| 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.
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.