TREE
#Got it.
So on the first one, some of the things we're looking at, and I don't want to get too specific here because some of them are acquisitions so I won't go ---+ I will give some anecdotes, But one that's actually launching today or tomorrow believe it or not is auto insurance.
We're doing it through a partnership, and we're actually probably going to be marketing that directly in addition to cross-selling on our site.
The commercial mortgage business is one that is very broker-based with high middle-man fees, low transparency and the developers need to flip those every five years.
So we like that.
We're looking at every category of small business loans, and if you would just say small business it breaks down in probably 10 different categories of lending.
And then we're looking at some of the nichier areas, for example, could even go as well as helping builders find individual investors where banks are not available.
That's so-called hard money market.
We think that's interesting, although early.
We think life insurance may be interesting, but that's a long time away.
By the way, we will start all these insurance things as partnership so we don't have to distract from where we are.
In each of these categories, by the way, there are a number of acquisitions that could potentially be available at decent prices.
So that's the good ---+ it's a little bit of a flavor of it all there.
And the second one.
And to the second question which I believe was My LendingTree and marketing of My LendingTree product.
In January, we started some paid marketing on My LendingTree direct to the website as well as some app marketing on our legacy app.
<UNK> says the new app is fantastic, I highly encourage everybody to download it.
We will be scaling up our app marketing on that product in the coming weeks, so we very much look forward to scaling up our marketing on My LendingTree.
It's absolutely both.
So the way we like to think about increases is first off, you have got the size of the market growing, and I don't have ---+ if you look at our investor [ridge], it's that little bubble at the bottom and that's definitely growing which means there's a secular trend of lenders getting more of their volume from online.
Which just makes total sense.
We've talked about it before.
This is really last big category to move online, so you have that happening.
And then you have the lender, which by the way, is showing that lenders are increasing their demand so they're increasing their demand with us from that.
We're also seeing that lenders are increasing their wallet share with LendingTree, and we are really going after that hard.
We are basically going to lenders and saying what's it going to take to get more and more of your wallet share, and we do that based on a really great analytics platform.
We actually go in and tell the lenders where they can succeed, where they can't and much money they can make in each of their filter segments, and really going in and help them do that.
So it's definitely stealing wallet share, and it's definitely moving online.
And then you have this purchase refi change which shows that the off-line market is going down, so now they're going to shift even more money into areas where they can get volume.
Sure.
So actually we are seeing modernization happen in the first couple months.
And then quite frankly, it will tail from there for a period of time except for your sub prime folks you're going to see increase in the credit score and then they're going to be able to lower pricing that way.
And then for other people who obviously take action in the first couple months, they're going to have more needs continuing throughout their life as they buy homes and do other things.
But they're actually transacting fairly quickly, which gives us a lot of confidence that we can put together marketing campaigns after that.
Yes.
So every time we ---+ so first off, the engagement is still there, but you're going to have fewer alerts.
So you don't need to come back all the time unless we send you an alert.
So the new features we add and the new alerts we add, we're seeing it bring people back.
They're coming back not because they want to come play a game on My LendingTree, they're coming back because we sent them an alert that's actionable for them and then they can take action.
And we are both seeing a lot more customers taking action, we're also getting better conversion rates from our alerts to them taking action just by a number of blocking and tackling and ongoing initiatives through conversion funnels like we do everywhere.
But the other thing I would add is, one of the great things about this alert-based product.
You get wonderful customer satisfaction out of something like that, because you're not calling them or you're not touching them unless there's actually a real savings.
And consumers love it and now we're going to go start telling them about it.
With this bigger monetization we're going to start marketing, which I know has been a long time coming but we feel better about it.
We will start small and scale into it.
Yes.
So absolutely, I think it's possible and there has been great collaboration between the teams across a variety of marketing channels.
The great thing is they are fantastic at things like paid search, we are fantastic in things like display and some partnerships and things like that.
So we are in social, so we are sharing that knowledge across the Company so that we can leverage what they are great at, they can leverage what we are great at.
And that helps the combined companies, and we can also really focus the marketing efforts where we're going to get the highest payouts as well.
Buybacks we are there typically every quarter, we haven't bought a lot recently as <UNK> said.
We tier it based on price, and the prices ran up and therefore we didn't get any buybacks this year.
From a capital allocation standpoint, increasingly we are focusing on that.
I can't predict which way it will go, basically we're going to deploy capital in the most efficient way possible.
We are going to keep looking at leverage to make sure that we can do that.
And if it's not lost on me that when I think about it, the companies that perform the best over time are the ones that make smart capital allocation decisions.
Which means you buy back your stock when it's valued right and you use it for acquisitions carefully in way that you can get things that are accretive and try to do that very efficiently over time.
