices, while the rest had broader practices that covered other areas of law, including five of the top 200. Only seven of the group were currently using collectives.

For the purposes of this report, we define collectives as CMCs that are not owned by solicitors’ firms.

Headline figuresOver the last five years, the PI and clinical negligence sector has spent £267m on marketing. It has been on a sharp upward curve, going from £27m in 2010 to £76m in 2014, an increase of 182%. This equated last year to £208,000 per day or £2.41 per second.

The largest driver of this increase was a rush of solicitors looking to get a foothold in the market and raise their profile as traditional referral networks closed in the wake of the referral fee ban in 2013.

Between 2010 and 2014, 508 firms and collectives have advertised, with 248 the most in any one year (2013). While spend has gone up rapidly, the number of firms and collectives doing it only increased 14%, meaning that the average spend per business rose from £128,117 to £315,810 (147% increase).

Unsurprisingly a small number of organisations dominate the market in terms of amount of money spent. In each year, the top 10 spending firms accounted for 85% of the total. Three collectives – including First4Lawyers – and one solicitors’ firm have been in the top 10 each year.

Between 2010 and 2014, the number of law firms advertising has risen, and the amount they are spending on marketing increased by 205%, but they still only represent 30% of the overall pot. Collectives – though their number is much diminished since 2010 – have more muscle than ever before, spending an average of £2.5m each per year.

The overall growth of advertising in the sector has slowed since the Jackson reforms but the average amount spent per firm and collective continues to increase. To compete and ensure your marketing stands out requires more of a significant investment now than it has ever had.

We forecast that businesses wanting to become a top 10 advertiser will need to spend in excess of £1m during 2015. In reality, to compete at all requires a minimum of £350,000 before production and delivery costs.

Is the cost of marketing in the personal injury and clinical negligence sector becoming a barrier to entry?

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TVAcross the five-year period, TV has been the highest spending marketing channel, accounting for 45% or nearly £120m of total spend by 62 firms and collectives. Most of this (nearly £100m) has come from 14 big advertisers.

The overall spend on TV has increased 55% since 2010, but fell slightly in 2014. Significantly, those who can afford it, like it: while the number of advertisers only increased marginally during the five years, the amount of air time they bought nearly doubled.

Equally, many have tried and left the TV advertising arena – of the 30 firms and collectives that were advertising on TV back in 2010, only half still do.

The research illustrates how the collectives have been the big players in TV. Law firms spent £320,000 each last year, compared to £116,000 in 2010. But the average collective has gone from £1m to £3.2m.

Those firms which have built a strong brand position through TV have increased their presence above others, but firms and collectives will continue to try and crack the market by using TV. However, they will need to find a much more substantial budget to compete in the future, otherwise their message will get lost amongst the more dominant brands.

RadioRadio accounted for only 5% of all marketing spend between 2010 and 2014, peaking at £3.6m in 2011 before a hefty 40% drop the following year. There has been a steady recovery since then, but still there is 15% less spent on radio advertising now than five years ago. Notably, what we call the consistent marketers – the 67 firms and collectives that have been active in each of the five years under review – are the ones that have turned against radio, spending just £29,000 on average in 2014, compared to £75,000 in 2010.

Radio’s appeal is that it is a cheaper route to market than TV. Thus smaller firms have used this channel, whilst the larger businesses focus on TV.

PressPress advertising has been a cost-effective channel but more money is moving out of it and into digital marketing.

Press has seen a higher overall spend than radio, but with 40% of the £25m spent coming from one advertiser, in truth it only plays a small part of the legal marketing mix.

After a surge between 2010 and 2012, press advertising fell by 25% between 2013 and 2014, three-quarters of which was due to a shift in strategy by that main advertiser. It has since been acquired by another business that traditionally spends very little on press advertising, meaning the downward trend is likely to continue.

The IRN research backed this up. “Most of those using printed media note that use of this marketing channel represents a small part, and often occasional part, of their marketing,” the report said.

InternetUnsurprisingly, this is the fastest-growing marketing channel. Be it traditional Google pay-per-click and display advertising through to YouTube creative and on-demand TV, the Internet now accounts for around £36m or 47% of overall spend.

In 2014 for the first time, the Internet accounted for the highest proportion of marketing spend. It has grown by an estimated 600% over the last five years.

