Advertising costs increase with mortgage competition
The cost of keyword advertising for mortgages is increasings the mortgage market is heating up, but emails are still one of the most effective ways to communicate with customers, according to ActivePipe.
The price of acquiring new customers through online platforms such as Google, SEO or social media becomes more and more expensive as the demand for mortgages increases.
The latest Australian Bureau of Statistics (ABS) lending indicators data for January 2021 shows Australia continues to report record mortgage activity. New (seasonally adjusted) loan commitments rose 10.5% in January 2021 to $ 28.8 billion, with new homeowner loans crossing the $ 22 billion mark for the first time.
Given the competition in the mortgage market, keyword / pay-per-click advertising (online ad placement when certain keywords are searched) has increased for high volume and highly competitive keywords. such as “mortgage broker” and “real estate loan”. rate”.
For example, the cost per click for “mortgage broker” was around $ 4 two years ago, but can now be anywhere from $ 10 to $ 20 (depending on location, etc.) on Google Ads.
Noting the rising cost of keyword advertising, mortgage channel manager of the ActivePipe marketing automation platform, Paul Smith, told the advisor that the cost of acquiring new customers through the media is one of the “biggest threats brokers face”.
According to Mr. Smith, it can be very difficult for individual brokers to afford to advertise on these keyword terms.
However, he added that with the vast majority of brokerage clients coming from word of mouth, email marketing to existing clients remains one of the most profitable methods of acquiring new business.
“With all the complexity of getting noticed on social media or even on your website, email remains the easiest, cheapest, and most effective way to talk to contacts in your database who trust you. and who know you. ”
Research conducted by ActivePipe last year found that borrowers who regularly received calls or emails from their broker were more likely to use the same broker in the future.
Additionally, borrowing clients who receive regular calls from their mortgage broker were found to have the highest level of trust with their broker, were less likely to open emails based on rates from rival brokers or lenders, and were more likely to present competing offers to their broker.
Unsurprisingly, borrowers who have not heard from their broker after the settlement, even those with an exceptional experience, said they would be willing to shop around for their next loan.
Mr Smith noted that more brokers are embracing email marketing offerings, such as those offered by ActivePipe (which he said had recently onboarded its 1,100 brokers) to stay ahead with new clients and improve their chances of being referred.
However, Mr Smith added that email marketing is only successful if the content is interesting, relevant and useful.
“Gone are the days when sending promotions or RBA rate updates to your database was enough,” he said.
“People want and expect value-driven content. But also presented in a way that matches the low attention span of people online. “
According to research from ActivePipe, 95% of broker clients said they would like to receive a monthly email from their broker with lots of images and a short copy – and suggested it would help them remember their broker. and to feel connected with them.
Mr Smith said the company will continue to invest in research and technology to help brokers get the most out of their email marketing in the near future, stating, “We are running more research products, investing in new features and find more ways to help brokers communicate. to all the different prospects, applications and customers in their database. ”
You can read more about how brokers market their online presence at Advisor Elite Broker Podcast and keep an eye out for next month’s edition of The advisers magazine, which also includes a feature on digital marketing.
Annie Kane is the editor of The Adviser and Mortgage Business.
In addition to writing about the Australian brokerage industry, mortgage market, financial regulation, fintechs and the broader credit landscape – Annie is also the host of Elite Broker and In Focus podcasts and The Adviser Live webcasts. .