Updated September 2018 – Let me preface this article by clarifying that reverse mortgage leads are the exception to this situation, as reverse mortgage prospects are not using the loan as a means of closing on a home. This makes the window of opportunity much wider to capture reverse mortgage prospects. If you are seeking reverse mortgage business, skip this gigantic article and get right to the September 2018 good stuff.
You’ve searched high and low to find a consistent supply of high-quality/exclusive mortgage leads but your mission continues to fall short.
With every new attempt returning more of the same, your optimism leads you to hope that you are one more attempt closer to finding the holy grail of mortgage lead generation.
Maybe this sounds familiar. “I’ve tried generating leads with IDX websites and the leads were crap. I’ve paid Facebook lead generation companies to generate leads and it didn’t work out. I’m starting to wonder if high-quality mortgage leads are even a real thing or if this whole situation is some kind of mythical Sasquatch.”
If you have never run a single Facebook advertising campaign, simply replace the ‘Facebook ads’ with whatever means of advertising you have tried in the past. The reason they all fall short is essentially the same – across the board.
Whether you have actually run any advertising or not, there is a wealth of mortgage business wisdom to be obtained with the information I have to share with you today.
I’ve generated many thousands of mortgage leads using both Facebook Ads and Google PPC ads, and if you have hired me for Facebook lead generation, there is an apology in order.
While I do feel that I made a valiant effort to emphasize the right way of handling the leads generated with Facebook ads, which is to use them as a resource for building referral relationships, I don’t feel that the message was clear enough.
In taking a step back to re-evaluate the entire situation. clarity has emerged.
With that in mind, let’s take a look at the 5 ways mortgage leads generated with Google ads eat Facebook leads as part of a balanced breakfast.
1. Google ads enable you to deliver a specific solution to a specific intention/question/problem.
Facebook advertising is designed to target a specific audience based on their demographics/interests/behaviors.
Google search network advertising is designed to target people making specific searches at the exact moment they are ready to receive information. Having that information handy, it’s best practice (and expected) that you will utilize the searcher’s intent to craft your landing page content specifically for that.
If somebody searches for ‘lowest mortgage rates in Idaho’, this is not where you want to show them ads or landing pages talking about ‘fast and easy online prequalification’. You could definitely mention that, but it should not be the focus of the page. It would be an even greater mistake to run the ads to any pre-existing page on your website that has not been optimized for AdWords conversions specifically.
Google’s objective is to show relevant information to searchers. They even rank the ads based on the ad copy/landing pages/overall situation being directly relevant to the search.
If your ads and landing pages are not directly relevant to the specific keywords being searched for, you will be (and may have already been) witness to the fastest way to waste an ad budget ever created. It’s not the right way to approach this situation.
Leads generated with Google Adwords have shown a specific buying intent immediately prior to seeing your ad. They are looking for a solution to their mortgage financing right at that moment, but they are looking for it based on the type of search they are making.
2. High-quality borrowers are not spending more time than necessary shopping for home financing. Your window of opportunity is equally narrow.
Let’s talk briefly about a hypothetical family with a sizable bank account, consistent revolving credit lines, and zero credit issues at all. Your dream borrower.
If they do not have a pre-established relationship with a mortgage loan originator they trust in a meaningful way, how do you suppose they will go about finding one?
Or better yet, here is a hint/question. When was the last time you helped a family obtain a mortgage in a situation where nobody used search engines?
This Pew Internet survey from 7 years ago (most recent I could find) showed that 92% of internet users used search engines to obtain information. It’s fairly safe to assume that this number has increased since 2011. There is no way to use a mobile phone these days and get around using a search engine. That’s the world we live in.
Combine that wisdom with this research from the Consumer Finance Protectiontal Bureau, “Seventy-seven percent of borrowers only end up applying with a single lender or broker, instead of filling out applications with multiple lenders or brokers to see which can offer the best deal.”
Now let’s throw in the CFPB’s 2,000 pages of regulations, a shorter attention span than ever known to the human race, concerns about personal data leaks, concerns about getting SPAMMED to death for the next five years, and concerns about the impacts of multiple credit inquiries on credit, and you have a perfect storm.
People have changed the way they do everything.
Shopping for mortgages is not fun.
High-quality borrowers are not interested in spending any more time on it than they have to. And they are not.
The reason your lead generation efforts continue to fall short is because you are not reaching borrower prospects who are searching.
If high-quality borrower prospects obtained information about businesses using the old school Yellow Pages book, we would be having a different conversation.
The mortgage process is, after all, the least fun aspect of the entire homebuying process (other than possibly moving).
High-quality borrowers who know they can get the best rates are looking for financing they can live with. Something that allows them to get their family into their new home and move on with their life. That’s it.
This makes the window of opportunity to catch a prospect at the right time extremely narrow. As narrow as a single moment.
Since Facebook ads are not displayed based on specific behavioral timing (such as conducting a search), you might as well be playing the high-quality mortgage lead lottery. And even if you do find them, how is offering information about downpayment assistance or hot deals on the market going to help you find borrowers that have selected homes already and who have money for a downpayment?
