Google’s Comparison Ads has been live in the U.S. for about a month and a half and many are curious to know how well it is working for the lenders involved. Well, for starters everyone should understand that all the lenders are currently bound by an NDA and all public comments by the lenders go through Google for approval. Lucky for us our friend and mortgage refinance was able to get his opinions approved by Google and subsequently we are able to publish them here. specialist at RMC Vanguard Mortgage Corporation, Owen Raun.
So with out further ado An Insiders View of Google’s Comparison Ads:
By Owen Raun with RMC Vanguard Mortgage Corporation
RMC Vanguard has been a lender involved in the initial stages of Google’s venture into mortgage lead generation. Google makes this on line shopping option available to a limited number of consumers in 15 states who are searching for mortgage. We are only active in 5 of those states and focus only a smaller range of consumer profiles than most so I imagine we are in the bottom quarter of total leads received to date. Assuming this blog will be read by lenders I have the following comments.
1 – Lead quality. The best news for lenders is the lead quality. Consumers have already viewed pricing and costs from several lenders in a very easy to understand interface. So once a lead calls us or requests a call back from us we have already passed whatever pricing threshold the consumer has in their mind and have made the consumers “short list”. The leads we have received are more engaged and less “evasive” than leads from other lead generators. Other factors that speak to lead quality is the Google name which lends a level of trust, a consumer masking system that allows the consumer to initially communicate with lenders without sharing their phone or email addresses and the fact that the consumer is making a choice to speak with us, rather visa versa.
2 – Accuracy of quotes. Lenders are not uniform on what costs we include in our quotes. This is a bigger issue with Google than other auto price quoting lead generation systems since lenders are initially ranked by APR. If 2 lenders have the same rate/point and costs but one leaves out a 3rd party appraisal then that lender would be displayed higher than the one with the appraisal cost. Something I think Google will need to monitor or perhaps the new GFE format will be something we can all adhere to. However, it will probably take some time to adopt as we are all used to the old way of quoting costs and Google built its interface on the old set of costs.
There are also some bugs in the system that allow for slightly misleading quotes. The main example I have is that FHA quotes look better than conventional at LTV’s below 80%. The system drops the required MI from the calculation. This and other bugs are being worked out by Google and its lenders.
3 –Lender Competition. I am not familiar with all lenders on the initial stages but it seems that a couple have yet to work out their pricing. Being able to have your pricing display accurately takes some work. The lenders I know that are using Mortech all seem to be within a normal tolerance. There are a few others that seem to need some work (not sure if they are using Mortech or not). I doubt any would knowingly quote rates that would lose money I also don’t think anyone would willingly bait and switch consumers. Google is going to work in some type of consumer experience factor so lenders that do bait and switch will eventually be called out. A standard set of best practices and some basic on-line police work will clear this up.
4 – Tracking. Leads that request that we contact them come with a name, Google phone # and ID #. We can track these and build assignment rules around them. The lead also shows what quote and scenario the consumer viewed prior to selecting us. However, a consumer also has the option of picking up their phone and calling us. So the initial contact with a consumer is an inbound call. Lenders like us that are setup to get the lead then make the call have some adjusting to do. I think that a consumer that has viewed our pricing, viewed our costs and has picked up the phone to call us to call is a pretty good lead. I am not wanting to throw out the baby with the bathwater but it would be nice to know a bit about that consumer prior to the call in, plus be able to rout that call to one of our LO’s who is licensed in the consumer’s state. Google does follow up with a notice that a call was made but these notices do not fire out immediately after the call and I as a manager do not have a way to track who took the call other than to ask the LO’s “who took a Google call?”. Not really good lead management on our part at the moment.
5 – Pricing. To date the leads have been free! Google will soon start a bid system where lenders can bid by filter or profile what we would want to pay for a refi or purchase lead and what we would want to bid for a phone or web contact. Sine this hasn’t started I have no idea how the bid system will effect which lenders are displayed and what a lender that bid X would pay for a lead when all other lenders bid above or below X. Google has discussed this with its lenders and assures us they have designed the logic of the bid system so that our best option is to bid a fair price for what we want, no more, no less. Also, I am assured that a lender that has bad service and high rates cannot outbid other lenders for “position” on the display. More to come here.
6 – Volume. Due to our limitations we have only been getting 1-2 leads per day. Others have told me they are in the 20 per day range. Google has said there is a very large amount of mortgage related searches each day and that they think they are confident they will be able to produce a large amount of leads. Volume seems to be the least of their issues.
In fitting with Google’s way of things they have released the system with known bugs. They are aware of my issues and probably have a stack of issues from other lenders or lead management/pricing systems. And there are more pieces to the system that are being developed, such as allowing consumers to review and rate their lenders, additional filtering abilities for lenders and some way of allowing consumers to learn a little more about the lenders they are seeing on their screen. Assuming all bugs can be fixed and lenders play fair with their quotes I see no reason why Google play a prominent role in the current mix of mortgage lead generation options that are available today.
.
.
.
