Google Taking Over Lead Generation – Bad News for PPC and SEO
By Alan on Mar 20, 2010 in Domain Development
Ask anyone using the Google Adwords program and you will quickly find many people building businesses around the success of their PPC campaigns however unlike how Rome wasn’t built in a day Google can crush you overnight.
The latest change to the Google search results for mortgage related terms such as “mortgage rates”, “mortgage calculator”, “mortgage loan” and more show Google comparison ads in the #1 spot. From the dozen or terms I searched for Google is # 1 across the board.
Not only does this Google self serving ad bump out 1 of the 3 available positions usually available above the organic search results (btw where can I can get a radio button and 4 lines of text for a Google ad!) but it really kills lead generation in the mortgage industry unless you are a company willing to provide rates, a good faith estimate, APR information and more (see results below)
Most lead companies generate leads through forms and usually come with a small disclosure reagrding APR and fees should it be required however posting this information online with what seems to be a required phone number also (if these ads are in fact available through the adwords platform at all) then its much more transparency than most people want to share. In fact, when requesting multiple quotes this is not information you can provide becuase a lead generator is matching clients to providers – not usually offering or publishing offered rates. Of course, the battle for the # 2 ad spot (really # 3) still exists however having Google take over enough space for both the first and second ad this should really bring down many CTR’s for mortgage related terms.
The New York Times wrote about this back in September involving a lawsuit file by LendingTree with regards to the technology Google is using behind the mortgage comparison service.
For domainers this doesn’t mean much since many have not purchased a single PPC ad however for developers who built out PPC campaigns based on historical click thru and conversation rates it may be time to start modifying your business plan … again.
Francois | Mar 20, 2010 | Reply
Hehe this is what I was afraid 4 years ago when I still was in the lead business, that one day Google enter in the game!
This unfair competition may lead to a disaster… most companies who rely on lead generation will finish closing their doors.
And the worst is behind this industry there are thousands SEO companies, marketers, web designers, …
I think lead generation it’s by far the industry buying the more advertising.
Myself I had a monthly online advertising budget of $150K+ and my lead generation business was 10 times lower than the leader in his vertical, and it was not financial leads (just you imagine).
So in the long run domainers should strongly be affected by these ad cuts.
Many people must be feeling very uncomfortable and unsure about their future…
Troy | Mar 20, 2010 | Reply
I also saw the writing on the wall for this and like Francois decided to find another way to make some money. I just figured that one day Google would say to itself, “Why are we sending all this traffic to other websites and making them a ton of money when instead we could have our own services up there that we send them too?” I also see this as being the begining of the end for Google’s influence in the SE field. People like them because of their good results, if Google starts manipulating the results to put sites owned by them on the top, and putting their ads on the top, then it is only a matter of time until a new, slim, and efficient competitor shows up and takes a huge chunk of their pie.
Troy
chandan | Mar 20, 2010 | Reply
their motto is dont be evil
lol
Make Revenue Online | Mar 20, 2010 | Reply
Interesting,
do you guys still see google in the # 1 position
i tried those search terms on Google.com, and Google ads are nowhere to be seen ???
>> “I just figured that one day Google would say to itself, “Why are we sending all this traffic to other websites and making them a ton of money when instead we could have our own services up there that we send them too?”
are you sure that this is what google is thinking? If this was true, then why isn’t the government say to itself why are we sending all these customers on our land to private companies when we could unprivatize them and start collecting all of the revenue instead of just a percentage through taxes.
Troy | Mar 20, 2010 | Reply
“are you sure that this is what google is thinking?”
Absolutely, as long as they continue to lead generation on their own instead of sending the traffic to others then there could be nothing else they could be saying.
I couldn’t find an example like Alan was talking about either but the screeshots seem pretty clear that Google did do this at least once=)
Alan | Mar 20, 2010 | Reply
Lets not confuse what Google is doing here with what would seem to be against their famous “Do no evil” Mantra
I think Google has an ability here to make a powerful difference to both consumers and publishers for lead generation however the implementation is all wrong.
Before you read – understand I am saying the introduction of this new feature is evil but it could be done where everybody benefits more.
Simple is better and Google knows this however taking the top ad spot (which is the size of the top 2) while surely not decreasing any advertisers CPC imo is just bad business and surely some kind of breach of competition laws due to its near monopoly of the search market but one would have to read the terms and conditions of the Google Adwords program to know if this is allowed or not or consult with an anti-trust attorney about federal laws. As an advertiser its still opt-in to these ads whether we like it or not.
Publishers will suffer for a number of reasons.
