Google Comparison Ads: A product review

After a few minutes of playing around with Google Comparison Ads one thing is very clear. It is the slickest, most user-friendly consumer mortgage-quoting product on the market by a considerable margin. Regardless of whether or not Google has the ability to push more traffic towards their product based on the dominance of their search engine, this would be a winner. It is really that good. Because Google does have a means of directing a large chunk of the Internet’s traffic to this product overnight I believe that this is one of the first products that Google has developed that has revenue potential approaching that of Adwords and Adsense.

So what aspects of Google Comparison Ads do I think are so great?

1. The way that quotes are delivered is different from anything else I have ever seen. As one changes one’s quote criteria, the quotes presented to me change on-the-fly. For instance, if I change my credit rating from “Very good” to “Poor”, in less than a second the list of quotes that I am eligible for changes.


2. The interface is extremely well thought out. Everything I need is on one page. The left hand quarter of the page is my form and the right hand three quarters is the mortgage results. In other words, to get what I am looking for I can stay on the same page. If I want a Purchase quote versus a Refi, I check a radio button and the form updates. I am not pushed to a new page. In fact, there are only two times that I am presented with a new page in the entire process. First, if I ask to see the “Loan details”, which is another extremely clear and well-designed page that makes it clear to me what the mortgage involves. Second, if I am eligible for more than 10 mortgage products, like in search, the results will be displayed on multiple pages. Although the user decides how the results are sorted i.e. by APR, Interest Rate, Monthly Payment, Lender fees or Name.


3. The “help” provided is comprehensive and intuitive. If I want to do a refi and I’m unsure of the value of my home I simply click on a “Get a quick estimate” link which pops up an ajax bi-modal window on my screen in which I can enter my Street address and Zip code and get an instantaneous estimate and range on the value of my home. For my home the estimate seemed very accurate, more so than Zillow’s.


4. There are two choices for getting in contact with a lender. You can call them directly or you can fill out your info in a two-field pop up box and they will contact you. This choice is important to most consumers; as is the fact that they are not passing information to companies that they don’t know; unlike the case for most of today's lead providers.

OK, so this is an incredibly slick product but what does it mean? I believe that the outstanding execution of this product has a few implications:

1. As I’ve said before. Google Adwords is now a less viable option for mortgage lead providers. Most lead providers will not want to advertise next to a service that is superior to theirs.


2. Mortgage brokers are going to struggle in a world where consumers can get instantaneous mortgage quotes online. Assuming that all of the lenders jump on this bandwagon, which I think they will need to, then I believe consumers will gravitate to this way of finding a lender versus going through a broker.


3. In the long term this cannot be great news for mortgage pricing and product eligibility engines, especially the ones that focus on auto-quoting for brokers like Moretech and LoanSifter. Once Comparison Ads gets momentum, most lenders will quickly realize that to be successful they will need to provide real-time feeds of their mortgage rates. That will likely spawn other applications for the data. I think there is a business model associated with getting real-time quotes on your iPhone that someone should be developing, if Google isn’t already.


4. As many have said, this might not stop at mortgage. Whether it is Google or someone else; this type of service and the way it has been executed could and probably should become the dominant method by which consumers connect with most financial services.


5. Prices will come down. As we’ve seen for consumer goods when they are available on the Internet, the retail costs are lower and competition is much more fierce on price. As a consequence once lenders are stripped of some of the broker network I think the costs of mortgages (and other financial products) will come down considerably.

What google is doing as many people have commented is not completely new. It is an evolution of LendingTree’s model, has similarities to products that Bankrate offers and is going after exactly the same opportunity that Zillow’s mortgage marketplace is pursuing. However, I still think that Google’s product will be more successful and disruptive than many industry insiders would like to admit. Google may not have the first mover advantage here however time and again the company that wins in a new business category is the one who has first executer advantage. LendingTree, Bankrate and Zillow all have fantastic products, however Google’s first iteration seems to me executionally close to perfection.

Google Launches Comparison Ads - BIG News for the Lead Industry

It's official, Google has gone live with their
Comparison Ads product.

Google now competes with other lead providers for lead buyers' share of wallet in mortgage. Some people have speculated that they are biting the hand that feeds them by competing with the likes of LendingTree (one of their big adwords buyers); others that this legitimizes the lead sector and grows the pie for everyone. One thing is for sure, with the traffic that Google gets and the high intent levels that Google visitors who enter search queries around the term "mortgage" have, the lead industry probably just changed forever!

So what does the Comparison Ads products do? Looking at the details of the post it looks like when a Google user enters a query about mortgages, the first thing that happens is that the top sponsored link that appears is one form Google asking whether or not you want to compare mortgage quotes. Notably when I enter a query it does not give me this option so I assume Google are only offering the option to a percentage of the users who are searching for a mortgage.


