Is Your ‘Killer App’ Killing Your Business?

Neanderthal Marketing Techniques?

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Mortgage Leads

It used to be your mortgage company could create a web site and then you’re your visitors over the head and drag them off to your mortgage cave in order to obtain a lead.

The Internet has changed a bit. The speed of Internet time is more like mouse years than human years. What worked to achieve a top search engine ranking six months ago; won’t make a dent in the top 1,000 rankings now. And what worked in Year 2000 (the Neanderthal age of the Internet) can make your site as hard to find as a living wholly mammoth.


The moral here is the Internet is constantly changing. Not only is it changing, but it evolves much faster than the real world. The net is changing from a huge, free garage sale into a highly organized and highly efficient pay-per-click model.


Vast changes have occurred in the ways you can attract mortgage leads via the net. Over the last 2+ years we have witnessed the evolution in difficulty in obtaining quality mortgage leads.

MY WEB: The days of a customer stumbling across your site and somehow being mystically transformed into a “mortgage lead” are pretty much history… unless you are a mortgage company with substantial name recognition (DiTech or eLoan) and a marketing budget to match.

Continued explosive market saturation is an issue. Every time we think that there can’t possibly be any more web sites on home loans, we find that there has been a 20% increase in the number of results returned for home loans. In example, when we simply type in the phrase home loan at we find 3.6M results. The phrase home loans returns 3.8M results, home mortgage finds 3.2M pages and home mortgages reveals only 1.9M pages. Even the typo home “mortage” returns almost 100,000 pages. You have about the same odds of winning the lottery as obtaining the top ranking.

BANNER ADS: As gaining top rankings via search engine optimization became difficult due to the sheer number of web pages competing for your customers, many mortgage companies turned to banner ads. Consumers have been so numbed to the endless 468×60 banners flashing “Look at me! Look at me!” that eyes have been trained to ignore banner ads.

Also, pop-up ads, an evolutionary offshoot of banner ads, have lost much of their effectiveness due to the pop-up killer software options.

PAY PER CLICK: Mortgage companies next went to pay per click (PPC) marketing efforts. A number of problems occurred or mistakes were made by PPC advertisers, including:

1) The Rambo Mentality: When we engage clients with a PPC campaign, we found little attention was paid to the efficacy of their keyword selection as most companies have just jumped-in with six-guns a blazing, shooting up the bids.

2) Competitive fraud. In some cases we found a competitor clicking on the client’s $4 cost per click over and over (this problem has been corrected by most PPC providers).

3) Poor keyword selection. In their haste to be “number 1” in every category, companies have bid on keywords that are not always truly relevant to their specific online mortgage site. The best example of this we have seen, many times, are companies that may be regional in nature (serving Oregon, Washington, Nevada, California & Oregon) and yet bidding to the top spot for the term “home loans”. The result was that even though they were top listed for home loan, many clicks were worthless because they were from people looking for loans outside the west coast.
4) PPC management. We also find that the management of the PPC bids was almost as important as the keywords themselves. We frequently found that companies generally had the money to spend on PPC campaigns, but failed to allocate management resources proportionate to their investment. Many companies just bid and never adjust the bid, in effect they had a $1.50 bid for a keyword, yet the bid just beneath them was $0.80, so they were bidding $0.69 too much. At a 1,000 clicks per month, this equates to over-spending by almost $700 for just a single keyword.

A hidden cost of PPC campaigns are the human costs. We often have witnessed a clerical staff doing a daily, manual adjustment of their PPC bids, only to be outbid seconds later by the automated PPC management software programs.

One of the major tenets of our company is to “Let no human do what software can.” PPC advertisers can actually save human capital by automating much of the PPC bidding process via software.

PAY PER LEAD: Mortgage companies next changed to the pay per lead model, which worked fairly well. Under this model your company pays a per lead fee. A recent study found that exclusive leads ranged from $25 and upward per submitted lead. Shared leads, with each lead sent to three to four mortgage companies, ranges between $12 and $35.

REVENUE PER LEAD: We have participated in all of the above adventures from search engine optimization thru pay per lead. We have come to the realization that “Revenue Per Lead” is the next metric originating out of Internet marketing evolutionary line.

“Half my advertising is wasted. I just don’t know which half.”
John Wanamaker

With the Web and the advent of highly sophisticated tracking software, online marketers can finally say, “I know which half.”

When we first took on a client we found that many companies didn’t, or couldn’t:

1) Track their keyword bid from PPC to actual sale (if there was one) and thus they used an overall analysis of their “success” by guessing that if they had more revenue than it cost them.

2) Most companies failed to realize that expensive root words – like home loans or real estate, while good for the ego, generally don’t always result in the highest rate of return.

3) Most clients also had difficulty in monitoring and tracking mortgage leads by referral source so they couldn’t really tell that even though web site “A” was sending 300 leads per month, 20 were closing, while web site “B” was sending 30 leads per month, 15 were closing.

By using software to track your highly productive lead generation sites, you can focus on generating even more leads from your top producers. Generally, we find you can have your top producers send even more quality leads by paying them at even a higher rate per lead.


So, if your web site is still receiving traffic via the non-PPC search engines, that is good, but your future is probably limited. If you look at the latest indicators of the monetization of the Internet, ie, Adwords by Google, the acquisition of Oingo (essentially a PPC feed program) by Google (Google’s press release is even entitled “Google Expands Advertising Monetization Program for Websites – June 18, 2003”), and Yahoo! buying Overture, you can see you are nearing your evolutionary fork in the road – and you can choose with your principals or you can decide with your wallet.

And if you decide with your wallet, you must be able to not only track the expenses associated with your efforts, but also track the revenues that flow with each expense.

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