3 Reasons Why Mortgage Social Media Marketing Is Worth the Risk

Social media has emerged as one of the most powerful tools in digital marketers’ toolbox. However, in the highly-regulated world of mortgages where one wrong word in a Tweet could incur serious compliance consequences, lenders might be wondering if the juice is worth the squeeze. Here are the top three reasons why the rewards outweigh the risks when it comes to social media. 

1. Cost 

Declining volumes and the high cost to originate mean lenders are looking for ways to grow their business without increasing their budgets. Organic, or non-paid, social media is effectively free, making it an extremely cost-effective marketing outlet. However, paid social media does not have to break the bank. On average, banking/finance companies expect to allocate 11.7% of their total marketing budgets to social media marketing this year. While most social media platforms require a minimum spend, that amount can be as little as $0.10 per click or $1 per day. Here’s a breakdown of the minimum required spend for the most popular social media platforms: 

• Facebook: $1/day 
• Instagram: $1/day 
• LinkedIn: $10/day 
• Pinterest: $0.10/click 
• Twitter: No minimum 
• YouTube: $10/day* 
• Snapchat: $5/day 
• TikTok: $20/day 

 2. Reach 

Seven in ten Americans use social media in some form. Based on the most recent U.S. Census data, that translates to more than 232 million people. Few marketing channels can deliver this kind of reach, especially at the cost noted earlier. Furthermore, more consumers, especially younger demographics, are increasingly relying on social media as a primary research source for purchasing decisions. 76% of all consumers consider online reviews to be “important” or “very important” when evaluating a potential financial services provider, and 56% of Millennial and Gen Z consumers say they use social media platforms to gather information and/or receive advice on financial matters, with 24% explicitly seeking advice on buying a home. Given that Gen Z and Millennials currently account for one in three home purchases and that Millennials are the fastest growing segment of homebuyers, mortgage lenders must make reaching these key demographics a priority, thus making social media a critical piece of lenders’ overall marketing strategy. 

3. Effectiveness 

In a lead-based marketing approach, social media is one of several tactics mortgage marketers can use drive brand awareness and interest to move prospects down the funnel into the consideration and purchase stages. From an account-based marketing perspective, social media plays a down-funnel role in increasing prospect brand engagement, eventually turning those prospects into brand advocates. Regardless of which approach mortgage marketers choose, social media marketing’s effectiveness is evident. 53% of Americans report having more loyalty to brands they follow on social media, and more than two-thirds of consumers say they are more willing to choose a brand over its competitor after having a positive experience with that brand on social media. Moreover, one online lender reported a 39% increase in loan applications from leveraging mobile advertising on social media platforms. 

In terms of bang for the buck, few tactics outperform social media marketing. However, mortgage lenders do face considerable risk in leveraging social media to market their services, including compliance violations related to digital redlining and other mortgage marketing/advertising rules and reputational risk from unauthorized/unclaimed pages or fraudulent and/or hacked accounts. Utilizing automated monitoring tools can help mitigate the risk of social media marketing. 

For more resources on maintaining a compliant social media marketing program, check out our Social Media: Consumer Compliance Risk Management Guidance resource page.