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.
Why HECMs are surging despite an uncertain economy
Which do we choke? Inflation or possibly the nation’s fragile economic recovery? That’s a question the Federal Reserve’s Federal Open Market Committee is grappling with as consumer prices soar and global shortages of goods worsen. CNBC reports, “A number of participants suggested that if the economy continued to make rapid progress toward the Committee’s goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases,” the meeting summary said.” What’s worrisome is the nation’s economy to put it plainly is uneven. The committee’s next meeting is scheduled for June 15-16th.
Businesses reopening and seeking to hire staff after the pandemic shutdowns often find themselves competing with the federal government for employees that thanks to a $300 per week unemployment supplement. The National Federal of Independent businesses found 44% of small businesses had jobs they couldn’t fill. That’s a record high. The Biden administration’s solution?
To urge businesses to raise their pay to compete with or exceed the Fed’s supplemental bonus. The bottom line is employers competing with the federal government for workers serves only to postpone the economic recovery needed for the Federal Reserve to hike rates. That could spell big trouble for the American consumer and good news for homebuyers and reverse mortgage lenders.
Another paradoxical outcome is despite a fragile economy and surging inflation home values may hold their record values or even appreciate thanks to a historical shortage of housing inventory and meager new construction In fact, single housing starts plunged more than 13% last month compared with March according to the U.S. Census. A crash or reset of home values that I and many others anticipated may have to wait until the cost of building materials normalize and inventory is substantially expanded.
The likely outcome is that reverse mortgage lenders will continue to see ideal market conditions despite inflation and nagging unemployment. High home values and low-interest rates continue to push HECM endorsement volume, much of that thanks to a record number of HECM-to-HECM refinances. How much have endorsement volumes improved year-to-year? This chart compares endorsements from Feb 2019 to April 2020 to February 2020 April 2021. Much of that growth can be attributed to refinances. In fact, in March nearly half or 48% of all FHA case numbers assigned to new HECM applications were for HECM-to-HECM refinances. The challenge is how to wean ourselves from this low-hanging fruit. Last week I spoke with one successful broker who told me he receives a steady stream of calls from former borrowers saying their home has appreciated another $200,000 or more and that they would like to refinance to get more cash. While he’s certainly not turning away the business he remains steadfast in his outreach to local professionals and advisors for long-term growth. And speaking of growing your business, tomorrow – May 25th at 11 am Pacific we are hosting a free webinar on Solutions-Based Sales for reverse mortgage professionals. Be sure to register using the link below this video as space is limited.
We have much to be thankful for in this upside-down economic cycle. While the nation’s GDP is surging, albeit when compared to last year’s economic shutdown, our economic recovery is facing some strong headwinds. Yet despite these challenges we thrive.