3 Reasons Google Ads Sh*t on Facebook Ads for Mortgage Lead Generation

I've been generating mortgage leads on Google for close to 2 years now. When I first started, I had just transitioned from working for a big bank to a smaller lender that paid about 3x the compensation per loan, but I had to bring all of the business in for myself. I had no idea the difficulty that would bring with it for a guy who didn't like cold calling or coffee meetings and had a family to feed as well. 

At the time, I hadn't tapped into the power of social media for self-growth AT ALL. I felt like I was on an island trying to figure out this internet lead generation thing, and I'll tell you what, it's a good thing I did. See, at the same time as I was trying to figure out internet lead generation, there was a large group of Loan Officers across the country working on the same thing. Here's the difference though: they were all on Facebook, while I was trying to figure out Google Adwords (now Google Ads). I had tried Facebook ads and the concept of trying to interrupt people as they scrolled through their news feed was just so strange to me vs tapping into the existing network of people searching for mortgage loans online.

I really questioned my path when I saw loan officers on Facebook generating $2-3 leads. Afterall, at the time my leads from Google were costing about $12 a lead. I never stopped generating leads because I knew Zillow and LendingTree were selling the same leads I was getting for $30-40+ per lead. At the same time though, I decided to continue to try my way at Facebook leads thinking there was no way that paying 4-5x what people paid on Facebook was worth it. However, after trying my way at Facebook Ads again, and getting to the point where I was generating leads on Facebook for $3-5 a lead, I realized something. These leads were complete garbage, and those that were successful were either finding the needle in the haystack and working a lot to do it (even after automating the initial follow up of the lead), or they were just nurturing the leads long enough that they eventually converted and the LO could say they got their money's worth. Here's the thing: the latter mentioned strategy could be fruitful if you ran the same strategy with pages out of aphone book. 

Fast forward and within 12 months of getting my license and going out on my own, I had made over $120k, 95% purchase, with 70% of my total business coming from online leads, 10% from my circle/sphere, and another 20% from agents I had either sent leads to or sent pre-qualified buyers to. The most I ever spent on ads during this time period was $2k in a month, and that was really only my last 3-4 months. Meanwhile, lenders who were all in on Facebook ads began talking about diversifying, getting out of the business altogether, or pulling back the curtain and showing that the majority of the benefit of generating Facebook leads is being able to show them and send them to real estate agents, even though they knew the quality was crap.

So here I am today, and while there are hundreds of LOs that instantly see the value in being able to generate leads at this cost, I get asked every day: What makes Google Ads so special? Why is your lead generation system better than what the other guys are running? Well, I'm here to answer that question. Let's start at the top.

1. Intent Intent Intent

I cannot drive this point home enough. When was the last time you heard someone that they weresearching Facebook for a house and found the house of their dreams? I know a person or two that has identified the house they ended up buying in a coming soon ad on Facebook, but never have I heard of someone that was actively searching on Facebook. Now take that a step further. When was the last time you heard someone say they searched Facebook for a mortgage lender? That I can pretty much guarantee is never right? 

The fact is people don't go to Facebook to talk about a home loan or inquire on a house. Does it happen? Of course it does, or nobody would be generating leads there. But there are some drawbacks to pulling people into your lead generation "funnel" with a low level of intent. For example, on Google, we are able to require a 10-12 question lead form of anyone who wants to inquire. We don't even have an option to provide less information. Contrast that with Facebook, and any lead that you're seeing for less than $5 is going to have 3-5 data points top. Name, Email Address, Phone Number, When Are You Making Your Purchase, and maybe even Do You Have a Real Estate Agent? 

When you run those same ad campaigns but try and get them to fill out the same form that I require of the leads on Google, good luck. My cost per lead was consistently higher on Facebook than it was on Google running this approach and I have heard countless lead generators on Facebook say that the lead forms that I require of the leads we generate just doesn't work.

People go to Facebook to interact with their friends/family and watch funny cat videos. They're looking for one thing: dopamine. If you can create an ad that's enticing enough for a human brain to make the assumption that what's lying on the other side is something as good as cat videos or their friends/family, then you can get people to interact with your funnel. But the minute their brain recognizes it was mistaken, it's screaming "SHIT, SHIT, GET ME OUT OF HERE!"  Which is why you get so many junk leads on Facebook even at the point that people do submit their contact information.

2. Where Do You Think Facebook Gets Their Data?

According to Facebook's website, they have first party tracking data that comes from the tracking cookies that they assign on people's devices, but they also purchase large amounts of data from third-party providers and then organize it in such a way that it can be used for targeting on their platform. So let's break this down starting with tracking cookies. Facebook has one of the largest networks of advertisers in the world, and these advertisers are placing tracking pixels on their site to be able to leverage for their personal benefit in running ads. But every single one of these pixels is reporting to Facebook, which is how a lot of data becomes available directly to Facebook. Intertwine that with their controversial use of a device's microphone which many have drawn the conclusion leads to constant eavesdropping and data mining, and on their own, they've got a pretty solid core. 

