Law firms using the Internet can generate significant additional revenues and profits by doing so. And law firms can learn a lot by studying their web traffic and who’s coming to their site.

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An entrepreneur who had just sold his business for $20 million explained two fundamental rules of business this way:

“There are really only two things that matters in building a successful business,” he replied. “How much one unit costs and how much you can sell that same unit for.”

He explained that nothing he learned in business school was more important than understanding the cost of goods and pricing. Those two factors more than any other determine the success or failure of a business.

Law firms need to understand a similarly vital calculation when it comes to digital marketing: How much are firms paying for each set of eyeballs that looks at their Web site? How can knowing this help firms make better strategic decisions in their marketing spend?

Los Angeles firm Allen Matkins Leck Gamble Mallory & Natsis studied its Web marketing spend and was surprised to learn that some types of exposure online were very low-cost (like blogging) while others were extremely expensive (like the various lawyer-rating services.)

The calculation was a simple one. He divided the amount spent on the Web site, blog or aggregator by the number of visitors to each particular destination. This calculation gave him a per-view or per-impression cost.

To test his findings, we sent a survey a dozen firms, and five returned data concerning their marketing. Perhaps the biggest surprise to both of us was that many firms (even very large ones) had never looked closely at these data; most had never tracked their spends and compared it with results. This is major strategic error.

A firm’s Web traffic tells a story. It tells what is working for the firm and what is not. Once firms understand the price they are paying for Web traffic, they can make better-informed decisions about creating content, whether in the form of legal alerts, articles, lawyer bios or blog posts.

According to our research, based on reports by a mix of midsize and large firms, the cost per click on firm Web sites was between 2 cents and 7 cents. For blogs, the range was wider — 2 cents to 10 cents. This reflects the fact that some firms use free blogs while others use paid services; there are companies that aggregate blog and Web site content and distribute them for a fee.

JDSupra, for example, is an aggregator that shares your content online via Twitter and LinkedIn and sends weekly digests through e-mail. Lexology provides a similar service, but works with organizations such as the Association of Corporate Counsel, so some percentage of the audience is highly targeted. Mondaq redistributes news information to a variety of media outlets. Our research showed the cost per-view for these services ranged from 6 cents to $1.

We found that by far the most expensive cost per page views were charged by some of the lawyer-rating services — $1.25 to $2.50 per page view. At these prices, the data don’t indicate that this is a bad deal — just more expensive than the alternatives.

Many consumer-based law firms use a service called pay-per-click advertising — firms pay to land at the top of Google results, then a fixed amount for each individual who clicks on the link. A click from a search for “automobile accident” might cost between $15 or $20, while more specialized clicks from a search for “mesothelioma lawyer” might cost as much as $100 each.

Is it worth paying these high prices? Often, the answer is yes. For a personal injury case that worth millions in fees, it is worth it to spend tens of thousands of dollars on pay-per-click advertising. For bankruptcy or employment law, it might not be worth the price.

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