As Facebook becomes more and more popular as an advertising tool, less traditional companies are taking notice. We receive many inquiries from Mortgage Brokers about Facebook ads in large part because we have published quite a bit of content about Facebook Ads and Realtors.
In this post, however, we want to share part of a case study about a Mortgage Broker client and how Facebook worked for him to deliver leads and an amazing cost per lead.
A mortgage broker came to us because he had read about some of our prior work with Facebook ads for Realtors, and thought it would work for him as well but he was not sure how. We told him we should start running ads to his specific target audience in his geographic area about applying for a mortgage loan. He was a bit wary about it, but agreed, and gave us a landing page on his website to send the traffic generated by the ad.
The landing page had very long copy.
However, studies show that long copy, especially for landing pages with more complex offerings is important. You should address the benefits, the concerns, the value, your unique selling proposition, and a call to action. Many of the important direct response elements were on this page and he wanted to send traffic from Facebook to this page where visitors could then have an opportunity to submit their contact information in order to learn more about the program. Below is the pop-up contact form that he had on the landing page.
Stay with me here...
However, we wanted to show him the power of Facebook Lead Ads. “The difference is,” we explained, “that Facebook Lead Ads don’t send the traffic to a website landing page, instead, they capture the lead right there within Facebook.”
Lead Ads are extremely effective because they reduce the amount of effort a potential prospect has to do in order to “take the next step”. This is because Facebook pre-fills the form in the ad with the information that the user has already given to Facebook - such as phone number, email, name, etc.
So effectively, people only have to tap the submit button - the form is filled out for them by Facebook; this is important as well when you consider that the majority of people are now operating on a mobile device and filling out a form on a landing page is difficult versus with a pre-filled Lead Ad. And when an offer is good and the target audience selection is right, lead ads work great.
Here's one of his Facebook ads:
Here's the first view of the Lead Ad when someone clicks "Sign Up" - we're pre-qualifying very specific prospects in this ad. Pre-qualifying leads is important and what makes this so powerful - keep in mind, your cost per lead will vary higher or lower depending on how specific you're getting (more specific and targeted often leads to higher costs per lead as the potential audience size shrinks - this case was very targeted in small geo area).
And here's what it can look like when they click "I Qualify, Now What?" - you do have options in terms of what fields/data you are collecting from a prospect as well (the number of fields you ask for will also affect your cost per lead - the more you ask for the lower your conversion rate and higher cost per lead):
So we started running the 2 campaigns at the same time to compare results:
- A traditional Traffic campaign was set up to send users to the landing page on the client's website (side note: there are more than 10 different campaign objectives in Facebook. There is a more effective replacement to Traffic campaigns now - View Content with Conversion. Also, most people are aware of Boost Posts which are not a good option to choose)
- Lead Ad campaign was set up to capture leads right within Facebook
The ads and the target audience were identical in both campaign objectives.
Campaign Results For Traffic and Lead Generation
These were the results for the first 4 days of the campaigns:
During the first few days, the “winner” campaign in terms of reach and impressions was clearly the Traffic campaign (Conversion with View Content is a more effective option versus Traffic. Do not use Traffic unless you cannot avoid it) – over 4,400 people reached (Reach is defined as the number of unique people that the ad was shown to) with the traffic campaign versus only about 1,500 for the Lead Ad campaign.
Then we looked at Unique Link Clicks and CPC (cost per link click). Again, the winner was the Traffic campaign.
The traffic campaign was taking people to the website for only $0.41 cents per click! Pretty amazing price for a click and we had taken 96 people to the site for only about $45 dollars.
The Lead campaign was way behind with a cost per link of $2.13 and only had taken 19 people to the site (keep in mind a Lead Ad campaign is not designed to drive people into a landing page). Traffic campaigns are the most common campaigns (after boosting posts) and yet, are very often the wrong campaign objective to use.
