Online Ads Build Mortgage Awareness

Online Ads Build Mortgage Awareness

JULY 19, 2007

But are some ads sending the wrong message?

Only one-third of US adults find mortgage ads and marketing credible, according to a Harris Interactive online poll conducted in May 2007.

That means that two-thirds of the 2,383 online adults polled
thought mortgage ads were incredible — and not in a good way. One in
five respondents actually thought that mortgage ads were "not at all
credible."

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Sanford Brumley of Harris said, "Given the large proportion of
consumers who are riding the fence, now more than ever would be a good
time for these institutions to examine their mortgage product
advertising and marketing messages."


Although most respondents had a low opinion of mortgages in
general, 71% were favorably inclined toward fixed-rate mortgages. More
than half of respondents also thought highly of home equity loans.

Consumers generally had high levels of awareness and knowledge
about mortgage options, but product ownership rates were low. Over half
of consumers did not have mortgages at all, while a third had
traditional fixed-rate mortgages and 16% had home equity loans. The
ownership rate of all other product types was under 10%.

The dearth of mortgage product ownership is not for lack of online ad spending.

The top 25 mortgage companies ranked by advertising spending are
throwing money at display ads. Online display advertising grew 66.9% in
2006, to $222 million, compared with $133.1 million in 2005, according
to TNS Global data provided to American Banker. At the same time, overall ad spending by this group increased just 7.6%, to $732 million in 2006.

Mortgage applications typically are complex and time-consuming.
This explains why online mortgage application growth has largely been
stagnant over the past several years, according to eBrain Market Research‘s "2005/2006 National Technology Readiness Survey."

Even consumers who are willing to go through page after page of
questions online still must trust the mortgage provider’s security
measures.

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eMarketer Senior Analyst Lisa E. Phillips said, "Advertising builds
awareness, but in this market it doesn’t translate into credibility
necessarily."

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