Ditech.com, the direct-to-consumer lending arm of General Motors Corp.'s Residential Capital LLC, has revamped the television commercials that have made it a household name.
About two months ago the Costa Mesa, Calif., Internet and telephone lender ditched the ads' well-known character - a frustrated, buffoonish banker who laments that he "lost another loan to Ditech" - in favor of a more straightforward message.
Also, for the first time since GMAC Mortgage bought it in 1999, Ditech is mentioning that it is "a GMAC company" in ads, both on the screen and in a voice-over.
These are among a number of changes made under Rick Powers, the general manager of Ditech, who was put in charge of the outfit in August.
He has hired Keith Goldberg to be Ditech's chief marketing officer. Mr. Goldberg, who had been the chief executive of Rethink Group, a Stamford, Conn., brand consulting and advertising firm he founded, came up with the memorable "What's in Your Wallet?" ads for Capital One Financial Corp.
In an interview Monday, Mr. Powers said that Ditech, which is mostly a prime lender, found in focus groups that the old ads gave the misimpression that it was a nonprime specialist. And "once they heard" that Ditech was part of General Motors Acceptance Corp., "they said, 'Wow.' "
Robert Passikoff, the founder and president of Brand Keys Inc., a New York consulting firm, said that "most of the time people don't appreciate joking about financial matters" in advertising.
Though humorous credit card ads like Capital One's have been effective, with Ditech "you're talking about my home now, not some piece of plastic," Mr. Passikoff said. Gags create the impression that the product is "not as good as the serious stuff."
On the other hand, mentioning the GMAC connection will have a "halo effect" for Ditech, Mr. Passikoff said. "People know the financial side of GM. It brings a lot with it."
Mr. Powers said Ditech is also shifting the mix of its online advertising to more "paid search" advertising and less "display" advertising. Search advertising is what an Internet shopper would find on the right-hand side of Google when they do a search for "mortgage," for instance. Display advertising is typically a larger advertisement that takes up the top of a computer screen.
Though display ads "get a lot of clicks," paid search ads get a "higher level of pull-through to funded loans," Mr. Powers said. GMAC is spending half of what it used to spend on display Internet ads and has boosted its spending on search ads by about 80%, he said. "When you look at the effectiveness" of the paid search ads compared with display ones, "it's no contest."
Mr. Powers joined Ditech from Metrociti Mortgage Corp., where he was the president of the Western division. Previously, he was the president of the builder KB Home's mortgage unit. Before that he was the president and chief executive of Charter One Mortgage Corp. for seven years.
As adjustable-rate borrowers face resets in the coming year, Ditech is making an increasing number of loans that refinance these consumers into fixed rates, Mr. Powers said. "There's places in life where you don't want volatility," and though the borrower's new fixed payment can be higher than the first adjusted one, they at least "know what it is."
General Motors Acceptance Corp., the finance arm of GM, reorganized its mortgage subsidiaries under Residential Capital Corp. last year. The holding company, known as ResCap, converted to a limited-liability company last month.
ResCap said last week that it had combined the servicing platforms of its operating subsidiaries GMAC Mortgage, Homecomings Financial, and GMAC-RFC. Asked if there were opportunities for a similar consolidation of Ditech with the customer-retention channels of GMAC Mortgage and Homecomings, Mr. Powers said there "probably are," but "we haven't gotten there yet."