And we're there.
So I can't tell you which one is it's going to be, I can tell you we are going to make more acquisitions.
And one of the things that's really thrilled me is somebody working for the Company and seeing our Company be able to actually execute an acquisition and have it come in, diligence it, get the right numbers.
By the way, we've said no to probably 10-plus things recently, and we said yes to one.
So I think it shows we can buy the right thing and we can execute it the right way and integrate it the right way.
No we didn't, obviously we were in the middle of an M&A process and the rest was capital allocation and we wanted to make sure we had the right firepower there.
The CompareCards acquisition is a great example and model of the type of thing we want to look for, which is growing, is profitable, it's highly strategic, it complements our needs and the company and it has a fantastic multiple.
So those are the types of things we are looking for, and those can be highly accretive acquisitions.
We want to make sure we have the right amount of capital available there, and we are very, very happy with that one.
So we're seeing a slight ---+ so let's just clarify it for everybody.
That injunction basically says that we cannot do native advertising, which is basically writing an article and putting it out on the Internet.
We cannot do native advertising only through three ad networks that place those.
So while that caused short-term dip like we've talked about before, now we are doing direct deals where those ads used to get placed and the injunction will have a little effect but it will ---+ but it's diminishing over time.
You should also know the percentage of our profits that came from that native stuff, I don't know if <UNK> will talk about it, but it was not very large.
So it really hasn't had that much of an effect.
Obviously, we prefer it wasn't there.
It had a short-term impact call it in Q3, Q4 for our core business.
The team basically took the challenge and they have really blown up other marketing avenues, and our core business had a record month in January, CompareCards had a great month in January, neither of which had anything to do with native advertising.
So we feel like we would like to have it not there, but we have done really well with it (inaudible).
So another way to think about it is, we're doing fine with the injunction and we're still growing and business is good.
If we didn't have the injunction, it would be better.
All very, very good questions.
On the second one, it's really a channel thing.
So each marketing channel operates independently of another.
So you don't necessarily ---+ in our business it's really the direct marketing business.
So you don't really move money from one channel to another or from one product to another unless your getting more demand and supply and you losing VMM.
So basically you're always looking for VMM.
If we're getting a profitable ---+ if we're getting profit on anything we're running, we're going to keep running it.
So we're going to run My LendingTree ads, and when we run them stuff will fall to the bottom line.
But we will look at the My LendingTree ads not against all of My LendingTree, but just based on the volume that comes in from there.
So the organic volume and the cross-sell volume that comes through our site naturally will all drop to the bottom line, and we will evaluate the marketing based on just the volume that we are driving in.
By the way, that marketing is also ---+ there's another layer that you have to go which is you have to target different demographic segments and have different monetization ability.
So there is another layer of complication there that quite frankly because we're so good at marketing gives us a competitive advantage.
My reaction from December to now is obviously things did get a little stronger.
But in addition to that, when we were at Investor Day, we were not focused on updating guidance that we had just given, we were really focused on the long term things and we were obviously incrementally more confident in Investor Day and things came in a little better.
Fantastic.
Thank you all again for being here, and thank you for your very thoughtful questions.
As many of you know, I'm in the interesting position at this Company where I get to think of both as a CEO and as an investor.
As a CEO, I can tell you this is a fantastic Company with fantastic processes, hiring wonderful people who really get our core principals and I've never been more thrilled with that.
As an investor, I like to look at this and see what is the value of the Company and how do I believe as an investor.
And when I look back at what this Company has gone through over the last eight years, I feel very confident they can do anything.
First, we went through the financial crisis and people worried that we were going to get through that.
Second, we had a money-losing bleeding from owning a mortgage originator at the worst time, and we got rid of that; we made a lot of money.
Then people were worried about loan losses, we got out of that and we dealt with that.
Then people are worried about diversification, I think we proved that one.
Then along comes the fintech bubble and all these crazy valuations.
When that bubble starts to pop people thought we were going to pop, and obviously went right through that.
Then follow it up with personal loan crisis which had people worried, then the shifts from refinance to purchase.
And then lastly, whether we are going to be able to actually buy and integrate an acquisition.
We've come through, we've weathered every challenge.
I don't know what the next worry is going to be, but I feel very confident we are going to figure that one out to.
This is a Company that can weather the storm.
In addition to that, the industry is setting up exactly like we've said over the last 20 years.
It just took a lot longer, and we are perfectly well positioned in the industry.
And then last is our competitive position, where we continue to gain share against competitors, you can see that in public company revenue growth of us versus them, and you can see how we are continuing [bets with you].
So as a CEO, I love being part of this Company, and as an investor I have tremendous confidence.
And I hope many of you continue to come along with the ride for us which we think is going to be very exciting.
So thank you very much.
