Without audience targeting are Google Ads Dead? Think again…
Early this month Google announced new restrictions for targeting specific audiences. The restrictions apply to content related to housing, employment, credit, and those who are disproportionately affected by societal biases. The news of these restrictions created quite a stir among industry brokers and lenders who heavily rely upon targeted Google ad campaigns. All which may have you asking if these changes will kill future reverse mortgage advertising on the world’s most popular search engine. In just a moment we’ll hear from our online SEO expert Josh Johnson to find out.
Google’s restrictions are not necessarily novel nor unexpected. It was just over two years ago Facebook faced scrutiny from federal regulators for allowing those offering credit or housing finance to restrict ad audiences by race or religion among other questionable metrics that would violate HUD’s fair housing rules. An investigation by ProPublica broke this news in October 2016. It was nearly two years later in August 2018 that HUD filed a formal complaint against the social media giant for discriminatory advertising practices. Seven months after HUD’s complaint Facebook announced sweeping changes. Both Facebook and later Google, took a blunt approach much to the chagrin of lenders and service providers.
What ad filters are going away? In its official release Google revealed, “credit products or services can no longer be targeted to audiences based on gender, age, parental status, marital status, or ZIP code.”
Is this the end of Google ads for reverse mortgages? To answer that question I reached out to Josh Johnson who heads up Reverse Focus’ Online Dominance SEO program and Google marketing. Here’s his explanation.
Here’s what makes Google unique from other platforms and why reverse mortgage Google ads will continue to reach the intended audience.
To summarize, older homeowners are intentionally seeking out reverse mortgage information on Google which means, yes-your ads will be seen by your target audience, even though you can no longer target specific age groups.
The Manic Housing Market & its impact on seniors
Last Tuesday the temperature was a scorching 108 degrees here in Redding California where our studios and offices are located. Do you know what’s hotter than a summer day in Redding? The U.S. housing market. Realtor.com reports active listings dropped by 50.9% over last year- that’s nearly one-half the number of homes for sale than one year ago. And fewer listings means homes are not staying on the market as long as they once did. In January of THIS year, the average number of days a home was on the market was 76 days. By the end of last month, that number dropped to 39 days a listing stayed active.
These charts by Realtor.com…
reveal a manic market that’s in need of a calming dose of reality. A ‘manic market’; a witty phrase borrowed from a recent commentary in the Oregon paper, The Bend Bulletin. A recent drop in mortgage applications may be the first sign. The Mortgage Bankers Association reported applications for purchase mortgages fell 3% and are 2% lower than the same week one year ago.
A drop in mortgage application activity may reveal that potential homebuyers have hit an affordability wall. Some markets are just too manic to endure. Even applicants approved for a low or no-down-payment loan are holding back. “The government purchase index declined to its lowest level in over a year and has now decreased year over year for five straight weeks”, said MBA economist Joel Kan. He is referring the MBA’s June 2nd weekly survey which reported the government purchased index (that is FHA and VA loans) declined to its lowest level in over a year and has now decreased year-over-year for five straight weeks. Perhaps potential homebuyers see the home pricing looking more like a casino than a healthy real estate market.
While the traditional mortgage applications may be cooling there’s no sign that another manic market is slowing- just yet. HECM-to-HECM refinances continue to surge. In his email to Reverse Mortgage Daily John Lunde of Reverse Market Insight said, “It’s fair to say that refinances are driving volume lately, with both March and April over 40% in [HECM-to-HECM] refinances. We don’t have that detailed data on May yet but I don’t see a reason why it would have changed.”
What could impact the re-fi boom? Getting closer to the answer may require a Socratic approach. Lunde raised these rhetorical questions to RMD. “Will we run out of loans to refinance before the seasoning restrictions expire? Will investors stop paying premiums for loans that have so much higher prepayment expectations than a few months or a year ago? Will regulators decide more restrictions are necessary? Will interest rates and home prices stop energizing the fundamental forces behind the refinances?” It’s important to keep in mind that the current HECM refinance boom would not be accounting for nearly half of all applications and over 40% of endorsements had FHA enacted one proposal. In late 2020 the Trump administration’s housing finance reform plan suggested the elimination of all HECM-to-HECM refinances. That administrative change could have been enacted by FHA not requiring Congressional approval.
To me, the outright elimination of refinances would have been much too blunt an instrument. More natural market forces such as modestly higher interest rates and normative home appreciation rates would be the calming dose for a manic refi market. All this proves that the housing and HECM refinance markets do not function in a vacuum. The market may appear unnatural but when considering the economic forces in play, the result is actually quite natural and logical. It’s said that necessity is the mother of invention. When HECM refinances ebb necessity and available resources will push our industry back to the task at hand- market expansion.