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Why online marketing doesn’t work

by: Justin Rees
  • 04/07/2011
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Why online marketing doesn’t work
Justin Rees, director of marketing and partnerships at LeadPoint UK, explains why brokers need a targeted and money-smart approach to accessing the wealth of online mortgage customers.

In May this year, Google broke a new record with more than a billion unique visitors to its websites over the course of the month.

Perhaps, this is the most compelling statistic for anybody that still needed proof that the internet is relevant to them.

The fact is that Google and other companies have transformed the way traditional businesses in multiple sectors operate and ushered in a whole range of billion-pound industries that did not even exist a decade ago.

And for anybody that thinks this doesn’t apply to the UK and doesn’t apply to finance then think again. Greenlight search, which publishes regular reports about how consumers are behaving online, found some very interesting statistics in their latest study of the online finance market at the start of the year.

In January, there were almost one million mortgage-related searches on Google, with 370,000 searches for the phrase “mortgage calculator” alone.

This was the highest number of monthly searches online since March 2010 and mortgage searches have been growingly steadily over the last quarter of 2010 and into 2011.

While Google accounts for the majority of online searches, these statistics don’t include any of the other search engines or any other online advertising mediums, such as display advertising, email marketing or the burgeoning social media sector.

So, whether you are a sole practitioner operating locally or a large national brokerage, your customers are going online more than ever looking for financial advice. If you are not there at the moment they are in the market for financial products and services, you are losing out on business.

What next? The most natural assumption for any adviser is to use these huge numbers of consumers going online to their advantage and create an online presence to try to capture their interest and their contact details. That means creating a website and driving consumers to that website.

Looking at the range of options available, online display advertising and email marketing, while both very effective, require a huge amount of expertise and investment to generate leads. At present, there are no real self-serve or simple platforms to enable firms of all sizes to operate in these markets.

However, as the statistics suggest, a huge portion of these consumers are going online and actively searching, which means they are going to Google and luckily Google provide a whole range of tools for advertisers to get consumers onto their websites. Well that’s the theory anyway.

What Google doesn’t tell you is that while they can help you optimise the number of people clicking to your website, they can’t really do much to help you turn those clicks into prospective customers or leads.

Therein lies the biggest problem for adviser firms looking to harness the power of Google and online marketing.

What seems at face value to be a level playing field for firms of all sizes is actually for many competitive verticals, such as finance, an extremely easy way to lose a lot of money fast.

Take a quick look at the numbers and it is not hard to see the size of the task faced by any firm wanting to generate leads for financial services on Google.

If your primary business is remortgage, you might create a campaign on Google to get people to click on your advert promoting your remortgage advice services. While hundreds of thousands of people are searching for mortgages on Google each month, there is also intense competition for these customers which means you might have to pay £5 or more just to get a consumer to click on your mortgage advert.

This is where it becomes tricky. Firstly, there is no guarantee that anybody is going to click on your advert. Irrespective of how good your advert is, you are competing for the same eyeballs as every other advertiser, many of whom will be household names.

If somebody does click on your advert, there is no guarantee that they are going to request to be contacted or leave any contact information. What makes it worse is that if somebody mistakenly clicks on your ad you still pay each time.

Even if a consumer does click on your advert and tries to contact you by filling in some sort of data capture form, there is no guarantee that their details are genuine. Google don’t offer any sort of validation after the consumer has clicked and you can’t apply for a refund if somebody has inputted a wrong number.

There is also no guarantee that, despite your best efforts, the consumer is even looking for a remortgage when they request to be contacted and even if they are, do they meet your criteria?

What is their LTV and their credit profile?

Although you can target keywords and geographical targeting is getting better all the time, you can’t target consumers by their LTV or credit profile until they have already clicked on your advert which is costing you money.

What the above scenario illustrates is that online marketing is an increasingly scientific discipline where only specialist companies can really make the numbers work.

Essentially, any adviser firm spending any money on marketing online is really trying to generate leads and the most efficient and cost effective way to get leads is to go straight to a lead generation specialist.

Lead providers have the expertise and the resources to capture these consumers and turn them into prospective customers that you can do business with. So, why pay for clicks or banner adverts when you can go straight to leads.

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