Middling Costs for Auto Finance Search Marketing, Study Finds

Just be happy you are not marketing home equity loans.

According to an interesting study by The Financial Brand blog, the cost to advertise in conjunction with Google search terms is more expensive for home equity-related searches compared to auto finance-related queries. Auto loan searches, such as "auto loans," cost $0.0404 per thousand searches, compared to $0.2855 per thousand searches of the term "HELOC."

The term "car loan" falls even farther down the pricing list of lending-related search terms, ranking 16th at $0.0128 per thousand searches. By comparison, "student loans" is more expensive at $0.0149 per thousand.

It is interesting to look at Google Adword prices, because you get a keen sense for direct-to-consumer marketing costs, as well as a cursory understanding of which search keywords lending marketers value most or perform the best.

In case you were wondering, "loan" is at the bottom of the pricing list for lending-related search terms. Apparently, such a generic term doesn't convert into apps for lenders.

Tags: Google, SEO, direct-lending, google, marketing, search-engine-optimization

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Comment by Brian Reed on September 7, 2010 at 1:28pm: To really understand your marketing cost you need to look at the conversion funnel as a click turns into a page view, that turns into an application, that turns into an approval, that turns into a funded loan. The conversion rate is a function of the User Interface, overall service, underwriting, and pricing. Some words attract better quality customers from a credit perspective than other words. SEM is really the combination of being very analytical while understanding the factors that can increase your conversion rate at each stage of the funnel. The bottom line is that your market cost per loan needs to be appropriate for the overall economics of the loan that you are putting on the books. IF you are a bank with an approval process that is not customer friendly and slow, you should most likely stay out of SEM.

Comment by JJ Hornblass on September 7, 2010 at 4:55pm: Brian, excellent points. Yes, the pricing is just one input in the calculation of overall SEM profitability.