Crunch time

Interest rate hikes and a cost of living crunch are driving huge demand swings as Australians scramble for better mortgage deals and cheaper energy contracts with spikes in searches for credit card balance transfers, and a surge in savers bidding to capitalise on higher interest rates.

“We’re seeing increased demand for anything that relates back to household expenditure,” Finder Australia CEO Chris Ellis told Mi3. Across a total pool of circa 2.5m monthly site visitors in Australia, comparing March/April to August/September, the firm recorded:

• Organic home loan traffic up 23 per cent, almost entirely refinancing.
• Organic traffic for energy deals up 103 per cent.
• Organic traffic to savings accounts up 93 per cent.
• Term deposit traffic up 144 per cent.

Ellis thinks the cost of living squeeze presents opportunity for brands to acquire high value customers – but said marketers are missing growth by going too short on campaigns with limited planning flexibility, turning off spend when fixed budget thresholds are reached. Instead, he thinks they should keep sending based on conversion if growth is the objective. Which means marketers should talk to the CEO rather than the CFO, reckons Ellis.

“The discussion that CMOs have at board level about capital allocation matters hugely. The more conversations the CMO is having with, quite frankly the CEO rather than the CFO, the better, because in that room it is capital allocation decisions – what do we invest where?” said Ellis, a CEO that signs off “tens of millions of dollars” in Finder’s own annual media spend.

“There's normally more asks than you can fund, so you've got to make choices. There needs to be a very strong view so that the capital gets allocated at the right level in the first place.”

Too few CMOs are having those conversations, he suggests, with media buyers in turn hamstrung.

“Some of the discussions are basically, ‘oh we’ve burned through the budget and it’s the tenth of the month’. We say, ‘great, you want more high value customers!’ And the response is, ‘er, no, we planned to spend that much’. Frankly, that can be frustrating. I think there is an onus on teams whether in-house or otherwise to have the flexibility to adapt and also measure valuable customers versus those they may be getting from other performance or brand campaigns.”

Walk vs. talk

If Finder’s marketing team came and asked for more budget in a similar situation, how would he react?

“We’re very flexible. Our paid media is largely in-house. I typically won’t agree fixed budgets, we look at effectiveness,” said Ellis.

“If it's a paid search campaign, what is the return on ad spend – for every dollar I spend, what do I get back? On a weekly if not daily basis I'll be chatting to our fantastic CMO about flexing that: Where's the overall business; what is the shape of the P&L looking like; how are we doing margin-wise; can we go a bit harder, can we not? Within reason, we’re not working to a fixed budget. It's not a 'stop'. It's an efficiency discussion. In other words, what margin am I getting from that investment?”

Ellis said brand ads are “more planned and pre-booked, because that is the way the media is sold”. Finder is booking less TV advertising in recent years in favour of search and social, but he indicated Finder may now increase investment: “I’m a big believer in spending more in economic downturns. It’s a terrific time to build a brand, generally your dollars go further.”

Will he back that up with more marketing budget?

“I’d like to. A lot of our media spend goes into performance channels – we're eating our own dog food – and we’re a big advertiser on Google, Facebook and increasingly TikTok. But we are increasing our spend year on year – and as long as that is making a positive return, then we’ll keep going.”

Quick vs. dead 

Finder’s performance media is managed in-house, via a team of seven, part of a broader in-house set up of 14. Ellis claims the firm has built a "centre of excellence" before realising that could backfire. "I don't want to go too heavy, because I don't want any of your readers pinching any of our team, but they're good,” per Ellis.

He said Finder started building in-house capability in 2015, primarily for the data aspect, speed of optimisation and deeper insights over cost efficiency.

Sharper insight – provided brands are fast to feedback performance data – means better campaign performance for advertisers and tends to lead to higher value customers, which means rate negotiations go beyond lowest price.

“The best [advertising] partners are those that can open up visibility through the full cycle. If a car insurance brand can share with us how many people [exposed to content or ads on Finder] go on to purchase, what else they purchase and the likely lifetime value, then we can optimise to bring a higher quality customer to them. Those partnerships do well. It becomes a value of the customer discussion rather than a $9 or $10 [CPX] conversation. It’s about what value do they create,” said Ellis.

“But there needs to be a data exchange; we need that intelligence back through their data as close to real time as possible. That is the most important thing we look for.”

