Nearly 97% of Google’s revenue comes from advertising. In the United States, 41% of all online advertising dollars go to Google and I suspect the number is similar for Canadian advertising.
If you are an independent mortgage broker who is advertising on Google Adwords you are throwing your money away! Here’s why,
First a little background on Google AdWords for those that aren’t familiar with it. Google Adwords is a dynamic, auction-based marketplace where advertisers bid on keywords and therefor compete for top ad placement within Google searches and on publishers websites through Google Adsense ads. The minimum bid per keyword is 5 cents, but in highly competitive categories like mortgages, Google can make upwards of $50 per click.
Have you ever wondered which keywords are the most expensive with Google AdWords?
The Infographic below shows the “Top 20 Most Expensive Keywords in Google Adwords” and it doesn’t take someone with a marketing degree to realize that mortgage and loan related searches are going to cost you a small fortune if you want to be competitive and have your ads show up.
Why do I think mortgage brokers are wasting their money on Google Adwords?
First and foremost I don’t think most mortgage brokers who are advertising on Google Adwords are looking at their competition correctly. A quick Google search of mortgage related search terms mostly shows the top ranking ads are coming from the Big 5 Banks. I can guarantee you that their marketing budgets are WAY larger than any mortgage broker I know. So right off the bat you are fighting an uphill battle to spend more money on ads just to show up in the top Adwords placements.
Mortgage brokers can’t compete with the Big Banks through traditional marketing so it’s ludicrous to think it can be done with online advertising.
Mortgage brokers need to be aware of what the type of client they are marketing to. If you are marketing to online clients the chances of converting them to an actual client is very slim. You need to give them a compelling reason to first stay on your site and second contact you for more info.
I can’t tell you how many times I have seen mortgage brokers advertising on Google Adwords only to be directing them to a generic company website that provides no value or call to action. Mortgage brokers need to spend more time and money on their web presence to make the clients actually stick around once they get there. This isn’t done by using your brokerages stock templates that rehashes the same content that every other mortgage broker uses at your company.
CMHC reports that, new home buyers take on average 11 months to make their first purchase. That give people a lot of time to research their mortgage options and it should be no surprise that they are doing it online. You should be spending your money not on Google Adwords but on a website with content that differentiates, educates and provides more of a value proposition than your competitor.
The best source of business comes from referrals
I suspect that many of the mortgage broker ads I see on Google Adwords are coming from brokers that are new to the business. When people start in a new business they’ll typically look for any route that will bring them leads.
Online leads aren’t what you should be going after. Instead, invest your time and money on building offline relationships and working with your referral sources you already have in place and at the same time build your online website presence with quality information for those people to refer back to. You can be guaranteed that every person who receives your business card looks at your website. This is the perfect opportunity for you to make something that stands out above the rest.
It shouldn’t take you long to figure out the best source of new business comes from past clients and referral sources. Not, unqualified internet leads.
In the end you want to be the person somebody refers, not the person someone randomly searches. Strive to be above Google.