One, typical growth happens when advertisers build business models around successful campaigns believing the provider will not compete with them. When they do and simply knock out ads which represent a large portion of the clicks advertisers previously received many business models will take a hit. This happens time after time with Google – remember, the quality score fiasco in 2006?
However, this does not have to be the case. If Google allowed advertisers a dedicated section for such popular categories such as mortgage, insurance etc… (and drove traffic in the same way as they are here) Adwords customers could compete on these dedicated pages and it would be win for win everyone including consumers and publishers.
The way it is now simply stinks …. See link
Ex = https://www.google.com/comparisonads/mortgages?schema=refinance&q=mortgage%20rates&src=f#ti=0
The biggest mistake Google is making (and which might ultimately cause a ton of turmoil in this industry) is the introduction of interest rates, APR’s, good faith estimates, toll free phone numbers and more. How is this information determined? Who can advertise here? Just mortgage lenders with real toll free numbers? What’s the cost? Is Google participating in a revenue sharing model like lending tree who takes around 20% of a loan commission plus a per lead fee? Is this simply a directory of rates like bankrate.com or is the model actually a go after the LendingTree and e-loans of the world?
What about publishers? If you do not publish rates or more of a lowermybills.com model do you simply become excluded from this directory? I would think so by the current look. In addition, Google is actually hosting the lead forms and collecting all the consumer information before passing it on. So essentially you give your information to Google then Google shares it with the mortgage company. Many times publishers do not do this but rather host forms directly served by the mortgage company.
It would be great to see Google have dedicated pages for many industries but the ability to compete for these ads should be the same as they are now.
In theory this is the natural evolution of search however in practice I fear Google is getting too greedy for their own good.
Advertisers like LendingTree, LowerMyBills.com, E-Loan.com and more have contributed for a large – well, incredibly substanial – chunk of advertising revenues over the years.
Francois stated his budget was $150,000 a month (not in finance) at one point. I can attest – our budget was somewhere around $125,000 a month. In fact, on the single term “real estate” we had a campaign which received over 10 million clicks throughout the heydays of real estate but as Francois said these budgets were nothing compared to those of companies like LendingTree.
I will say Google is making the form simpler to create a better experience for the consumer but many of the 2 step forms you see on mortgage sites are simplified only to the extent where they do not compromise quality. Google’s form is too short and will most likely provide lower quality leads than those of the forms say on mortgageloan.com (LendingTree requires a SSN and is a different animal for leads than most lead generators)
Lower quality leads will mean a poorer end experience for the consumer. Sure, filling out the form will be easier but speaking to a lender about the exact loan you need with just a handful of questions – sorry, its not as quality as you think. Leads need to be weeded out a little more than the current form they have here.
Now look more into the actual information collection of this new twist by Google
htttp://www.google.com/support/websearch/bin/answer.py?hl=en&answer=153884
The link above shows how the process works in Google’s words
“” Call the lender — simply dial the phone number listed on the right side of the page. Keep in mind that this number is only effective for 30 days “”
—————————–
30 days … so, maybe these placements are purchased on a monthly basis?
—————————–
“When you call the number listed for a lender, you’re actually calling a special Google phone number. Google instantly forwards your call to the lender so your phone number remains confidential. The lender won’t get your phone number unless you choose to share it with the lender during the call. Similarly, when you fill out a form to request more information, the phone number you provide is never shared with the lender. Instead, Google provides the lender with a special number they can call to be connected to your phone.”"
We will see a shake up here if Google continues this intrusion in to high valued mortgage ads for any period of time.
Good news imo is your keyword domains will be more important than ever for organic search since Adwords will become less effective and of course, domains with traffic will continue to rise in value due to advertisers looking to secure more ways away from Adwords to lock down traffic.
Benjamin Arie | Mar 20, 2010 | Reply
“This is unfair”
Oh, cry me a river. Really? Google changing the way THEIR results work on THEIR search engine that YOU have built your entire marketing strategy on is “unfair?”
Sorry, but give me a break. You can whine, or you can adapt and overcome. Google has made many, many people wealthy. They started in a garage. They owe you nothing. You can’t be a winner if you’re a whiner, wiener.
Alan | Mar 20, 2010 | Reply
Benjamin,
idiotic response. Nobody is whining but posing questions to what this will do to existing business models. Trying to have an intelligent conversation about but this but hey – thanks for your community college dropout point of view.
Whatever -
consolidate.tv | Mar 21, 2010 | Reply
Alan thank you for the excellent and original post. Refreshing not the same old Xyz sold for $xx,xxx.
