Google Launches Own Mortgage Lead Generation Effort

First spotted today by search engine bloggers here, here and here Google is testing a new product (in the UK), called Google Merchant Search, which seems to offer lead generation for financial services directly. The system blends a varation of the click to call product they have previously tested, with a comparison rate-table offering most similar to Bankrate.com. Interestingly it does not include (but clearly could include) the qualification form approach of traditional mortgage lead generation, as practiced by companies like Nextag or LendingTree.

The click to call program works a little differently than expected by offering consumers a contact-me form, utilizing Google's technology to connect a call between lender and consumer not immediately, but seemly at a later time when the lender is prepared, yet anonymously, without passing on caller-id info to the lender.

LendingTree Affiliate Program

Word is out that the LendingTree affiliate program has been resurrected.

LendingTree Affiliate Program To be Shut Down

LendingTree Affiliate Program participants got the below email today announcing (for most) an end of the CJ Affiate program. Although the email states that the program's cancellation may be temporary it speaks volumes about the current status of the mortgage lead marketplace: Strong consumer demand matched with tepid lender appetite.

Dear Publishers,
Due to the recent Federal Reserve rate reduction
announcements, the mortgage market has dramatically changed and a surge in the
volume of mortgage requests have caused LendingTree to reach its capacity.
As a result of this change, the LendingTree affiliate program will continue to
exist as an “invitation only” program. This means we will be contacting specific
affiliates to remain in the program. Unless you are personally contacted,
your LendingTree account will expire on February 13, 2008.
We hope to welcome you back into the program in the coming months once market conditions improve. Thank you for working diligently to promote the LendingTree brand and I hope you will consider LendingTree again.

Meanwhile, as of today LeadMarketWatch shows LendingTree having one of the worst conversion rates. For certain, at a 5.69% average 30 day application rate, LendingTree network lenders can't be making much money. Blame affiliates? Outpacing LendingTree are short-form affiliate fueled vendors such as LeadPoint, LowerMyBills and Quinstreet. Blame market conditions? LeadMarketWatch data shows only the individual conversion rates on leads sold to lenders, and in a refinance fueled market conversion rates should be shooting upwards, not drifting down. Something is wrong at LendingTree. One can hope that with Lebda back keeping shop, there is a plan behind all of this.

LendingTree Changes Mortgage Lead Prices paid to Affiliates

For a while now, LendingTree has been the best value for any marketer able to generate purchase mortgage lead traffic. As of yesterday, that's changed, with the below email sent out to active Commission Junction affiliates(links disabled) informing them that leads will now be classified into 4 different groups with very different payout rates. Most significantly, there is no explanation of exactly what the business rules are which LendingTree will use to classify leads into one of the 4 groups.

Affiliate Group Pricing Announcement

Action Needed!

The LendingTree affiliate program is introducing new CPA pricing that will allow affiliates to earn higher commissions. To start taking advantage of this new opportunity log into your CJ.com account today and accept the offer in your “pending offers” tab.

* If you do not accept the new terms within 7 days you will be automatically removed from the LendingTree program.* CLICK HERE NOW TO ACCEPT THE OFFER

The new pricing is as follows:

Refinance	Home Equity	Home Equity Purchase
Group 4: $80.00	Group 4: $75.00	Group 4: $70.00
Group 3: $60.00	Group 3: $35.00	Group 3: $35.00
Group 2: $35.00	Group 2: $15.00	Group 2: $5.00
Group 1: $20.00	Group 1: $8.00	Group 1: $1.00

Below is further information regarding the new pricing. If you have additional questions don’t hesitate to email us at affiliates(at)lendingtree.com.

Frequently Asked Questions:

1. Is this pricing available for a limited time or is it permanent?

This is not a promotion. This pricing is now the new default pricing for the LendingTree affiliate program.