The KPIs (Key Performance Indicators) of a traffic campaign often look great compared to even a Google Adwords campaign. When clients see these KPI’s, generally they are very happy and impressed with Facebook’s ability to deliver traffic for such low cost. But herein is the importance of really looking at what you’re trying to with an ad campaign.
At the end of the day, will visits to the site suffice??
Or do you want to make a sale?
Here's the rest of the campaign Results:
- For a Traffic campaign, Results are measured in clicks. For this campaign, the results were 109 clicks. However, even though there is a Contact Me button on the landing page on the website, the client received NO inquiries from the landing page
- The Lead campaign is measured in Leads. These were people that filled out a form with their information (name, phone number, and email) and requested to be contacted about more information about the first-time buyers plan. With about $45 dollars in ad spend, the client received 4 leads
With this data, we convinced the client that a traffic campaign was not the way to go. He paused the campaign after a week and moved all the budget to the Lead Ad campaign.
At the end of one month with a very narrow target audience, we had 34 qualified leads:
Names, numbers, and emails of first-time buyers wanting to be contacted regarding the first time home mortgage. The cost per lead: $22 on average with approximately $700 in ad spend in one month.
Keep reading below for lower cost per lead.
Lowering The Cost Per Mortgage Lead
There are many factors which affect your cost per lead, some of which I eluded to earlier. The above case was a very narrow population and very targeted which can create higher cost per lead. We have also lowered mortgage leads down to low single digits:
Factors that will affect your overall cost per lead are:
- Your offer - providing something people can get excited about will have a direct impact on the response to your ads
- Your ad copy - are you writing effective direct response marketing copy?
- The number of fields of information you ask for - form fills decrease with the more information you ask for (i.e. asking ONLY for email versus email + phone + address will have have very different cost per lead results)
- The size of your target audience in Facebook - determined by:
- The population in the geographic area you're targeting (larger populations allow Facebook more opportunities to find the ideal prospects)
- Targeting within Facebook - what interests, demographics and behaviors are you layering on. Keeping audience size larger or as large as possible is the best strategy as it allows the Facebook algorithm more room to find the ideal candidates.
Why did Lead Ads work?
The success of this campaign was due to several factors:
- Value proposition: The ads focused on the message “buy your first home” and showed in the images people in the target market with moving boxes and in empty homes as if looking at homes with a realtor
- The Offer: The ads successfully conveyed that this mortgage product was a “deal” that not every lender could offer. It offered specific savings (worded “save up to”)
- Urgency: The ad indicated that this program was limited and only valid for people who qualified
- Call to action: The call to action button said: “Tell me if I qualify?”
- The Campaign Objective: Lead Ads were key to the success because it eliminated the extra steps to contact the lender.
What else can be done to improve Facebook ad results?
There are other areas that can be tested that could further optimize the campaign.
For example, the ad message. Here are some examples:
- “Interest rates are at the lowest, find out how much you qualify for.”
- “Did you know Renting is more expensive than Buying? You qualify for more than you think.”
- “Save up to $___ with our exclusive loan program for people in the [city] area”
Remarketing/Retargeting: Remarketing is another tool that can be used to further optimize the ads. You can remarket to those people that clicked on the ad, but did not submit the form - we've seen this work very well. Or you can remarket to those people that visited the site but did not fill out a form there either.
Campaign Planning: Planning out campaigns allows you to stay organized and align your objectives more effectively. In the screenshot below, you see our mortgage campaign planning guide in Excel - you can download it. There are 3 sheets/tabs in the planner.
Testing other target audiences is possible as well. The key is to find a loan product and make it specific for a certain group of people. Remember, a good ad includes these principles:
- Value proposition
- Urgency and scarcity
- Call to Action
And when trying Facebook Ads, remember the objective: Boosting posts will get you social butterflies to share or like your ad, Traffic ads will bring people to your website, Lead Ads will get you LEADS (related post here on Facebook ads vs Boost Posts and why you should run Facebook ads).
We encourage comments on the post in the below comment section - if you thought this was helpful, or just have questions, please post below.