If one then clicks on the "Compare rates" button on Google's interface one is moved to a screen with a set of options on the left hand side to identify your situation so that a quote can be generated. If the image on Google's blog is accurate then it looks like there is no submit buttons so that suggests that the quote becomes more accurate in real-time as you enter more information. No one else currently does that that I know so this is quite a nice feature. The other thing that is notable is that for each quote provided the consumer is given the option to "Request quote" or call a number for the provider. This is exactly the functionality I referred to just yesterday in my post on Consumer Initiated Contact leads and lends much more credence to my belief that this is the model of the future for lead providers. I assume that the "Request quote" sends the data that you have entered to the lender, although it does not appear to have any identifying information, which make the data rather useless... In summary it's pretty hard to figure out exactly how the Comparison Ads really works because the screen shots appear to be "illustrative". No doubt full details will be provided pretty soon.


As both Leadcritic and Techcrunch point out, whatever the functionality, this is a body-blow to some lead providers. You can argue that Google is wielding monopolistic power or you can see it as Google providing what the consumer really wants. I do think that it will be hard for certain lead providers to compete with Google. If a lead provider relies upon search for the majority of their leads and is unable to quickly switch to other forms of traffic generation, then this will be a problem for them -I'm sure Bing will follow suit pretty quick as what is being offered is quite similar to farecast in travel and perhaps even dazed and confused Yahoo! will enter this market too. I think search is soon to be a non-viable option for lead providers.

That said, this seems like quite a different product from LendingTree's in that with LendingTree you complete a massive form in order to get what is (or should be) a pretty firm quote. Google's form seems very short and thus the accuracy of the quote generated may be far from perfect. It is also unlikely to have quite the same impact on lead providers who generate their leads in the plethora of ways that don't involve search.

My personal view is that if Google's foray into the lead industry is successful then consumers and lead buyers will be the big winners. I think it will force the lead industry to try harder, innovate more and become more transparent in order to compete. While uncomfortable for many current lead providers, I don't think that this is a "bad" thing for the industry.

Just for CICs – How the Consumer Initiated Contact will come to dominate lead generation.

A standard Internet lead is pretty inefficient. The consumer has no control and usually isn’t sure where their information is going. As a way of finding a provider of a mortgage, degree, insurance policy, debt settlement company however, it is better than the stone age method of finding providers in the yellow pages. As a consumer, being a “lead” requires less effort and thought from the consumer’s perspective than thumbing through a telephone directory and then making multiple calls to providers. The concept of filling in a form with a bit of personal info and then letting the Internet take care of matching you up with companies who want your business and who are prepared to call you multiple times until you decide you have a spare moment to talk to them is appealing. That’s why the Internet lead industry is large and growing. It’s a valuable service… but it’s also an inefficient and highly imperfect one.

I believe that leads are inefficient because they take control out of the hands of the consumer and as a consequence the chances of matching consumers up with companies that are not of interest to the consumer is high. I believe the providers that will succeed in the lead industry are those that allow consumers to do extra qualification steps before being put in touch with a company.

An obvious example of this type of service is Zillow. Zillow allows you to see a bunch of quotes from mortgage lenders before you hand over your personal information to the ones that you, the consumer, want to do business with. The same model would work in education by matching prospective students with courses they are qualified for and meet the criteria they are looking for such as on-campus facilities, availability of tuition scholarships etc. It also works in insurance where most people who complete a lead form only want comparative quotes.

I am convinced that providing a consumer with a set of options and letting them decide who will contact them is the way the Internet lead industry will go. This is plainly a much better consumer experience as well as getting over the issue that people don’t like providing detailed personal information if they don’t feel they have a great deal of control over who gets it.

I am also convinced that consumers want to choose who contacts who. Most consumers would like both the option to call the advertiser and the option to be called by the advertiser. And regardless of whether they contact the lead provider they want the data that they entered on the form to be magically in the hands of the person who answers the phone when they call.

This new model is one based on Consumer Initiated Contacts versus Leads. I believe that it won’t be long before people think of buying CPCICs alongside, and in many cases in preference to, CPCs and CPLs. The technology has evolved to the point where everything I describe above is easy, the consumer demand for this appears to be there, all we need now is for existing lead generators to innovate. If they don’t I believe that new entrants will disrupt the market. My bet is that the latter is much closer than most people think.

LeadsCon Las Vegas: Registration Open

It looks like registration for LeadsCon Las Vegas (the big brother of LeadsCon East) opened today - although the event is not until February 23rd. My opinion is that this is the must-go-to conference of the year for lead buyers, sellers and anyone who operates in the lead ecosystem. Everyone who matters in the lead industry attends so from a business development and sales perspective it's a must; for anyone who is trying to learn about leads or wants to see if they can improve what they currently do it's probably the single best 2-day investment you can make.

