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February 20, 2008
Mortgage Mortgage and Mortgage Ads: Still Cheerfully Uncorrelated
Every time I think mortgage ad spending can't stay uncorrelated with mortgage markets much longer, it does. When the relationship finally breaks, which it eventually will, the consequences for Google, et al., aren't pleasant, given that financial services sector remains far and away the biggest spender on online ads.
Mortgage companies spent nearly $409 million on ads in the third quarter of last year, the most recent period for which data are available, more than the industry's ad spending during the peak of the housing boom, according to TNS Media Intelligence.
[via IHT]
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Paul, this data is 3Q07, thats way lagged. I wouldn't worry about your thesis, though I think you might even see a spike in 4q for one quarter as they try to lure in more people with marketing.
Yup, previously posted a note showing that mortgage firms hadn't lost their ardor in Q4 2007. Just the IHT article was the most recent TMS data that I had seen.
This something I wrote about back in 2005:
http://gotads.blogspot.com/2005/05/is-google-too-dependent-on-mortgages.html
But your own posts this morning might help explain. Perhaps mortgage marketers simply devote the appropriate amount of their budget to the online market.
Their focus on performance has led them to a percentage spend that's internet heavy, cause it works. They may be years ahead of brand and other marketers in this regard, and that's why their doesn't seem to be a correlation.
Another point: mortgage sourcing just has a ton of profit built into it. That's why they can keep spending - each transaction is worth a lot. Maybe that will change someday too?