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Industry Updates

Marketing Insights Review

4 MINS

Andy Cullwick, head of marketing, May 22, 2019

The first quarter of 2019 was a record breaker, with more money invested in marketing across the personal injury and medical negligence sector than in any period since we started producing these insights five years ago.

The top 20 advertisers spent over £7.5m between them. Much of this increase in spend was fueled by an explosion in online marketing activity.

The first quarter is traditionally the highest-spending quarter of the year, and the last quarter the lowest. So, it was no surprise that the Q1 figure was up 44% on Q4 2018, but it was also 9% higher than the same period in 2018 and 14% higher than in 2017.

Breaking this down into activity, online spend was up 45% compared to Q4 2018, 54% on Q1 2018 and 48% on Q1 2017.

TV shows a different picture, as it is up 71% on Q4 2018, but down 11% year on year. However, spend in Q1 2019 was 5% higher than it was in Q1 2017.

We are seeing falls in spend across radio and press advertising. These areas accounted for less than 2% of total spend, but we saw spend levels fall by over 70% compared to Q4 2018, Q1 2018 and Q1 2017.

Changing marketing tactics

Traditionally TV has been the dominant marketing channel in our sector, with more money going into it than any other. However, this trend is changing and Q4 2018 marked the first time that the majority of spend went online, accounting for 52% – a figure maintained in Q1 2019. This growth has happened rapidly – in Q1 2018, online spend accounted for only 37% of the total. Across 2017, it ranged from 30% to 40%.

This is not to say that TV spend is rapidly declining. In 2018, the top 20 spent £1m less on TV advertising compared to 2017, an 8% fall over the year.

Four out of the top five TV spenders invested less in Q1 2019 than a year earlier, but the main fluctuation is that the other one ceased advertising for a number of months during 2018. We are also seeing fewer brands advertising via TV, from 13 in Q1 2017 to 12 in Q1 2018 and eight in Q1 2019. Nonetheless, the average amount each advertiser is spending has increased, up 33% year on year and 70% compared to Q1 2017.

Many of these TV changes relate to the medical negligence sector. We’ve seen six dedicated medical negligence brands attempting TV advertising at one point or another over the last two years, but there are now only two.

Over the last two years, nine of the top 20 personal injury advertisers have run TV advertising campaigns, but there were only five in Q1 2019, the lowest in any single quarter during that time.

Moving online

The top 20 advertisers combined spent £2.3m more across the entirety of 2018 to 2017, with the top five advertisers spending over £1m more in Q1 2019 compared to Q1 2018. The top five accounted for 72% of online spend in Q1 2019, compared to 64% in Q1 2018.

We’ve also seen a 33% increase in the number of personal injury advertisers and a 46% increase in the number of medical negligence advertisers using PPC as a marketing channel in Q1 2019, compared to the same time last year. However, it isn’t until you explore the different categories that you can better understand where the real competition is.

Across campaigns such as ‘No Win No Fee’, we haven’t seen any change in the volume of advertisers. There has been a 20% increase in RTA advertisers and a 33% increase in advertisers across OL/PL terms and more generic personal injury terms. But most notable has been a massive 54% increase in the number of advertisers targeting work accident terms.

A resurgent personal injury sector

Spend is on the increase across all sectors. Medical negligence was up 3.6% in 2018 compared to the previous 12 months, but jumped 31% to make Q1 2019 a record-breaking month compared to the same period last year.

The personal injury sector grew significantly more in 2018 (6.5%), but only 8% when comparing Q1 2019 with Q1 2018. But this is in the context of nearly five times as much being spent on personal injury as medical negligence.

A shrinking market?

Search volumes give us an accurate picture of what the market looks like and every quarter in 2018 saw lower overall personal injury search volumes than in 2017. While certain specific search terms, such as ‘work accident’, bucked this trend, overall this squeeze on search coupled with a growth in advertisers has led to a more competitive market.

This has been further reinforced by figures from the Ministry of Justice showing a 20% fall in personal injury claims.

This year is showing encouraging signs of growth, however, with overall personal injury search volumes up 33%; much of this is from a 153% increase in RTA search terms.

The cost of marketing

This competition means we’ve seen a steady increase in the cost of marketing over the last year.

Overall, the average cost-per-click is up 15% and the cost of lead generation up 49%. Those areas that are seeing lower competitive challenges haven’t seen massive fluctuations in cost-per-clicks, but lead generation costs are still up around 20% year on year.

The biggest challenges come in areas of high search volume, such as ‘No Win No Fee’, where cost-per-click are up 20% and lead generation costs up 63%. Work accidents, where there is the most competition, cost-per-click costs are up 30% and lead generation costs have more than doubled.