Overview of Facebook’s Changes

The company’s ad practices came under review after articles published by ProPublica demonstrated how advertisers can exclude, as Facebook labels it, “ethnic affinities” from their ads.  Further legal action from civil rights groups, the American Civil Liberties Union claiming a violation of the Fair Housing Act, and a complaint from the Department of Housing and Urban Development. 

Facebook responded with a series of responses to these complaints with changes to advertising and updating policies to further complaints.  Those unpacked discriminations against protected groups including veterans with disabilities and single parents to name a few.  

Facebook’s Advertising Changes:

• Removing 5,000+ ad target options a majority of these are exclusions of target audiences.
• Including certain religious terms is forbidden such as “Passover”, “Islamic culture”, “Buddhism”, and “Evangelicalism”.
• All U.S. advertisers are required to comply with the company’s non-discrimination policy, previously only advertisers offering housing, employment or credit ads were required. 

The Impact On Lead Generation for Mortgage Lenders

These Facebook advertising changes are now in effect and the resulting impact:

CPLs will increase

Targeting new customers will take more effort, and CPLs will increase.  The ability to focus or exclude is always helpful when refining your target audience to limit impression to only your target audience. Those impressions you directed to your target audience are going to be spread across a broader segment, of more than -likely less qualified facebook users.

Investment in Brand Becomes More Important.

Direct response marketers who focus only on lead generation will need to incorporate more brand awareness into their funnel.  If you have to advertise to a less “interested” audience, marketers will need to create better awareness for their brand to this audience to enable a higher conversion.  The highly transactional consumer at this moment converts well. This consumer is who Facebook was great at targeting. Your audience now will be a mix of high interest and low interest.  Your brand advertising will need to reach and educate the less qualified in your audience in an attempt to move them down-funnel.   Move into video now.

Retargeting is a Now Required

Strategically using your CRM contact data, leads from trade events, your LendingTree, LeadPoint, Google, and referred leads is more important than ever.  Creating retargeting campaigns from your site visitors and new leads Facebook could move down-funnel from new lead generation to mining existing leads. Then working to push them through to conversion.  Effectively moving your new lead generation budget to another channel. 

Campaigns Should Start with Look-Alike Audiences

Closed loan customers may now be a better place to start than with targeting.  Using Facebook’s modeling tool, you can accomplish the same targeting you achieved before these changes; however, using Facebook’s modeling will require more fine-tuning.  For example, you will want to create and test local models (buyers in Dallas, TX), loan program audiences (FHA Streamline Refinance customers), or Non-QM self-employed home loans to name a few.  Modeling is specific to your customer and company, and with the time taken, you can build a reliable lead generation program channel.

Mortgage Lead Generation Must Examine Other Online Channels

Marketers using full funnel analytics to understand their contribution from Facebook usually conclude that while CPL is inexpensive,  the lead quality is low (low conversion rates, higher cost per funded loan).   Facebook’s changes do not facilitate better targeting, lowering CPL or CPFL. Generally, we can expect that the cost per qualified lead will increase if marketers remain with a one-dimensional marketing approach. Marketers increase performance by integrating brand messaging and awareness upward in the funnel.  Implement improved retargeting methodology and generate refined models for Facebook.  

Take It In Stride