If you want to get leads using a Facebook campaign, you cannot assume that anybody has found a home, because the vast majority have not – and will never. Its a basic choice between zero leads, crappy leads, and righteous leads – and the choice is yours alone.
If you have a $20 sunglasses business, we are going to have a completely different conversation. Almost anybody can be in the market for a $20 pair of cool sunglasses at any moment in their life. The timing is not so important.
Facebook leads for Realtors can even be effective because Realtors generally have a wider window of opportunity. In fact, our entire Facebook mortgage lead generation strategy was based on the idea of generating leads for Realtors in an effort to establish a referral relationship. And if the leads are used in that way, they CAN work. It’s just not a short-term strategy.
After all, people can be house hunting for two years without having even talked to a Realtor. Unless they have significant problems, they are not spending two years finding a mortgage.
Google search network ads ensure the timing of your information is always delivered at an appropriate time.
3. Since the relevancy and timing situations are corrected with Google ads, you can get paid back faster.
For example’s sake, let’s say you’re a mortgage broker and you are looking for mortgage prospects which are planning on & capable of closing on a home loan in the next 60 days.
Since Facebook users have not shown any specific buying intent, the ad must be delivered with a very low perceived threat level. Considering a very small percentage of any audience is going to be in a position to close on a home in the next 60 days, we are disadvantaged from the very start if we run Facebook advertising to get mortgage leads.
If you want to connect with people, you have to give them something to help them in their situation. If you start telling people about your fast and easy online mortgage pre-qualification you are going to scare them – nobody wants to get a mortgage and when they are on Facebook they are not looking for one. You’re scaring them!
Two often-effective Facebook mortgage advertising strategies include offering exclusive access to the best deals on the market (delivered through a Realtor) and offering information about government assistance programs.
Since both of these approaches assume that the prospect has not already found a home or has not researched enough to know about these programs, you can safely scale realistic loan closing timelines to match.
These leads can be used effectively but in order to do that, you must be prepared to focus on generating referrals for insurance companies, Realtors, contractors, and anybody else.
Even if you decide to prioritize building referral relationships – it takes time. And you are not in a position to make referral demands in return. This is, after all, an indirect growth strategy.
The problem is that your window of opportunity is much smaller than every other service provider I just listed.
On the other hand, if you are running Google Adwords campaigns to generate mortgage leads, and your landing pages/ads/and keyword targeting are all optimized in the right way, your landing pages are linked to your privacy policies, you have a chatbot designed to engage potential customers, and you are good at what you do – prepare for an avalanche of high-quality mortgage leads, because that is how this works when it is done properly.
You will still get the occasional lead who has not found a Realtor, providing you the opportunity to refer them to one – but properly generated Google AdWords leads are going to be of a much higher quality in general. You won’t have to spend as much time strategizing a year of follow-up emails to each person, and figuring out how to do that in a way that doesn’t piss them off (good luck).
Google Adwords campaigns allow you to track your investment much more closely, scale it accordingly, and pay yourself back for your investment in a much shorter time frame.
4. Consider the quality and consistency of the market/audience data you are working with.
According to the Genworth Mortgage Insurance First Time Homebuyers Report, “Between 1994 and 2016, first-time homebuyers purchased on average 1.8 million single-family homes each year, accounting for over one in three of all single-family homes sold, and 45 percent of the purchase mortgages originated. “
Add in this Statistica research showing Facebook’s US market penetration at around 63% in 2018. If we assume the data is even among users and non-users, that should mean somewhere around 1.134 million first time homebuyers are at least monthly Facebook users.
That’s fine and dandy until we build a first-time homebuyer audience in Facebook ad manager consisting of people who live in the USA, excluding people who work in the real estate industry and those who own homes already. In doing that, our potential reach is 68,000. That’s a long way from 1,134,000 (63% of 1.8 million).
This implies that either the Facebook data is massively inaccurate and/or that somehow people who have been labeled as likely to be a first-time homebuyer, are also getting labeled as homeowners (also… inaccurate).
The truth is that we may never know the truth because the data being used is proprietary. Considering the recent heat Facebook has been receiving about its use of data collected, its safe to assume their market data is not going to get a significant quality boost any time soon.
Google search network ads, in contrast, are shown when people are interested in your product/service, in their search results, before the actual search results.
5. Is the context/means of communication you are using appropriate?
Many people (including myself) are not prepared to make a large financial decision based on an ad that popped up on their Facebook newsfeed. Not everybody is me, obviously, but I would personally go out of my way to avoid the ad in order to keep somebody from soliciting me over a personal communication app, like Facebook Messenger.
Even if a prospect likes you, it would be wise to assume there will be at least one Google search conducted at some point along the way – and it’s likely to be right when they are ready to have a real conversation.
If you have not prepared a strategy for remaining in front of these prospects every few days, for at least a year or so, without bothering them (fine line to walk), how are you going to stay relevant in their minds when the right time arrives?
If anything, generating Facebook leads that are earlier in the process than they would ideally be, is more likely to take you out of the running than it is to keep you in it.
