While many will remember specialist lender First Plus’ advertising campaign featuring TV presenter Carol Vorderman, most direct-to-consumer advertising in the past came from major brokers such as Ocean and Norton Finance.
However, in recent years this has ground to a halt. The credit crunch clearly had an impact on marketing budgets but even as the market recovered we have yet to see a return to the days when every red top and daytime TV show featured a loan ad.
“I think the onus lies with the broker market to drive this and I must admit I can’t really work out why some of the larger brokers aren’t doing this,” says Alistair Ewing, managing director, The Lending Channel. “Or it could simply be that the ‘newer’ direct channels such as social media and Google are slowly replacing the ‘old’ media.”
Industry consultant Alan Dring says brokers aren’t spending the money on advertising because they don’t know who to target.
“Second charges should be an important stock in trade for an increasing number of brokers but they remain a confusing option for many clients,” he says. “Advertising needs to be educational and not focused on rates and supported by the bonafide testimonial of a satisfied client who can give credibility to the content of the advert.”
Dring says trust and transparency is what the public want from any advice they receive therefore brokers should be promoting this aspect of their service much more than they do. “They should be shouting from the roof tops that they are renowned for their TCF approach and have testimonials to prove it,” he adds. “I am a big advocate that if you want to be considered trustworthy accompany your marketing material with pictures of the individuals making the promotional claims.”
Dring continues: “I think the reason more is not being spent in what could be a lucrative market is that too few brokers really know where the market exists and what that market demands. They do not do enough research and so do not have the data to guarantee a return on investment.”
But Steve Walker, managing director of Promise Specialist Lending, says the opportunity for real growth in the sector lies with brokers and this is where the focus needs to be.
“Seconds mainly survive on the scraps mortgage brokers generate or on the leads generated by comparison site,” says Walker. “Both of these funnels are wide open to potential second charge customers. Comparison sites are very effective and potentially even convert unwitting homeowners to a second charge loan when they originally wanted unsecured.
“The intermediary mortgage industry is where the opportunity lies and however you dress it up, a large percentage of brokers still can’t be bothered to engage with second charges. Those who do quickly realise the benefits and will start to talk to their clients about seconds and thus education improves. Those who don’t are perfectly entitled to ignore seconds by narrowing their scope accordingly. But there are a huge number who dabble in seconds, when they remember.”