Online Persistence Pays Off With Banner Marketing
Online Banner Ad overnights a package to every borrower who completes an application, and on average it gets back about 15 percent to 20 percent of those applications. According to executive vice president of Countrywide’s Electronic Commerce Division, success in this industry depends on a company’s ability to do business differently.
“To be successful on the ‘Net, you have to realize that this is a paradigm shift, and it’s all a number game,” executive vice president of Countrywide’s Electronic Commerce Division says.
He attributes much of his success to the relationships he has created with his clients via the Internet and claims that his Web clients have referred him enough business to help build his database. “I have been a loan officer for over 18 years,” he says. “In 2006, the incremental business I got from the Internet made this my best year as a loan officer.”
Measure your cost per user session for each company you advertise with. Successful Web companies know that the secret to success on the Web is spending advertising dollars wisely, and they understand that this means estimating the effectiveness of each advertising source by measuring the cost per user session from each site on which they advertise. Savvy advertisers know that the number of user sessions, which is the number of times a site is visited by unique individuals, is a more accurate measurement of traffic than the number of “hits.”
Your Webmaster can provide you with a “Web trends” report, which totals the number of users referred from each source. Using this figure, you can find out what the cost per user session is for each company with which you advertise. For example, if you place a Yahoo! banner for $1,000 per month and your Web traffic report shows that the banner generates 500 user sessions per month, it is costing you $2 per user session.
Measure your cost per closed loan. Your next step should be to find the total number of user sessions for your Web site, which can be found on the Web trends report. Be sure to track all Internet-generated applications that come in via e-mail, phone or mail. This will ensure that you know the total number of applications generated and how many user sessions it takes, on average, to generate one application.
For example, if it takes your company 100 user sessions to generate one application and the cost per user session is $2, then the cost per application is $200. Your last step should be to calculate the percentage of your Internet-generated applications that ended in closed loans. If this number is 50 percent, then your cost per closed loan is $400.
Determine the maximum cost per user session you will pay. Once you have established the maximum amount you are willing to pay per closed loan and how many user sessions it takes to generate a closed loan, your next step should be to determine the maximum cost per user session you are willing to pay per closed loan.
Continue advertising with all sites that give you an effective cost per user session, and stop advertising with sites that yield higher costs per user session than the maximum you are willing to pay. Of course, this formula will not measure the quality of the users being referred to your Web site. If the cost per user session is high for a particular site but you think the site has very qualified users, you may still want to advertise there.