Consumer Data Right: Plan now

Ellis sees major growth potential arising from Consumer Data Right legislation, a Treasury-backed initiative stemming from the Open Banking Review. CDR lets consumers transfer their transaction, usage and product data – and opt-in to allow brands and third parties to also share it – via a regulated system with the aim of making it easier to compare services, get better deals and more easily switch providers. Banks are the first sector governed by the legislation, followed by energy and telco, with the legislation opening up significant new approaches to targeting and genuinely personalised products and services. Finder is starting to experiment with offers like $50 cash-back into Finder wallets (which Ellis said operate as a “personal finance manager”) for signing up to an energy plan that best matches their consumption.

Down the track, Ellis thinks CDR could open up major opportunities for tailored products and services for brands with the agility and appetite to better match demand, supply and product shape.

“In the future, it might be that people log-in to Finder, connect their bank account through CDR – it is government backed, so hopefully that will offer people some reassurance – and we can see that you subscribe to Netflix. Maybe we can push a Stan offer to you,” said Ellis.

“Energy is interesting because the CDR energy framework will allow sharing of household meter-level data. If customers share that with us, we can better match a plan."

Ellis thinks the media marketing sector has failed to fully grasp the potential depth of personalisation opened up by CDR. But he said the winners will be those trusted by consumers to share and use their data, and who can build out the “data smarts to ingest and use it in a way that drives a genuine customer benefit”.

“I think over time some advertisers will have range and customers will have more control over their real first party data. A new area for us will be how to build more trust, build a brand that customers feel comfortable to share that data with us.”

News Corp: Staying power?

Ellis thinks niche expertise – it has circa 80 writers locally – will shield the platform against incoming competition, with the likes of News Corp now encroaching on its turf via a price comparison site, News Compare.

“There’s always competition,” he said. “How it pans out with News Corp will be interesting to watch. Is this a play to monetise their existing audience, or are they looking to go outside of that reach? They've have a lot of reach on and offline … so it’s a natural extension to have a comparison play attached to that.

“From my experience though, over time you need real subject matter experts and you need to scale a pretty big team. News Corp and Nine are the poster children for wooing industry partners … though I suspect having beaten the drum for brand dollars it’s quite a hard sell to now go for both sides [brand and performance],” added Ellis.

“They've certainly got the means and the firepower to scale, if there are green shoots of success. But larger media companies – I know, I've worked at a few – have a habit of things being flavour the month … and then maybe not. Look at how many media companies launched travel businesses over the last few years, so let's see.”

Finder, traditionally “premium performance at scale”, per Ellis, is making a counter-offensive into traditional publisher turf.

“Our fastest growing business line is branded content. We see a lot of growth on the brand side. Also, particularly within our app, we're starting to have more engagement conversations with brands. Members who have taken up a credit card, for example, how can we stay in touch? Can we cross-sell them? Doing things that increase the lifetime value of those customers as opposed to the one-off sale, cheerio repeat-type cycle.” said Ellis. “That changes the type of conversation we’re having with brands.”

What's next: EVs, crypto

The crypto market has tanked by US$2 trillion with the end of money printing by central banks – leading to some barbs in the financial press for Finder founder Fred Schebesta – but Finder sees long-term growth beyond price speculation. While it has crypto trading and storage functionality within its wallet, Ellis thinks the bear market will ultimately usher in decentralised utility.

“Our long term thesis is ‘we believe’,” he said. “We are very deep on crypto. The technology that underpins blockchain is going to enable a lot of innovation: the way in which we buy and sell things, title transfers, for example, how you exchange contracts – that is somewhat deeper than buying or selling Bitcoin. When we say ‘the market has gone off’, I think we're really referring to pricing, pressure on investment classes. So I'm long on the promise of the technology. It's still a bet, but leaning into that is an explicit part of Finder's longer term strategy.”

Electric vehicles present another opportunity. Finder is broadening its capability to capitalise on massive latent demand – carmakers such as Kia suggest they have racked up 30,000 inquiries with barely a handful of units in the country.

Given the convergence of the energy, transport and telco sectors as that transition takes shape, Ellis spies broader opportunity.

“We see that thread coming and we’re starting to build up a breadth of [electric vehicle] content alongside our broader energy content. It’s a longer burn, but you have to skate to where the puck – or in this case the plug – is going to be.”