If you fail to seal the deal, they are likely to move on.
You could try snail mailing a refrigerator magnet to each one. It’s worth a shot. If you do, please let me know how that goes.
If leads generated through Google search are so much better, why does it seem like fewer mortgage companies use them?
Three primary reasons.
1. Google Adwords campaigns require more work to implement.
In order to run a Facebook ad campaign, you have to create a Facebook page, be able to navigate the Facebook business manager/ad manager backend, and understand the audience targeting.
After that, you are well on your way to generating lead form leads. You don’t even need an external website in place at all. Up and running in about 10 minutes, if you have an ad template that works.
On the other hand, generating leads using Google Adwords requires more work. Outside of simply running the ads to the right audience, Google uses a quality score rating to rank your ad among other keyword competitors.
In order to obtain a high AdWords quality score, your ad must match the intent of the search term. The landing page the ad directs visitors to must match the ad copy. You have to have a consistent, and highly relevant message.
Your privacy policies must be linked to your landing page. Your various calendar scheduling, email follow up, and chatbot creation/integration must be created and implemented accordingly.
This can create a large number of needed landing pages, relevant content, and corresponding tracking/conversion codes to follow the conversions and ad remarketing throughout Google’s display network avenues and even to follow people back onto Facebook with retargeted advertising.
One possible solution to minimize some of this is to use landing page personalization with dynamic page content, which adjusts the content of the page to match the ad link clicked on. It can also use a number of other knowable details about a prospect and change the page content based on that information.
The content still must be created and the dynamic pages still must be tested and set up.
In order to get an Adwords campaign up and running, all items mentioned above must be addressed, in addition to landing page design considerations, keyword metrics to decipher, domain name/website hosting situations to set up, a variety of thank you page/tracking code implementations, call tracking systems to integrate, and A/B tests to run on all of it.
I said the mortgage leads generated are higher quality, I didn’t say they were easier to generate.
2. Adwords campaigns can require a greater upfront (and even ongoing) investment.
Since the work required to implement the Adwords lead generation campaigns, the cost to implement has a tendency to scale accordingly.
In addition to requiring more work, people who are capable of and willing to do everything needed to run an Adwords mortgage lead generation campaign are much fewer and far between than those who can watch a quick Youtube video to learn how to run Facebook ads.
Google Adwords campaigns should start slowly, then budgets should steadily increase as results begin to come through. This is not a place to cut corners in regard to data collection, testing, etc… It’s also not a place to try and rush the results.
3. Like everything that is worth doing in life, this takes time. Most companies want to see something immediately. If you want something immediate, buy more leads from Experian and see how it goes. Maybe the 5th time will be a charm.
This is a quality of life issue for me. If you can’t afford to start running Google AdWords campaigns, do not start. Putting pressure on anybody responsible for your campaigns would be the wrong way to approach this. You want this person to be in the right state of mind at all times. Any additional pressure would be a mistake.
That said, you are going to be excited when results begin rolling in. That’s normal.
It’s not OK or normal to check in every hour for status updates. There is no amount of money that will make it OK, either (don’t believe so anyway).
‘Patience, young grasshoppa.’
– Mr. Miyagi
How are the top mortgage lenders generating mortgage leads?
Might be a coincidence (probably not) but, 6 of these top 10 mortgage lenders dominating the mortgage market all appeared just on the first page of this PPC competitor analysis created with SEMrush.
The others are further down the list and are all included in this single report. This was the first one I ran, actually.
In fact, the lowest estimated Adwords ad budget, of all top 10 lenders specified, is Flagstar with an estimated $67,400 monthly Adwords budget. They also closed only $26 Billion in loans in 2016. Poor guys.
These companies are not blowing money on AdWords just for the fun of it. It’s also no coincidence they all appear in this SEMrush PPC competitor list.
They just have the resources to take a sip from the fountain of high-quality mortgage leads.
A couple detail disclaimers/clarifications.
All statements made here are, of course, assuming that a strategic keyword/ad/landing page analysis has been conducted and that ads/keywords/landing pages you put into place have been created with success in mind, based upon those findings.
You have to know what you are doing, or hire somebody who does. Otherwise, you will be witness to the fastest waste of an ad budget you have ever laid eyes upon.
If you go out and run Google PPC ads to your homepage or some other random page, do not expect better results. This is the most common AdWords mistake I see, and I see it more often than not.
Sure, both Facebook leads and Google leads are capable of coming fully equipped with prospect phone numbers, email addresses, and much more. Ultimately, the lead quality varies substantially between the two advertising channels. Particularly if you are in the mortgage business.
Also, for comparison’s sake, I am simply comparing Google Adwords search network ads to Facebook ads, and am assuming for the sake of personal sanity, that there is no prior Facebook Pixel / Google remarketing data which has been previously been collected to use.
If you are looking for somebody who has experience with every aspect of generating high-quality mortgage leads using AdWords and other PPC advertising, who has also been licensed as a mortgage loan originator and real estate agent, you found me. Feel free to reach out.