Online lender Quicken Loans signed up to become a "premier advertising sponsor" and content provider on HomePages.com, a service of real estate information company HouseValues, a deal that opens up a new world of information to consumers and an untapped marketing opportunity for Quicken.
HomePages.com, a service of real estate information firm HouseValues, has combined listings of houses for sale with mapping technology and neighborhood demographic information to give home shoppers a lot of information quickly, says Kevin Akeroyd, vp of the mortgage unit at HouseValues.
By typing in a ZIP code, consumers can access aerial maps and see home listings as well as information about the neighborhood such as student-teacher ratios in nearby schools and quality-of-life amenities like the location of parks and firehouses.
"It shows the context of the whole neighborhood, not just the square footage and price," Akeroyd says. The service can zero in on specific ZIP codes and shows house listings for 90 percent of the country, he says.
As part of the arrangement with HomePages, the lender will provide articles on the mortgage market for the site, which was a key aspect to the allure of such a deal, says Aaron Chestnut, director of online advertising at Quicken. "There are more direct ways to get customers, but what interested us was the unique opportunity to educate consumers," he says. Quicken is already a client of HouseValues' mortgage division, The Loan Page.
Chestnut says Quicken has similar relationships with other Web sites, where it provides or sponsors content or tools, such as a mortgage calculator. Other outlets for this type of marketing for Quicken include USA Today, Yahoo and AOL, he says. "Anytime you have the ability to get in front of the customer, it's a good thing."
Akeroyd says HouseValues is able to generate leads for financial companies in two distinct ways. One is to offer links to their own sites either from editorial content or straight advertising. The other is from a service where mortgage companies can bid for home shoppers who have put their profile online in hopes that banks will compete for their mortgage business. In either case, HouseValues generates revenue by channeling leads to the mortgage company, Akeroyd says.
The firm hopes to add more advertisers to the mix, at least five in the third quarter, Akeroyd says. Eventually, he would like to have a model similar to Yahoo Finance or Bankrate, with three or four main advertisers and a host of smaller ones. And it won't be restricted to just mortgage providers. For Akeroyd, part of the benefits of this business model is that an array of service providers needs to market themselves to home shoppers, making them all candidates for advertising on the site. Those could include anything from moving companies, insurance carriers or even furniture stores.
Moreover, he says the current market is an exciting time for HomePages. As the refinancing boom shrinks, new homebuyers make up a growing part of the market. And new buyers represent the biggest opportunity for a business like HomePages, since the refi customer is staying in the same house and simply restructuring the loan.
This type of service fills a definite need in the market, says Gorden Borrell, president of Borrell Associates, a consulting firm that tracks online spending. HouseValues is one of his clients, so Borrell would not comment specifically on its business. But he did say the marketplace puts a high premium on data. "Homebuyers thirst for more information as homes have become a more valuable asset," he says.
The local real estate advertising market is worth an aggregate $11 billion, according to Borrell. It's also a market that historically has been tough to crack because the lending executives who controlling local advertising budgets are typically very conservative when it comes to making investments. These typically will only spend money after an audience has been established, Borrell says. He adds the market that has remained very fragmented and ripe for an Internet company that can deliver separate audiences for companies in different areas.
Akeroyd expects other competitors to offer the same type of service but he's confident the legwork his company has already done will make it a formidable competitor. "It's time consuming to form relationships with all the necessary people...and that's not trivial," he says.
Borrell agrees with this assertion, saying that there is "something to be said for being a first-time mover."