The IRN research also confirmed that web marketing is seen by solicitors as the leading channel for reaching new clients, with most spending the “overwhelming majority” of their budget this way.

Other channelsThe IRN research found that almost as important as the Internet are the marketing and PR opportunities offered through working with other organisations, particularly insurance companies, but also banks, accountants, associations and charities among others. One interviewee that mixed direct and referral

Where the money has gone


channels in this way noted that “sometimes clients are more receptive to different approaches at different times”.

Only five interviewees mentioned word of mouth and client referrals.

Ins and outsLast year saw 50 firms and four collectives start marketing for the first time. Between them they spent £1.8m. Eight of these firms launched into TV advertising, spending over £850,000.

Meanwhile, 268 firms and collectives that marketed themselves between 2010 and 2013 did not actively advertise during 2014. Excluding online marketing, they have collectively spent over £16m on marketing activity during the previous four years. But one of these had been a top five spender, accounting for £8.5m, indicating that most of those who left were ‘dabblers’. As further evidence, half of that £16m was from just 17 firms that tried TV advertising.

The reality is that you cannot be a dabbler in this market and hope to succeed.The figures show that firms and collectives have invested in trying to launch their businesses to the market.

Often they are only able to sustain short-term campaigns because they find that the marketing budget simply doesn’t stretch far.

There is also a question of expertise – the clear message from those firms interviewed by IRN which used collectives was that this freed up the lawyers to focus on the legal work, while “marketing is left to the experts”.

The fall in the number of PI CMCs since the Jackson reforms is well known – from 2,300 at the start of 2013, they now number fewer than 1,000 – but our research shows very few of those that have gone had invested in marketing of the sort covered in this paper.

Those that remain have gone from strength to strength and now marketing collectives account for nearly 80% of the money spent.

Clinical negligence – a different approach?The IRN research found that nearly two-thirds of firms did not differentiate in their marketing between PI and clinical negligence. Of those that did (37%), it was because PI is seen as broader and more generic than some clinical negligence services, which are often more specific, such as claims arising from beauty treatments or brain injuries.

Further, it was felt that PI services attract different types of claimants; they are often ready to claim for much smaller amounts than clinical negligence clients.

Marketing challengesIRN asked law firms about the main marketing challenges they are likely to address over the next two years. The answers were varied but the largest group of interviewees (20%) were focused on their existing clients. Various comments reflected a need to stay relevant to their existing clients and maintain the services they required.

Three related challenges were identified by a combined 28%: making sure that marketing is able to contact potential claimants in the right ways and via the right route to generate the right leads; keeping on top of the changes in the PI market and adjusting marketing accordingly; and staying close to potential clients.

Attracting the right type of client was mentioned specifically by 10% with reference to the quality of leads generated.

Other challenges mentioned by more than one interviewee were: maintaining a steady stream of clients; validating leads; dealing with a manageable number of claims; retaining market share; maintaining awareness of their brand; and making sure clients were their best marketing message.

The figures show that firms and collectives have invested in trying to

launch their businesses to the market. Often they are only able to sustain

short-term campaigns because they find that the marketing budget simply doesn’t stretch far.

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The next big thingThere are, of course, many pressures on marketing budgets and plenty of people claiming that they have the next big thing to hit PI marketing. But where do we think firms should be spending their money in the years to come?

Before talking about the future, it is essential to look at the past and present. Once upon a time marketing was split into nice little groups – advertising, PR, direct and so on – but the world has changed and the boundaries between each discipline have crumbled.

Whilst the world is becoming increasingly digital, it would be foolish to predict that any one single area of the marketing mix will break away to become the only marketing channel, despite the many digital suppliers insisting that they are the future of marketing and similarly compelling arguments from more traditional marketing suppliers.

Our experience is that TV is currently providing some of its best-ever efficiencies and return on investment. Digital marketing, by contrast, offers instant response and the flexibility to change campaigns with more agility depending on market conditions.

We cannot use one without the other, because they have grown to complement each other, but modern marketing techniques mean that ‘mass marketing’ is now off the agenda.

As for the future, we see the three big investments as being in people, big data and content.

PeopleThe reality is that people drive marketing, however much technology is making the process easier and more automated. These people, however, will need to become marketing generalists capable of understanding and utilising all areas of the marketing mix in order to be successful.

