Poised for IPO, Rocket Mortgage lead growth is slowing down
- Rocket Mortgage is set to go public.
- Growth has been strong but does plateauing lead growth mean tough times ahead for the home lender?
The group of lending-related businesses owned by Cleveland Cavaliers owner Dan Gilbert, including Quicken Loans and Rocket Mortgage, has filed for an initial public offering. The combined tie-up will be called Rocket Companies.
SPONSORED
Rocket Mortgage is the largest online originator of mortgages in the US, providing $1 trillion-plus in home loans since launching, with its market share jumping from 1.3% in 2009 to 9.2% in the first quarter of 2020.
But its lead growth is slowing down.
Since 2014, leads has expanded 80%. But that growth is slowing down. From 2018 to 2019, lead growth was only 1.5 % (from 19.9 million to 20.2 million).
Rocket has over 250 marketing team members in its in-house advertising agency focused on the client lifecycle. This team creates and executes marketing strategies to identify and reach target audiences, engage with interested clients, and promote the client experience.
Rocket also relies on its Core Digital Media business, an online marketing and client acquisition platform, to generate additional leads. It has invested considerable capital in its brand. Since inception, Rocket has invested over $5 billion in marketing, including over $900 million for the year ended December 31, 2019.
Rocket’s Core Digital Media is a key component to its growth strategy, generating sources of new customers, cross sell opportunities and revenue monetization through the sale of leads to 3rd parties. Core Digital Media owns and operates several marketing platforms, including LowerMyBills.com that connect clients with providers of home loans, auto loans, personal loans, and auto, life and home insurance.
Acquired in 2017, Core Digital Media enables growth for Rocket’s broader ecosystem by offering insight into the lead generation market and allows the company to introduce marketing programs designed to increase the conversion rates for online leads.
Rocket is particularly popular with Millennials and first-time home buyers with 75% of potential clients who access the platform coming from these two demographics