2. How are the groups defined? How can I adapt my marketing efforts to the higher groups?

The groups relate to how generally desirable the consumers are to mortgage lenders. The more desirable consumers are more likely to be in group 4. We suggest that you keep informed on the current industry trends and market conditions to be able to understand the various factors of consumer desirability.
Suggested web sites:
http://news.google.com/news?q=mortgage+news

http://www.mortgagebankers.org/NewsandMedia/IndustryNews

Once you have accepted the offer you will see your volume by group and the corresponding CPA. At that time you can determine if you need to make any campaign optimization changes to maximize your earnings.

To track your marketing efforts we suggest using SID tracking. SID is a field available when pulling a link from CJ. Paid search affiliates have found this tool to be extremely useful when determining ROI by keywords. For complete instructions on using SID, click here for details.

3. What if I don’t accept the new pending offer in my CJ account?

If you do not accept the new offer, your LendingTree affiliation will expire on the date shown in your account. When your affiliation expires with LendingTree, your links will continue to work, but you will not receive credit for any sales that result after the expiration date. Remove any LendingTree links from your pages before the expiration date to avoid losing credit for sales sent after your affiliation has expired. This only applies to your LendingTree program affiliation and doesn’t affect other merchant programs in your CJ account.

To avoid interruption to your LendingTree affiliation, accept the new terms before the expiration date.

Thank you for participating in the LendingTree affiliate program. We look forward to continued growth and your earnings success.

Any thoughts? I would be interested to hear from any active LendingTree affiliate about the relative impact of these changes to your overall earnings.

LendingTree Re-Invents Itself. Sort of.

My former boss once told me that - when confronted with the need for drastic, fundamental change in his business - he'd ask himself "what would my successor do?"

Doug Lebda's latest successors, CD Davies and Bob Harris, are making some changes. But no worries for Doug, its not too drastic. It doesn't throw out the lead-aggregation, lenders compete, you win model which Doug helped to invent, which I've argued has had its day.

Bill Rice was there, this week, at LendingTree's 2007 Partner Summit. He shares with us LendingTree's new emphasis their commitment to three fundamental initiatives: 1. Positive customer experience, 2. Higher quality inquiries, 3. Repeat customers and promoters. What struck me about his summary was that there was no indication of what specifically was going to change with their business model to cause these things to happen.

LeadCritic, posted earlier this month that LendingTree is rumored to substantially raise their prices. Even more interesting than the actual post is the discussion in the comments that ensues.

Other than mission statement goals, what is LendingTree really changing about the customer's experience shopping for a mortgage online?

Washington Post: Folly of Mortgage Lead Generation Exposed

The Washington Post just published this must read piece exposing just how off-base the existing mortgage lead generation model is. Below screen shot is, ironically, of the very article I am referring to, including advertising hum-dingers like:

-Refinance Rates as Low as 2.9% - FREE QUOTES
-$300,000 Mortgage for $965 a month. Refinance and Save $1000s

The pay-option ARM, teaser rate and bad credit call to action copy persist everywhere. Despite the new reality we are in, this marketing saunters across our screens like the Emperor's New Clothes.

As any lender would attest, the product available currently is significantly askew from the demand. Consumers, desperate to find solution to their hardship, will act in mass to these promises, only to be disappointed. Although there is much pressure on Government programs to expand their offering, they can currently only benefit borrowers with moderate to low loan amounts.

For a good part of the foreseeable future, there will be a class of borrowers who desperately need new financing, feel entitled to financing, and who will not qualify for financing. The size of the class is scary, and with a credit crunch removing the product for most of these folks, if the data is correct and things don't improve, we may have impact akin to a financial tsunami. The below excerpt and chart (in $ billions) is from Investor's Insight:

"Bernanke told Congress last month that the housing swoon 'will likely continue to weigh on economic growth over coming quarters, although the magnitude of the drag on growth should diminish over time.'"

But it will take longer than you might think for that negative influence to decrease. Let's take a look at the following table. This shows the amount of adjustable rate mortgages that reset each month for the first half of this year and will reset for the next 18 months. Note that these reset numbers are a driving factor in the increasing rise in foreclosures. Pay attention to the numbers I highlight in red for January through June of 2008. The largest portion of mortgage resets is not until next year.

The advertising, is adding insult to injury.