Nearly half of potential reverse mortgage borrowers say they learned about the loan from television commercials. Considering this notable fact, it’s no wonder the industry’s leading lenders are channeling serious ad dollars toward television in an effort to reach consumers.
TV advertising in the reverse space is nothing new. Commercials featuring Fred Thompson, Harry Winkler and Robert Wagner have garnered attention over the years—convincing some to learn more, inspiring others to poke fun, but effectively educating viewers about what, exactly, a reverse mortgage is.
While the medium isn’t new, the message certainly is. Gone are the days of the “call for cash now” campaigns. With a revamped product geared toward the financial planning set, lenders are aiming to teach consumers how a reverse mortgage can be an important part of a smart retirement plan.
Collectively, the reverse mortgage commercials airing on television right now have a substantial impact on the industry. Through the use of such a visible medium, top HECM lenders are helping shape public opinion, guiding the product into the future and, hopefully, toward the mainstream.
New on TV
Several lenders are in the process of launching new TV ad campaigns. Among them, of course, is AAG, which made sizable waves earlier this summer when it named Tom Selleck its new spokesperson.
Selleck will star in a series of commercials currently in the works that feature the new tagline “Bringing stability to your retirement.” AAG’s Chief Marketing Officer Teague McGrath says the campaign aims to explain how HECMs can be a part of your retirement plan.
“Traditionally retirement advisors and others talk about the three legs of the retirement stool: savings, Social Security, and a pension plan or 401k. We want to introduce the idea that because of longevity and increasing medical expenses and retirement costs, that retirement stool is wobbly,” McGrath says. “We want people to add a fourth leg to that stool, which is home equity. It’s the home equity chair—it provides more stability, more comfort and more security for your retirement.”
In the spring, AAG released a commercial featuring academics and professionals explaining the loan’s benefits, a sharp departure from the company’s finely tuned spokesperson model. McGrath says they’ll continue running this campaign in markets where it has proved effective.
“It offers an endorsement from real people, people who are independent from the lenders or the industry and who have no financial interest in pitching,” McGrath says. “These guys were all professors or doctors and they had all done their own research. We thought it was really effective.”
Other lenders, like Finance of America Reverse and Liberty Home Equity Solutions, have completely abandoned their former spokesperson approach.
Back on TV after its transition from Urban Financial of America to Finance of America Reverse, FAR has launched a campaign with the tagline “It just makes sense.” The spot, airing now on national networks, features active seniors going about their day, offering facts about how a reverse simply makes sense to help bridge the retirement income gap.
“We wanted to create a campaign that was clear, concise and drove home a message about what a reverse mortgage would do for an individual consumer,” says Tom Evans, FAR’s vice president of marketing. “We stepped away from the spokesperson model because of the expense, and to see if we could bring different messaging to the consumer and still gain that level of trust without borrowing it from someone they already know.”
Liberty, which once partnered with Robert Wagner to promote the product, has also turned to seniors to convey its message. The lender just announced the release of a new national campaign featuring real stories from Liberty customers.
“We thought that our customers could probably tell our story better than anybody else,” Liberty President Mike Kent says. “Our tagline is ‘Changing lives.’ It’s all about our customers, all about the seniors.”
The Message Matters
Reverse mortgage lenders may have a tougher battle to fight when it comes to marketing campaigns. According to McGrath, they not only have to educate people, but they need to address the negative perception—all in a 30- or 60-second spot.
“Most marketers say, ‘Here’s the product and here’s why you should buy it.’ It’s a two-step conversation. Well, for reverses you have to work backward. You have to start with, ‘This is why this product is not a bad thing,’ and address the negative perception, and then get to why they should buy it. So you are taking three steps to get to the same place, but in the same amount of time, which is relatively restrictive,” says McGrath.
A spokesperson can help you do that quickly. They can get you credibility from the start, and that’s why many people use a celebrity spokesperson, to leverage their credibility to get credibility for the product. That’s why it has worked particularly well for reverses. Some people don’t like celebrity spokespeople and some people love it, but that’s the necessity of it.”
Whether you employ a spokesperson or not, all lenders agree that it’s important to put forth an impactful yet responsible message.
Kent says a lot of research goes into the creation of a campaign. “We have an extraordinary amount of continuous feedback from our customers every month that we really examine,” Kent says. “That helps us craft our message. We want a creative piece, we want it visually appealing and we want it to reflect our values as a company. We want it to be aligned with how we view the intent of the HECM program.”
McGrath says AAG also culls a lot of research when designing a new campaign. “We take a close look at our best-performing spot and pull it apart to try to determine why it worked so well, and we use that as the baseline for the next one,” he says. “We use a lot of market research to get an understanding of people who don’t get a reverse, why they didn’t move forward and their perception of it. We also get an understanding of what seniors use a reverse for and incorporate that.”
HUD guidelines also play a part in the message lenders put forth.
“We need to be conscious of regulatory requirements and what you can and can’t say and what they are frowning upon. They don’t want you to promote a luxurious retirement lifestyle, the idea that you can get a reverse and go to Vegas or sail off into the sunset. We have to show responsible images of getting a reverse, like paying bills or medical costs.”
For many lenders, the focus seems to be on educating viewers, not selling to them.
McGrath says that as the largest lender with 25 percent market share, AAG assumes a lot of responsibility on this front. “Our future is not in continuing to grab market share from our competitors. We have to grow the pie and increase awareness and acceptance.”
Liberty is also toning down the sale in their new campaign. “I think one of the big messages we want to get out there is that we’re not selling loans, we’re simply trying to educate people,” Kent says. “We educate people, we inform them, and if they decide a HECM is right for them, we hope they choose us. That’s the message we want to get across.”
A distinct part of most reverse mortgage commercials is a time-sensitive call to action. This direct response model has drawn ire from skeptics who criticize the industry for its use of what they deem to be underhanded, late-night advertising, but seasoned reverse marketers point out the necessity of this approach.
“The reason we do that is because it works,” McGrath says. “It’s a way to track your advertising performance and make it more effective, rather than just doing brand advertising.”
“‘Call now’ is ‘call now’ because people recognize it,” says Evans. “It’s an effective means of connecting with a consumer.”
Evans says negative reactions to the industry’s direct response model shouldn’t be a factor. “I think that as long as the commercials are handled tastefully and the look and feel of the commercial is respectful and professional, we don’t have to worry about being lumped into that particular category… There’s a sense that we are shilling something when in fact we are doing the opposite—we are bridging the gap between the people who need a loan and the people who can provide it for them.”
McGrath says he’d like to see the industry move past this model. “We’ve all been stuck in this niche. It might reduce or diminish the reverse mortgage industry, but none of us has quite dared yet to just do brand advertising in the hope that that will float the boat, because you just can’t track it.”
The big budget of a major bank or financial institution would certainly help matters, says McGrath. “We need more brand advertising and bigger production values. If someone like Bank of America would do a reverse commercial, that would be amazing.”
TV marketing for reverse mortgages continues to evolve, and it will be interesting for many industry observers to see the impact of these latest campaigns over time. While each lender has assumed a different approach, their collective message has a definite influence on public perception.
“Even beyond how it functions for each individual company, the recognition of the product and the brand on television resonates respect for the product,” Evans says. “The important thing is to continue to get the gospel out. The advantages to the bulk of consumers who can get the loan are so numerous and so exciting and we want people to have an opportunity to know what’s out there.”