Guillaume’s blog

Financial services pay the most for prospective customers’ attention

July 7th, 2008

I was encouraged this WE to look into the cost-per-click of some financial services keywords in the U.S. using Google Adwords Keyword Tool.

As of the time of this writing:

“video cameras” costs you an estimated $3.14 per click,
“buy car” costs you $4.81,
“wireless” and related: ~$5.00,
“dsl” and related: ~$6.00
“real estate investments”: $5.47
“buy computer”: ~$8.

Now get this:

“buying mutual funds”: $12.66, “online stock trading: $18.06
”best credit card deals”: $25.94, “balance transfer credit cards”, $18.23
“auto insurance quotes”: $34.58, “insurance quotes: “$29.77″
“high yield checking account”: $17.81, “checking account rates”: $20.44
“mortgage refinancing”: $32.58, “home equity loans: $23.74

I know this is a very superficial research study, but there seems to be a pattern here: financial services firms are paying significantly higher than firms from consumer sectors for prospective customers’ attention.

What can we learn from it? IMO the cost per click is a function of

profitability of the related service offered over the average customer relationship duration, and
likelihood that the prospective customer who has clicked will subsequently actually buy the service online,

then my quick conclusion is that there is probably good business opportunities in online comparison services for financial services products, as well as in new financial services that leverage the Web and social networks to be cheaper and mass-market. Peer to peer lending is probably one of them.