| By Jim Bruene on May 11, 2007 1:05 PM | Comments (2) |
After posting yesterday about the apparent traffic spike at Prosper (here),* I ran across this ad this morning at BankRate.com (here). Prosper's excellent landing page is shown at the end of the post.
I've seen Prosper advertising a bit on Google (here), but this takes the lender's marketing to a whole new, and expensive, level. At BankRate, a site littered with 5% APY come-on's, this orange 12% rate offer will attract a lot of attention. But given the typical acquisition costs of $100+ for advertising at BankRate, it will be tough for this to pan out from an ROI perspective. With Prosper's 1% loan fee plus 0.5% servicing charge, it would take roughly $7,000 in lending volume per new customer to break even in the first year, if acquisition costs average $100.
But after visiting with Prosper's founder, Chris Larsen, at the recent Net.Finance conference, I have a renewed respect for what they are doing. We're working on a Prosper 2.0 report, as a followup to last year's initial look at person-to-person lending (here).
Prosper landing page after clicking through the above BankRate.com banner ad
* Compete told me they are looking closer at the data to see if there were any anomalies in the latest estimates for Prosper.com traffic.
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Jim, good catch there. That is expensive, although it will buy them some branding in the short run.
Prosper is still a pretty young site. I think they are just trying to build the lender base right now.