Third party providers are a little more cryptic in how they get their data, but instead of going into the gory details let me just make this point: You have to put data out for someone to be able to collect it and use it to market to you. Meaning if a prospect is within Facebook's targeting categories for "likely to move" or "first-time homebuyer" it's because of something they did to trigger that categorization. They visited a website, had their credit pulled by a mortgage lender, inquired about purchasing a home at a show somewhere, etc. They did something to trigger the targeting category.

When you get an idea in your head and want more information, what's the first thing that you do with that idea? For most people active on technology (your target market for Facebook ads), the first thing that they're going to do is perform an online search related to that topic. Statistics show Google receives at least 70% of these searches, so where would be the place that you're most likely to catch people at their peak level of intent? That's right, Google. So this ties into my first point. Because what I'm saying is that you're more likely to catch a client before a Facebook Ad does if you're marketing on Google. But even if for some reason Facebook has that data before they even perform a web search, the web search again indicates a peak in the buying cycle that engagement with a flashy ad in your timeline doesn't.

3. They Convert A LOT Better (Or At Least A LOT Faster)

First off, I want to start by saying the results and numbers that I share are based on my experiences, the experiences of dozens of marketers I've interviewed, and the experiences of my clients and prospects. Take them with a grain of salt. The fact is, there really isn't an effective way to prove conversion rates from app to closing on deals currently, or at least not one that we or anyone else in this space is leveraging currently. So I'm going to provide some anecdotal statements and pair them with some sound logic, and I think you'll follow easily and what I'm saying will make sense.

Whenever the conversion rate with leads is discussed, it should always be expressed with a time modifier. Remember what we talked about earlier? If you give me a page full of phone numbers in a phone book, and a year to build relationships with those that I get in contact with, I'd be willing to bet I could convert .5%-1% of those phone numbers. I'd be willing to bet that you could do the exact same thing. There are many pieces that make a good sales funnel work, and lead generation is just one piece of that puzzle. After generation, it's how you work the lead that can ultimately take a lead gen source from zero to hero. We always express our conversion rates with a time modifier of 120 days. Why? Because when people are searching on Google, they're close enough to their buying window to be able to expect some conversions in that window of time. That's what makes them quality leads, as opposed to basically taking a list of people that vaguely expressed interest and convert them over a year or more's time.

Also, consider this. How hard is it for a qualified buyer to find a mortgage loan when they need it? Pretty damn easy right? So what in the hell is going to make a qualified buyer click on a Facebook Ad advertising a mortgage? Not a lot... The majority of what you're going to get is sub-prime borrowers in troubled situations, and although they need help more than the qualified borrowers, I'm going to go out on a limb and say that probably isn't your target market... Lower lead quality drives down conversion rates, especially when those conversion rates are expressed with a time modifier. After all, even if you get someone that is ready and willing to buy a house, it's not a conversion if they won't be able for 6+ months.

With that background info, I'll give you some numbers based on what I've seen and experienced in the market. When expressed over a 120 day period of time, Facebook mortgage leads convert at .5%-1%. I want to be clear that most people that are generating leads on Facebook are not generating mortgage leads, they're in fact generating home buyer leads, which convert at an even lower rate for loan officers. Have I seen people that claim a better conversion rate? All day, every day. But if you bring a modifier of 120 days into the equation, the numbers plummet. Compare that to the average conversion rate across my clients at 3% inside of a 120-day window, and you start to see exactly what I'm talking about. From 1% to 3% may not seem like much but consider you're literally getting 3x as many deals for the same amount of follow up and effort. When you couple this with 3x the opportunity to either meet a new agent or refer the business to one of your own agents, and 3x the opportunity for direct referrals from your client and the ROI difference at the end of the day isn't even a comparison.

So is Facebook Lead Gen Useless for Loan Officers?

Simply put, no.

Facebook is a great way to build brand recognition within your community to make your leads easier to convert at the point that they come in. It's also a great place to drive traffic to events for yourself or your referral partners. Lastly, Facebook can be leveraged as an excellent source for you to retarget anyone who has clicked on your ad, but didn't fill out the lead form. But none of these approaches are what loan officers are looking for right now. Loan officers are looking for a way to get hot, qualified leads in the door so that they can build their business quickly. And for that purpose, Google Ads shit on Facebook ads, and in the space of mortgage lead generation, probably always will.

If you're looking to learn more about Google Ads and lead generation, we've got a couple of options for you. First off, you definitely want to join our Facebook group, Empowered Mortgage Marketing. We've built and continue to build a community around mastering the art of generating and converting leads, and would love to have you be a part of it.

Join our Facebook Group here.

Check out the rest of our blog posts for some more information on lead generation and conversion strategies for loan officers.

Go to our Youtube channel where we have some more great content to help you on your journey. Don't forget to subscribe!

Lastly, if you're just looking to figure out how we can help you leverage a turnkey solution that maximizes all of the strategies that I write about and teach, all you've got to do is click here to schedule a call with me.

Thanks for reading, and I'll see you at the top!

Michael McAllister