I'm looking forward to a great event and no-doubt a relatively quick sellout like last year.

Zillow says "show me the money!"

Zillow formally announced to it’s lender network today that it will start charging for it’s leads as of December. As Lead Critic points out on his blog, this was probably inevitable. Certainly based on a number of conversations I have had with Zillow users they had all anticipated this would happen. However, unlike Lead Critic, I think that Zillow's decision to charge is a good sign.

That Zillow now has the confidence to charge for their leads reflects the steady growth of their free service over the past year or so. They have now served up nearly 9 million quotes and serve just under 5,600 companies. Not bad from a standing start in March 2008.

Of course cynics will argue that giving away leads free, which is what they have done until now, makes it easy to grow quickly. In fact Lead Critic makes a good argument around the point that now that they will charge for their leads they are just like any other lead provider and will likely fade away. I don’t think that is true but I do think that Zillow is about to undergo a world of pain that it probably has not fully anticipated.

I continue to believe that Zillow has the most revolutionary lead generation service of any lead provider. It is consumer versus buyer-centric because it gives control to the consumer with respect to when they are contacted and by whom. I believe that that is the future (and soon becoming the present) of lead generation. That the service is no longer completely free does not detract from this fact.

There are other reasons that I am glad that Zillow is now going to charge for their leads. The successful users of Zillow leads already pay something for the leads effectively anyway because they use lead management platforms like Leads360 alongside auto-pricing software. So charging for leads will bring some more seriousness to the use of the Zillow Mortgage Marketplace (ZMM) by lenders. More importantly however, I think that charging will push Zillow to make their service much better than it is today as well as reducing their cycle time on new innovations. Not because they will have the funds to make these changes now (I believe the VCs took care of that problem already) but because their customers will demand more of them now that they are truly fully paying customers.

And that is where the world of pain that I referred to will come from. Take Zillow's pricing model for instance. I actually spent some time with key members of the ZMM product team last week discussing their new variable pricing model. I won’t describe it in detail as I don’t think they have publicly released the full details of it yet. What I can say is that it somewhat loosely prices leads based on demand. However, they haven’t taken the google adwords pricing model but a dynamic pricing model that is, as far as I know, completely unproven. I think they’ll learn a lot from the process but it will be a very painful for Zillow. Dynamic pricing models are very difficult to get right and I personally think that the model they are going to market with won't be optimal for either the buyer or the seller. However by not taking the easy approach the ultimate outcome could well be that after some serious tweaking that Zillow ends up with something that is superior to the pricing models that currently exist for leads (or indeed CPC ads).

So the fact that Zillow will now charge for leads for me is a positive and inevitable sign of progress. I still think they will continue to change the face of the lead industry but from December onwards they are going to have to try even harder as they do so.

B2B Lead Management: How does it Differ from B2C Lead Management?

Forrester recently released an interesting report on B2B lead management. It got me thinking about how different B2B lead management is from B2C lead management and whether or not the two technologies will at some point converge.

Just so we are straight on definitions; B2B lead management automation software is a technology that helps business that market to other businesses capture, nurture and manage business leads. B2C lead management is the same thing but for companies who manage leads that represent consumers and not businesses. Given that you have two categories of technology doing almost exactly the same thing i.e. managing leads; it surprised me that the technologies are quite different in their approach.

B2C lead management is pretty focused on doing a few things very well:

1. Distributing leads quickly so that the user of the software is the first to contact the lead.

2. Managing the sales process so that the sales person is always aware of which leads they should be contacting next, enforcing continuous call backs until the lead is qualified or rejected.

3. Nurturing the lead with automated emails

4. Solid reporting so that you can compare performance of sales reps and lead sources.

It is an environment that frankly caters to a software buyer that wants a simple but effective sales process and not a great deal more.

B2B lead management isn’t focused or simple. While reading the Forrester report, the first thing that strikes you is that there are a ton of vendors all doing quite different things. Indeed Laura Ramos the report’s author refers to the offerings of these providers as a “cacophony of claims similar in name only”. The report covers 18 companies, none of whom are considered to be clear leaders in the space, although there is a slight tip of the hat to Eloqua, Marketo and Silverpop. On the B2C side, Leads360 clearly dominates a much smaller set of, largely vertically focused, lead management solutions with Leads360 being the only lead management solution that dominates multiple verticals. Similalrly the focus of B2B vendors is different to B2C platforms. It seems that the most significant foci for B2B lead management software providers are;

1. Campaign design: Allowing businesses to create marketing campaigns involving lists, forms and websites

2. Scoring: unlike with the rapidly merging B2C scoring industry that I discussed in a previous post called Lead Scoring: What is All the Fuss About? which involves a heavy reliance on sophisticated predictive modeling; in the B2B category the emphasis is on a more rudimentary way of scoring each lead based on what marketers “think” are behavioral indicators of intent. Such signals of quality might be the value placed on downloading a whitepaper versus completing a form asking for a brochure.