Ritz | Mar 21, 2010 | Reply
It’s time we all shift to using
http://www.HitWiser.com !
Direct Navigation baby!
Google is too dangerously powerful..
and will show us results that THEY want to show.
remember that chap from poland who spent a fortune in SEO to be ranked number 1 on google..
he eventually was.. but that didn’t bring him any additional business..
it’s then he realised that , YES, he was Number 1, BUT just in Poland and on the 5th of 6th page, in the US..
I like Google,.. but less and less as I grow wiser..HIT.
expensive domain | Mar 21, 2010 | Reply
Alan, you have the balls to post this because Google will read this and bump your blog down the SERPs since you’ve betrayed them but exposing their plan to dominate the world.
On a more serious note, Google’s algo changed so much over the years I wouldn’t be surprised that you wouldn’t see their results in a few days.
joseph slabaugh | Mar 21, 2010 | Reply
TEST!!! This is the 3rd time I am trying to post here!
fakhrime | Mar 21, 2010 | Reply
thank’s alan,
i’ve learn much from this site.
@expensive domain
sure?did the google has algorithms to make a search result?
i don’t agree with you because it’s ‘hard’ if they still doing ‘manually’.
Gary Taylor | Mar 21, 2010 | Reply
I don’t think business models need to change at all and in fact I think Google could possibly be making things better for us. I for one would love to see a more interactive type of PPC advert which would increase conversions.
Has anyone stopped to think that Google may just be testing a new type of ad that mortgage/finance companies could use?
Worry over nothing
joseph slabaugh | Mar 21, 2010 | Reply
As a domainer I also made websites, but then I also made youtube videos, and now I am a youtube partner, and make money from adsense from the few 100,000 views/ad impressions I have monthly, mostly from Google.
I could see Google offering this as a service to publishers, to sell leads and them taking a cut of the revenue, just like with PPC.
Wayne | Mar 21, 2010 | Reply
I think Gary Is right google is just trying something different but as with everything they do we have to change and adapt or wither and die unfortunately google is the only game in town.
Mike | Mar 22, 2010 | Reply
Alan, if google were to adhere to its “do no evil” mantra, then we would be seeing the LYING advertisements that we see. You know the ones:
- Teeth Whitening Secret (almost always discovered by someone in your own home town!)
- Flat Belly Secret (another secret usually invented by someone in your home town)
- How Obama, of all people, wants YOU to go back to school. As if.
- lets not forget the tons of lies surrounding how you dont have to pay back your credit cards.
Please. Google is way way far away from being that good neighbor..
sacramento seo | Mar 25, 2010 | Reply
So you know you need to get your website on page one of Google to get more business, but how do you choose an effective SEO company that won’t take your money and deliver no results?
Mylocator | May 22, 2010 | Reply
Is this double dipping?
Jonathan | May 31, 2010 | Reply
Think the keyword is as important as ever, if you are lucky enough to have a group then syndicate them. The technology will still fall back on linguistics, core communication cultural change takes longer. Toooo late to change the model dot com dot county code earning $$$ trusted brand names $$$$ Google will mess with that at it’s peril. Google is an auction house selling others peoples goods they will not cross the manufacturing line.
Chirag | Jun 13, 2010 | Reply
In theory this is the natural evolution of search however in practice I fear Google is getting too greedy for their own good.
Chirag | Jun 20, 2010 | Reply
if Google starts manipulating the results to put sites owned by them on the top, and putting their ads on the top, then it is only a matter of time until a new, slim, and efficient competitor shows up and takes a huge chunk of their pie.
Chirag | Jun 20, 2010 | Reply
This unfair competition may lead to a disaster… most companies who rely on lead generation will finish closing their doors.
anony | Jun 25, 2010 | Reply
I think it is funny how google stated “using only a few keyword entries” what they failed to mention was those few keywords “refinance” “mortgage” “mortgage rates” probably account for 90% of the search entries for people looking for a mortgage. Search engines are an amazing sales model. anyone know how to program a search engine? this is the modern version of having a monopoly on the steel business in the 1880′s
Long Beach Domain Name Registration | Jul 14, 2010 | Reply
Jonathan is on target – “Think the keyword is as important as ever, The technology will still fall back on linguistics, trusted brand names $$$$ Google will mess with that at it’s peril. Google is an auction house selling others peoples goods they will not cross the manufacturing line.” Everybody must adapt, if Google puts what they want, and it’s not what the searcher is searching for than the searcher will become numb to that strategy, searchers bye bye = bye bye Google.