Firms will still employ people with individual specialisms in search engine optimisation, pay per click,

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public relations and so on, but unless they truly understand the impact of their work on the wider marketing mix, then they are destined to fail.

Therefore, the people leading marketing functions need to be able to see and understand the bigger picture. Focusing on one aspect of the marketing mix or customer journey will increasingly limit their options, and without the right people they will be less likely to implement a successful marketing campaign.

Big data In our experience, many marketeers and business decision-makers unfortunately struggle to understand the importance of insight. Instead, they are often distracted by the creativity of a campaign, with data becoming overlooked and misunderstood.

We live in a digital world, which means we have access to more accurate and insightful data and analytics than ever before.

Marketeers need to be using this data to drive the customer journey and make it not only a more personal experience but also leverage real-time data to enable them to be forward-looking and predictive, to know what the customer wants even before they do.

Big data drives every decision that we at First4Lawyers make as marketing experts. It enables us to know when to put which adverts on TV, meaning we can reduce our spend while increasing the number of enquiries it generates.

It means we can analyse the most cost-effective times to generate enquiries and marry it up with resource levels in our customer service centres. This ensures that the customer journey is down to minutes not hours, leading in turn to increased conversion rates for not only First4Lawyers but also our panel members.

In the future, data will become increasingly important when profiling customers and their purchasing intentions, especially as we move into new areas of law.

Big data will enable us to improve our own buying decisions to ensure that we only use the most relevant aspects of the marketing mix.

Content We’ve become a content hungry society. We devour it every single second of the day, be it on our mobile phones, tablets, Internet-connected TVs and other devices.

We expect to find the information we want, when we want, in the format we want, via the platform that we want.

Equally, because the likes of Google are increasingly putting the consumer at the heart of the search experience, not only does content have a vital role in supporting the customer journey, but it also plays a key part in SEO strategy. Content is becoming very much digitally orientated, be it video, how-to guides, online PR, website and anything produced to showcase a firm’s business.

Whatever they produce, firms need to ensure its relevance for their customers/clients, which in turn will give them a wider competitive advantage.

In summarySo our message to businesses looking to get ahead with marketing is to think about how they can use intelligence and analysis to make the right decisions about how they target the customers they want.

Firms need to have the right people with skills in more than one area of marketing, meaning they are able to produce the most relevant content that makes sure the firm is found online and then deliver the best possible customer journey.

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The future of legal marketingWithin the next five years, the world’s largest law firm won’t have any lawyers.

Here’s why: Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba/Amazon, the most valuable/largest retailers, have no shops. And Airbnb, the world’s largest accommodation provider, owns no real estate.

Something interesting is happening. So is it within the realms of possibility that there will be no lawyers in the world’s largest law firm? Of course, this firm will not be providing the legal services itself, but it could have a huge grip on the market.

Over in America, Avvo, the leading online legal marketplace connecting consumers and lawyers, recently secured a $71.5m investment, taking the total finance it has raised to $132m. More than 225,000 lawyers from around the country now participate on Avvo and it generates more than 650,000 contacts for them every month – double that of a year ago.

The reality is the landscape continues to get more competitive and to succeed lawyers need to keep on lawyering and leave the marketing to the experts.

Digital marketing will become an ever more significant part of the marketing mix and despite the many advantages it brings, it also requires a more intensive approach to mastering the art and standing out.

We would, of course, suggest leaving the marketing to firms like First4Lawyers – but not simply out of self-interest but because our history has proven that a model based on good, old-fashioned co-operative values works. Through our strength in numbers, we turn a small firm’s marketing budget into a multi-million pound above-the-line, full channel marketing campaign.

Firms will need to decide if they have the resource and ability to compete with this or branch out into niche sectors.

So, what will the marketing look like?

Think mobile or forget about competing EVER AGAINThe Internet is now accessed more frequently from a mobile device than a laptop. So everything you do needs to be catered to mobile first. This not only means thinking about the look and feel being right for mobile devices, but also thinking about how you use these devices to personalise the relationship and customer journey.

Think like a manufacturerGood law firms and brands will behave like product, rather than service, companies. While legal firms aim to create a happy customer and look forward to future work, product companies thrive on innovation. So, for brands of the future, customer satisfaction and retention will not be enough. They will need to innovate more efficiently to create more value for their customers. However, great service will NEVER go out of style.