3. Routing: leads are distributed to salespeople primarily based on score versus the multitude of criteria typically used by sophisticated B2C lead buyers. And whereas real-time distribution is key in B2C lead management; B2B routing lives or dies based on the quality of downstream automation into CRMs/Sales Force Automation tools. What is interesting about this is that although the dominant B2C lead management solutions do integrate with CRMs, especially the vertically focused CRMs such as agency management systems in the insurance industry, this is not as important. That is primarily because B2C lead management solutions cover the majority of sales force automation functions that a B2C sales force requires. Since the sale cycle and product/service are typically shorter and simpler respectively; a less sophisticated level of sales force automation is required which is easily handled by one total solution.

4. Lead nurturing: this component of B2B lead management systems is far more evolved than in the B2C industry. On the B2B side lead nurturing not only involves event-triggered emails as in B2C lead management but also covers complex, multi-step nurturing flows based on rules, responses, inactivity, sales events and various rounds of follow-up.

5. Reporting: while reporting is key in both B2C and B2B lead management; B2B reporting is much more focused on the marketing departments needs whereas B2C reporting is more focused on the sales management team.

And at its heart, I think that alongside the intrinsic difference in end customer sophistication, that is where B2C and B2B lead management automation solutions differ most. B2B providers attack the problem from the point of view of a marketer whereas B2C lead management providers look at the solution from the point of view of the sales manager. A B2B customer asks; How can we generate better quality leads? What can we do to align out marketing activity with sales results? How can we reduce our reliance on the sales team by increasing the automation of the nurturing process? On the other hand, the B2C lead management industry emerged with little regards for the needs of the marketing department because lead providers such as LowerMyBills, lendingtree and Quinstreet already had consistent lead quality taken care of. The questions that B2C lead management buyers were trying to answer were; if I am one of six companies receiving this lead, how can my rep be the first to contact the customer? How do I push my sales team to be more aggressive? How do I make sure that my name gets in front of the customer more than my competitors does? How can I avoid paying for leads that I don’t qualify?

The big question is whether the different needs of a marketer and a sales manager should be taken into account in one lead management system. I think that they certainly should. My biggest learning from looking at B2B lead management offerings is that there is a lot more that companies like Leads360 could be doing to appeal to the marketing departments of B2C companies. There is a whole world outside of bought Internet leads that needs addressing for B2C lead management platforms to remain relevant. B2B lead management automation systems however will struggle to more than a tiny niche play without taking on more sales management oriented functionality. What I believe will happen to the successful B2B lead management companies is that they will be gobbled up by the relatively larger sales automation companies (SFAs) so that they can offer the total solution. Will B2B lead management platforms ever enter the space of B2C lead management software? “Never say never” but given the vast difference in the needs of each market I think it’s unlikely for the foreseeable future.

How Mint got minted

Most people will have seen that mint.com recently sold to their rival Intuit for $170M. Not bad for a company built by a PhD drop out in his twenties. Aaron Patzer just gave a really interesting talk on how he built his company. What’s most interesting about his presentation is how closely he looked at the lead generation market in justifying his post-seed round financing. Beyond that it’s a great overview of his journey from nothing to exit, which for the entrepreneurially-minded is always a fascinating topic of discussion.

Here is the presentation he gave:

Startup Building 101 -


Here is the video of his presentation:

Mint CEO Aaron Patzer on Startups from Techcrunch on Vimeo.

Quinstreet heads full force into the Insurance space

Earlier today it was announced that Quinstreet had paid $16M for the domain name and “related assets” of insure.com from Insure.com, Inc. (NSUR). $16M is a big bet on little more than a domain name, especially when you consider the domain was purchased in 2001 for just $1.6M. Nevertheless, I think it’s a great strategy by Quinstreet. Having a flagship domain as you go after a vertical is a clear signal to your buyers that you are fully invested in the success of that line of business.

Insurance is a great vertical for lead providers and just about the most stable business you could enter. True, margins are not great for insurance agents so the price that they are willing to pay is relatively low, however there are more potential buyers of leads in the insurance industry than in just about any other vertical. Indeed the company I work for, Leads360, has had amazing success in this vertical over the past 9 months and now that we have an insurance lead management product that we have spent the past year perfecting I believe that we have a product that is light years ahead of any other lead management software for insurance companies. It’s great to see that a company that I admire as much as Quinstreet is all in on insurance too.