Google’s AdWords paid search product is one of the most valuable tools in a loan officer’s arsenal. Executed properly, search ads can generate mortgage leads more effectively than organic search alone. In fact, it’s estimated that businesses make an average of $2 in revenue for every $1 they spend on AdWords.
Nevertheless, understanding the costs and ROI of loan officer advertising via paid search can be challenging. To understand what lenders should expect from their paid search efforts, NestReady created a “Performance Benchmark Cheat Sheet” that examines the costs of clicks and conversions for paid search in the real estate and finance industries.
Read on to learn how to plan and execute your mortgage lead generation campaigns using Google AdWords.
Paid Search Benchmarks for Real Estate & Finance
According to Wordstream, the average clickthrough rate (CTR) for Google AdWords is around 1.9 percent. Other industry experts agree that advertisers achieve an average CTR of 2 to 3 percent when running a PPC campaign. Loan officers can get even better results, with paid search CTRs of around 3.71 percent for real estate and 2.91 percent for the finance industry.
Costs, meanwhile, are mixed. For instance, the average cost-per-click (CPC) for paid search campaigns on AdWords is below average at $2.30 for real estate keywords and above average at $3.40 for finance keywords. That said, it's not uncommon to see a CPC of $20+ for keywords containing the words “home” or “house”—in fact, bidding on just the word home can result in a CPC of $50 or more.
Finally, loan officers face an uphill battle compared to professionals in other industries when it comes to conversion rates and costs. For instance, the average conversion rate across all industries for AdWords campaigns is around 3.75 percent. Meanwhile, real estate comes in second to last with an average conversion rate of 2.47 percent, while the finance industry lands in the middle of the pack with an average conversion rate of 5.1 percent.
Meanwhile, cost-per-conversion (CPA) for real estate and finance is well above other sectors. For instance, CPA for the real estate industry is $116, more than double the average for all industries. CPA for the finance industry is a bit lower ($81), but remains fairly steep. Except for the technology industry, real estate has a higher cost per conversion than any other industry.
Loan Officer Advertising Through Paid Search Campaigns
Here are some tips for bidding on and building paid search campaigns for loan officer advertising.
- Be mindful of ad rank. When working on paid search campaigns, keep in mind that ad position will have a big impact on click-through rates. For example, first position yields an average CTR of 7 percent, while the second and third positions will drop you to 3 percent and 2 percent, respectively. Ad rank is determined by several factors, including your bid amount, keyword relevance, and the quality of your ad and landing pages.
- Consider your ad’s location. Studies have shown that content placed above the fold is seen 84 percent more often than content below the fold. If you have ads that are running below the fold and are not visible, they can still accumulate impressions, resulting in a negative impact on your ads' CTR.
- Use audience targeting to improve conversions. Clicks are only the first step in a series of events that result in generating mortgage leads. To lower your costs and improve your conversion rates, put audience data and related targeting to work and focus on your core audiences. Combine socio-demographic, behavioral, and interests data to zoom in further on the audiences that tend to have higher conversion rates.
Get the Full Performance Benchmarks Report
To learn more about how to plan and measure the success of your paid search campaigns, be sure to download NestReady’s complete “Performance Benchmark Cheat Sheet” report. It covers average cost-per-click, conversion rates, and more for paid search, display, and native advertising in the real estate and finance industries across the United States. Click here to get your copy of the report.