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Real Estate and Online Advertising

I ran across this chart about top online advertisers, and thought it was kind of interesting in light of events in the real estate market.

Top 10 Online Advertisers

I would assert that several of the top 10 are either directly or tangentially related to the real estate boom.
#2 – Experian – credit reports. Not sure why they spend $44mm advertising something the government says you have to give away for free – but you might be checking your credit score if you were worried about refinancing, no?
#3 – Countrywide – think we all know that one (they’re the guys that keep sending me urgent opportunities to refinance a mortage I paid off 16 months ago) Only question is if they are still in business in six months.
#7 – Low Rate Source – this is a comparative mortage vendor. Not sure they are getting their $22mm worth – because I’d never heard of them.

So what happens to “Web 2.0” and the insane stock market valuations when all the air comes out of refinancing? More interesting collateral damage?

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13 comments:

  1. 1

    Hi deejayoh,

    Experian just happens to be the owner of a company that I blog about quite often. I absolutely can’t stand those deceptive banner ads from lowermybills.com, owned by Experian.

    A mortgage lead generation company, owned by a credit bureau. Now that was a powerful business model. It will be interesting to see how Experian does now that the market has slowed.

    Instead of going down, maybe their revenue will go up, due to desperate mortgage brokers trying like mad to write deals and stay alive.

  2. 2
    deejayoh says:

    Thanks Jillayne!
    I knew there must be some nefarious arm of Experian of which I was not aware, and figured someone here would know about it. Sounds like much (most?) of that advertising is… yup, mortgage driven!

  3. 3
    The Tim says:

    LowerMyBills.com? Hey, I’ve heard of them before. I think you have to fail an IQ test or something to fall for their ads.

  4. 4
    deejayoh says:

    Now it makes sense..
    Looks like spending $44million/month gets you watched on your own blog.

  5. 5
    In Exile or Obsessed says:

    I feel like the mortgage adverts have returned in the last week on yahoo. In the past few weeks the ads have been primarily for face rejuvenation for women, now we’re back to gyrating figures selling mortgages. Wachovia had an enticing ad–that is, I opened it and started to fill it out for 3 seconds….

    I heard that the rates dropped last week to below 6% so I was wondering if this was why–and maybe some promises of the fed bailing out the banks?

  6. 6
    Beth says:

    On a different subject, I found this link on the Mish blog today:

    Fort Lauderdale-based Levitt and Sons halts all work on houses (http://www.sun-sentinel.com/business/sfl-flzlevitt1019nboct19,0,192235.story)

    In other words, this homebuilder is starting the bankruptcy slide. When it happens to one, when some people lose their downpayment and fail to get the nice house they expected because one homebuilder goes out of business, people are going to become even more cautious about buying from the others.

    I expect we’ll start seeing the homebuilders crash and burn over the next year like the mortgage brokers did last year.

  7. 7
    bud says:

    Interactive Corp =
    HomeLoanCenter.com
    LendingTree
    RealEstate.com
    and more

  8. 8

    The small, undercapitalized builders have a tough time in this kind of market. I remember back in the early 1990s when I worked for a title insurance company, I had make sales calls to our builder customers and it was no fun having to visit a small builder and tell him that we could no longer insure the title to his homes because he wasn’t paying his subcontractors (and the title company ended up having to pay the liens.)

    Now that public records are available online, lien recordings would be a good way to track what’s going on with the small to medium size builders here locally.

    Large builders can usually weather the storm.

  9. 9
  10. 10
    softwarengineer says:

    THE ORGANISED CRIME THAT GOT US INTO THIS REAL ESTATE SUBPRIME AND EVEN ARM MESS WANTS US TO BAIL ‘EM OUT

    My guess on the stock market collateral damage from bad mortgage loans is about another -1000 point correction on the DOW.

    Don’t laugh at stock market investors though, that still equates to about an 8-9% annual return on your investment, even after the correction. Those safe and dinky CDs and Money Market funds are still approximately half or less than that [especially after taxes, remember the Bush capital gains tax cut for stocks is still on].

    Laugh at the real estate investors though, they’re making “negative in Seattle” lately.

  11. 11

    NextTag also specializes in those deceptive mortgage ads.

    Usually with NextTag, LendingTree, and Lowermybills.com, the ad displays the initial teaser payment and loan amount information on a pay-option, interest only, negative am, ARM loan. Only when someone has clicked all the way through, past several screens, is the required Truth-in-Lending disclosure information available, in small font, at the bottom of one of the pages.

    The problem is that mortgage brokers purchase these leads, which really undercuts their own ability to advertise honestly. As long as mortgage brokers keep buying the leads, and the FTC is asleep at the wheel, the banner ad companies will keep advertising.

  12. 12
    laxtosnoco says:

    The insane thing about all of these online mortgage ads is that it is still worthless to shop for a mortgage online. After entering a little bit of personal information, you are turned into a sales lead at all of these sites (lendingtree, countrywide, etc.)

    I know that banks/mortgage companies are afraid of sharing their pricing and their product being commoditized, but the writing is already on the wall. The first big player to figure out how to let a consumer actually apply, get pricing, and get approved for a mortgage online would be a big winner.

    The current model is like going to Amazon, picking out an author you like, and being told that a sales representative will can you up with a choice of potential titles. Ridiculous.

  13. 13
    Sara says:

    How do companies like choicea.com survive without any advertising? This is just one of the avenues we used to market our house for sale (Craigslist and other too)…btw, Craigslist doesn’t have advertising either!

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