It has come:
Tipped off by Jay Weintraub, founder of LeadsCon and Author of LeadConfidential, Google recently announced the launch of Comparison Ads. Which currently is focused on mortgage rate shoppers, but obviously its name “Comparison Ads” leaves it wide open for other products to be introduced. This is big news for the lead gen space.
This new service will allow advertisers to target/filter their marketing efforts on a very granular level when compared to Adwords. When you compare it to buying leads from LendingTree, LowerMyBills, QuinStreet or any one of the hundreds of lead companies in the space there is no difference. Advertisers will be charged on a per lead basis where a lead is defined by either a phone call or the completion of a inquiry form.
Here is how a search result for mortgage may look like:
These ads will no doubt take impressions and ultimately clicks away from lead generators bidding on these keywords. They will be placed in a premium location for the best results. Once the consumer clicks on the compare rates the will go to this page and see this:
Via the Adwords blog:
While Comparison Ads is still an early-stage feature, we’ve focused on a number of ways to enhance the user experience:
- Speed — Comparison Ads shows targeted offers in less than a second. There are no long forms for users to fill out – Users see specific offers immediately and only need to fill in additional information if they wish to further refine their results.
- Transparency — Comparison Ads only shows real products. There are no teaser rates, or bait and switch offers. Comparison Ads also standardizes the information presented to users, making it easy for them to sort and compare offers on a side by side basis.
- Privacy — Comparison Ads won’t send advertisers any user information, including anonymized phone numbers, unless the user explicitly requests more information about an advertiser’s offer.
These developments are what LendingTree was looking to stop with their recent suit against Mortech. With these developments Google is now taking an active and direct role in the lead generation space. Of course they have always been a huge participant as a service provider and advertising platform, but they can now be considered competition to companies like LendingTree and others. As I asked in previous posts: Where will this end? Will Google continue to leverage their search traffic to create a massive comparison shopping engine?
I personally don’t like this move by Google for obvious reasons. Their dubious excuse for creating the comparison engine, which is to clean up the industry by presenting accurate rates, is simply an excuse to monetize their traffic even more. On the surface the objective of creating more revenue is fair, but doing so in a way that will take away revenue and traffic from their paying advertisers doesn’t seem right and definitely not fair.
What do you think?
Thanks again Jay for the tip.
I am particularly concerned by the monopolistic market power this exerts. Google controls web content for both paid search (via its Quality Score) and organic search (page rank) by controlling which ads and sites are served for each search. Since the algorithms that are used to display the results are black box, Google has the power to, at its own discretion, eliminate competitors simply by changing their discretionary criteria. This foray into lead generation only adds to their ability to manipulate the market for their own means.
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Andrew,
I think you are right on. The problem is that this could only be the start of what’s to come. They will move into other verticals eventually.
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Andrew/LC,
We differ on this. At the risk of sounding naive, I think that it’s unlikely that Google would alter their algorithms to divert traffic from competitive lead providers. It would be possible but inconsistent with the way I have observed Google normally conducts business (unless you have examples to the contrary?). I think that what they are doing is trying to improve the consumer experience of searching for the information that they are looking for, while making more money for their shareholders.
I do agree that there is no way that this is likely to just be mortgage. As I wrote on my blog the other day I think that this type of vendor comparison and consumer initiated contact model is applicable to insurance, debt, loan mod and education, to name the largest lead verticals that exist today.
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Here is a news flash – some mortgage brokers bait and switch. Google is doing quality control how? Trusting the brokers? HA! In three days they will have 17 names at 3% APR.
As for nick, you googled any bands or songs lately? try it. I think some of the guys who used to be #2-3 for that arent super-happy right now with the google / iLike implementation. Google has also tested similar results in travel. I know a couple of travel guys who are terrified…..
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Agreed Gordo,
There is no sure fire way to monitor rates, unless they have access to the brokers rate sheets, which they claim that an API posting rates in will have similar results.
