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Wow, what a day! Companies are dropping like flies.
The Root Exchange just sent a notice stating that they will be ceasing operations of the Root Exchange effective August 31, 2008. This comes to many of us as no surprise.
According to an email sent by Root Exchange:
Due to the unprecedented dislocation in the residential mortgage market, Root Markets Inc. has decided to cease operation of the Root Exchange effective August 31, 2008…..
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[...] down… Posted by: rleathern in Lead Generation, Root Not a big surprise, really — Root shuts down its lead generation exchange. At one point there were a lot of really awesome, capable people [...]
[...] one of the most challenging mortgage markets in this country’s history and that much larger and generously funded lead providers are folding by the [...]
[...] remains solvent, but has required numerous rounds of funding to do so. The second lead exchange which is now out of business, was started with a great deal of capital (from what I understand). Lewis Ranieri, who is now [...]
Now where will I go to trade all that Attention in my brokerage account ? It is a sad day when we have to trade our meager thoughts and ideas in taverns and on streetcorners, away from the cleansing light of an open market.
A few years ago when we started doing business with Root I had high hopes for them. Over time as folks left the organization and the little traction they had went away it became clear they would struggle to survive.
Recently with the drastic reduction in lead volumes in the space where I play I actually started buying leads from them again. It was easier than going through the due diligence and set up process with very small providers and they converted decently…for the price.
Luckily it is not a material volume number for us. Same for Low.com. However it is a trend that makes me nervous. While I think that some attrition in the market is a good thing (only the strong survive) I can’t find enough leads in my space to meet my growth targets so any attrition at this point is hard.
With Google looming I am not sure that this won’t be a common story in late 08 and into 09. Hope the good lead companies have a plan to adjust to these market changes. I know that as a lender we are re evaluating our strategy almost daily…
Someone made the point that it was coincidental that ileadexchange was just starting up. Any correlation between the two (i.e. former root people taking another shot at the exchange model)?
Buyer that is interesting.
LeaBuyer,
This may be common for lead-gen companies that are only focusing on mortgage. Many, however, do not just focus on mortgage, but there are also a number that do. Those companies are in trouble and they know it.
I don’t think there is any correlation between iLeadexchange and Root, other then they both will probably have they same outcome. Just an opinion though.
iLeadExchange is not even an exchange. They are just a lead provider, and the jury is still out on them. I’m still not a 100% clear on how they generate leads. As for Root, well I have some insight there, but I’ll reserve the discussion to a LeadsCon 2008.
Will a similar fate befall Leadpoint?
Sure the idea that playing in a single verticle is bad makes sense. I agree its a bad model as it does not allow you to adjust to weakness in one market.
that being said I hope that the stronger providers re able to produce volume in excess of what we are loosing in. Root and Low.
Raj I am anxiously awaiting your thoughts at Leadscon 2008. I will be in Vegas!
That proves how good the Root Exchange was…going out of business and still hanging in top 10 of Lead Marketwatch.
Who will we see there next?…MortgageExpo, FastFind maybe LoanPage?
Question for LC readers : do you believe that the capture date on your leads is accurate from the provider ?
In the past lead providers provided a field with the server posting time, the time that a lead was captured on their site. I used to compare this to the delivery time of the lead and monitored the “Real Time” speed it took to deliver to me. I often found discrepencies and server delays for the lead providers. Within six months, (About 1.5 years ago) almost all lead providers pulled the plug on the field with the server posting time. Why? Your guess is pretty much as good as any of ours….
Booty,
What exactly do mean by capture data? Are you talking about what Noel is talking about or the data in general?
I am talking about what Noel is talking about. And what I want to know is, why don’t the lead buyers demand this field ? This to me seems one of the key “cleansing” aspects of using an exchange — the exchange has an obligation (and I’d argue an incentive) to be forthright about when it received the lead (presumably buyers or their LMS can determine when it was delivered).