Get the data rightAs touched on in the previous section, personalised, data-driven marketing will become more refined. There is a difference between data-driven marketing and intrusive marketing. While the former is based on relationship building, the latter is nothing but old-school push marketing wrapped in a new cover. The difference between these two formats will become even more prominent in future. Marketeers who focus on relationship building will be rewarded, while intruders will be shut out.

Better tools are needed to make the best of data, and so more accurate metrics will surface. What most brands do in the name of measuring marketing success is look at hollow ‘vanity’ metrics such as likes, shares, or tweets. Even in terms of data mining, more sophisticated means to capture the right data are still being developed. The future will witness the rise of better analytical tools to help marketeers gauge the success of their campaigns. As such, marketeers are demanding more end-to-end measurable campaigns.

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Content is kingAs already highlighted, the Internet has changed altogether the way consumers are interacting with brands, products or services. In order to stand out, firms will need the right sort of quality content to be seen as relevant to the customer experience.

Customer-generated and video content will continue to play a key role in the development of any marketing plan. Consumers want visual content that is easy to digest and understand. Therefore the speed with which firms can create fantastic content will be integral to the success of their marketing.

Video kills the TV star?Despite reducing TV spend by about 30%, we’ve seen a 50% increase in enquiries from our TV adverts. This success has come off the back of big data but you cannot escape the fact that people are consuming media and content in ways other than just the box in the corner of the room.

Therefore firms cannot think of TV, video and online in isolation from each other. And they cannot just produce any old video and expect instant success.

It’s not social media – it’s the customer experienceSocial media is treated very differently to all other channels. People seem obsessed with measuring how many likes, retweets or mentions they get.

Social media needs to be seen as an integrated part of the customer experience. It is a way of communicating with prospective clients about what a firm does, delivering them the experience of the business and following up on feedback or complaints.

It’s then a route to using customers to become advocates about the organisation and brand.Equally, within five years how many firms will actually ever meet or speak in person to a client?

Social media channels will take over.And for all those firms that say, “I’m a law firm, we don’t operate like that”, be prepared to say:

“Oh. Why don’t we have any customers anymore?”

Marketing will no longer exist!Pass the P45s? Business has not reached that stage yet, but the marketing department that is still thinking about marketing in isolation, is doomed.

Marketing in its old-fashioned format is dead. Gone are the days the advertising department/agency came up with the creative, the marketing team/agency came up with the campaigns and the PR department/agency wooed the press.

The marketing department should be called the customer experience department and it should have representation from all areas of a business. This is because it should be the marketing department, not the people in IT, who are working out what innovation is best for customers. The marketing department should be working hand in hand with the operations team to ensure that customers are receiving the right brand experience. The marketing department should be working with finance to drive the right investments for the future of the business. The marketing department should be working with training to ensure the right message is being delivered to customers.

Brand is more than logo – it is about the entire customer experience. Someone needs to take ownership of it. n

Would your business benefit from joining the First4Lawyers panel?Membership of the First4Lawyers panel starts at just £10,700 per month for Personal Injury claims and £5,500 per month for Clinical Negligence claims with contracts running on a flexible 3-month arrangement.

In return you will benefit from:

Measurable Return on Investment – independent auditing shows we deliver up to 27 leads* each month per panel slot.

Quality Legal Vetting – all leads are vetted meaning our panel members enjoy an average 70% conversion rate**.

Timely Lead Delivery – our taxi-rank system means you will get a fair and even split of claims and claim types throughout the month.

Customer Satisfaction – First4Lawyers is ranking as excellent by independent reviewer TrustPilot. 3 out of 4 of our panel members said their marketing effectiveness had improved since joining First4Lawyers.

To find out how to become a member of the First4Lawyers panel:Email: [email protected]: www.comparemymarketing.comCall: 01484 440940

* Based on historical data, we would have delivered between 17 and 27 claims per month through our marketing efforts to firms at basic entry level. Please bear in mind that ours is a genuine marketing collective - there are no guarantees and those numbers could go up or down.

** We have also recently introduced direct call transfer and, based on information provided by our firms, they now average over 70% conversion across the collective.

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F4L Marketing Whitepaper_Final