Nick,
It’s not about gaming the algorithms specifically. I think it is more about allowing these rate tables to be placed in the #1 spot in the SERPS. It’s a proven fact that the #1 spot gets the most clicks. Additionally are they going to allow other advertisers to format their ads in a similar fashion? Why not? This is an unfair competitive advantage.
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I think that you are using the term monopoly incorrectly. A monopoly is only truly created if individuals have limited availability to a service or product. Technically google is expanding consumer access to mortgage information. Companies are always free to use expertise in one area (search) to provide fast, accurate results in another area (mortgage information).
Creating a better product is not fair? Really? Google creates a product which may or may not be significantly better than LendingTree and this isn’t fair? To who? Google needs to have no loyalty to LendingTree. LendingTree is free to take their ad dollars elsewhere. As Google provides all of their services to the consumer free of charge, if they do not change the terms of their advertising with LendingTree then there is no harm/no foul. This is why you saw LendingTree move to block this with an injunction against the lending generator and not Google.
Ultimately this is better for the consumer, worse for LendingTree.
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I am not sure where monopolistic power comes to play, but with 67% plus market share, I think you are getting close. Because Google’s SERP results are displayed due to the complete and absolute discretion of Google, then I believe that is cause for concern. As Nick said, Google is taking the #1 slot with a ton of placement for their own means. Realize there are only roughly 16 slots above the fold on page one of Google. Google has decided that its own content is better than anyone else’s, and has given themselves an unfair advantage. Sure, they created Google, so why not do what they want to do? Well, that works when there is a free market, but when they control 67% of all Search on the web, that is where some transparency needs to be inserted. You asked for examples of where Google has taken a direct role in eliminating competitors. Simply ask Jay Weintrab about how Google black-balled his site. Ask Ethan Ewing over at Bills about his site, we deal with this issue all the time with our SEM Clients. Outside of Search, think about the power that MSN exerts on browsers and OS’s. I’m a libertarian and don’t like regulation, but I do if there lacks transparency in the process.
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What % of leads today derive from Google search? It’s not anywhere near 67%. This is not an abuse of monopolistic power. Just an industry leader adapting their technology to give the consumer a better service than they have today.
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Let’s get serious people. This has NOTHING to do with the consumer experience at all. It’s all about the $$$$$$$$$.
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leadgen101, no doubt – the two are perfectly correlated though.
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No question Leadgen101.
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Even if Google does have an API where Lenders can post rates and they are actual rates, then yes speed can be accomplished.
But transparency to real products actually doesn’t really help the consumer out in the long run, there is no customer profile given (no credit pulled or any of the other factors that are required to underwrite a consumer)…so really it gives no advantage to the consumer whatsoever other than more confusion and false hope.
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i kind of applaud the transparency thing by having a different phone number be given. as the lead gen industry exploits the consumer by reselling info multiple times (usually well over what it initially claims) this could gain an edge and huge selling point for google.
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Like any good public company, Google’s motivation is to build long-term value for its shareholders, and in that light this makes sense. It is far past time for us (as both internet users and people that make a living by using the internet to help people make easier and better decisions) to get past our naive view of Google as a public trust, and see them for what they are – a money-making machine with a focus on the bottom line. The Do No Evil era is over.
My beef with this move is aligned with Andrew’s. The Google brand was built on the back of a great product combined with rampant word-of-mouth, PR and government support. They are now shrewdly using the monopolistic leverage they built through the Do No Evil campaign (remember the founder’s original disdain at the concept of getting paid for clicks – the platform lifted from Overture that they are often credited for?) to generate profits and take advantage of their one great asset, free traffic.
Internet users now need to understand that they are dealing not with the old Google, but with the new Google – the one that no longer simply makes money when you click, but is selling your information directly to advertisers. The challenge to us as online service providers is to enhance our services and value we provide to our users and readers. In doing that we have the opportunity to make it clear to the public that the company they trust to organize and PRIORITIZE the world’s online content to them, is not the company best suited to determine the right mortgage (or TV, insurance plan, vacation package) for their situation. I think we’re up to the challenge.
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