It has been noted by two source, one here on ABestWeb Forum that LowerMyBills has cut their affiliate payout by over 62%. They were currently paying out their affiliate partners around $20 per refinance lead and now have lowered it to $6.00. I believe this is the second cut this year and moves the payout from the original price of $40 to $20 and now $6. LendingTree also cut their affiliate payout today as well. I have not confirmed the amount of LT’s cut, but this also would be the second time this year they made a cut as well.
There are a couple of issue or questions that I think should be raised and lead buyers should possibly be concerned. The first is volume issues. With a huge reduction in payout this could easily lead to a reduction in the amount of affiliates that will be willing to drive traffic to LMB’s forms. The second reason why you should possibly be concerned is that a lower payout could drive poor inexpensive leads to you through their network. What the lower payout may do is drive away quality affiliates to other advertisers and possibly keep inexperienced affiliates that are satisfied with a lower payout on LMB’s program.
It seems as though the low pricing they have been giving many buyers is now forcing them to adjust their marketing spend. We have discussed this subject in the past and many of us have hypothesized that a cheaper lead price would inevitably translate into cheaper marketing buys and a lower quality of lead and this seems to be what is happening. I have said it before and I will say it again, LMB dug themselves a hole with there pricing strategy. Now they have been left with only one options and that is to lower their marketing cost. The only way for LMB to do this is to change their affiliate payouts. LMB typically buys ad space in bulk and is locked into long term contracts with major publishers. This leaves them with little to no flexibility and eliminates cutting their media buy significantly has an option.
Anyone want to add anything or give their opinion on how this could effect LMB?
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On kaleidico, LMB is number 1 quality rankings.
Don’t be a hater
Unless you are working their leads you are just speculating with negativity.
Why would they be so big and ranked so high on kaleidico if their leads suckes
Nowayoj,
Your right, I should stop being critical of leads and change this blog to LeadLove and simply be happy with everything in the industry. Then I could add flowers to the site and make it look really pretty .lol
first, I am not hating. Simply informing you to what is going on with their marketing and why I think you should possibly be concerned. Maybe none of this matter and doesn’t make a difference, however that is up to you to decide.
I have not purchased an LMB lead for at least 7 months and so you are correct I am only speculating and I don’t think there is any question there. I never said that LMB leads were not good. I know when I bought them, 100’s a day, that they were only average amongst the 15 provides I bought from. I must say that is only my experience and each buyer may a have a different one.
With regards to the LeadMarket Watch Widget. Boy, it is flawed and I have stated that numerous times. I placed it on the blog because it is the only widget of its kind and for the longest time I wasn’t sure that I should post it here because of its flaws, but I did anyway. I think it could be useful with some changes. Do you really watch that thing on a daily bases? It is more volatile then my wifes temperament. That is beside the point really. The fact is that it is comparing apples to oranges.
LeadPoint could be number one and could be showing a 18% app rate, but what does that mean?? They could be sending 20 leads a day into the Kaleidico system from the state of Hawaii to a local Hawaiian. If you don’t know, Hawaiians would much rather do business with locals, rather than mainlanders. Then you can have another company, lets use Adchemy for an example, that has a 1000 leads going into the Kaleidico that are all CA leads, the most competitive. Do you think that comparison would be fair and accurate? What if the person buying the Adchemy leads did not know how to use the Kaleidico system either? Would that accurately reflect their leads? No, of course not. So you have to take the LeadMarket Watch widget with a grain of salt and use it only for finding new lead source, not to determine there success or quality.
Read the post again and let me know your view point. How do you think a lower marketing spend would affect a lead generator??
Thats the question.
Also related is the decline in the number of mortgage advertisers in Commission Junction. A year ago, CJ had a dozen or so mortgage lead generators in there, now there are only a couple.
It will be interesting to see what earnings reports are like from the major SEs and online media guys during q4 07 and q1 08. My bet is that we will see some declines in earnings…
Also, one other comment with regards to the Lead Marketwatch widget.
When did 10% ever become a good application rate? Funded rate yes, but app. rate, never.
I think the key is for brokers to keep a constant eye on the performance of the leads that THEY are receiving. Averages across states, quality, and other filters are meaningless.
So what your’re all saying is he widget, which pulls real data from real providers and lenders and is provided by a neutral 3d party , is worthless.
But the opinions and speculation of a critic who hasn’ worked leads in 7 months is useful?
Give me a break
Yes and no. What do you think, based on what I said about the widget? What is your opinion? I think it is a GREAT idea, but I think it needs fine tuning to be statistically relevant. Many times it doesn’t matter if it is a neutral 3rd party or not, especially if it is statistically relevant, as I said. Do agree with that statement?
Has far as what anybody says or claims to know you should take it all with a grain of salt and make educated decisions based on your own findings and research. What I say may be way off and that is what the comments section of this blog is for. You can disagree or agree however you wish and we discuss the issues.
Any thoughts?
For a lead publisher the market seems to be at a difficuct stage, are their any affiliate programs that are paying a fair return if you generate quality leads out there?
Along with lowermybills & leadpoint lowering their payouts, many companies have gone away from affiliate marketing all together, my guess would be as a result of allowing to many non quality lead providers to join in the first place and dealing with the fraud challenges
your spot on—-
affiliate sourced leads……..? come on you guys
OJ I’d have to say you are missing some of Critic’s key points.
I have a question for you. Is it your opinion that not buying leads for 7 months negates years worth of experience?
So my auto mechanic who hasn’t tuned up a call in 7 months cannot work on cars anymore or has forgotten how?
Or my doctor after vacation has lost his training and knowledge base and will never treat a patient again?
Seriously after having purchased mortgage leads for five years and being out of the buying side for 5 months I have more information from the providers now then I ever did. Common.
I really think input on this site is CRITICAL to how well it is received, the experience we get, etc. but it sounds like there is something else going on here then just feedback.
Am I wrong?
LeadPoint doesn’t exactly have control over what its payouts like LMB or LendingTree… Our payouts are still much higher than LMB and others out there.
It doesn’t take a genius to realize today’s market for generating mortgage leads (or even mortgages for that matter!) is very different. That said, today’s conditions have created an environment where we can look at lead performance even closer and modify arrangements with our sellers based on that data. Good guys get pats on the back, bad guys lose their wings.