17 February 2000
John Fairfax Holding's interactive division, f2, has signed a three-year deal with Westpac giving the bank exclusive home loan advertising rights ondomain.com.au, the popular real estate site.
Westpac will also get non-exclusive promotion of its financial services across the f2 network, including more than 30 sites such as drive.com.au, mycareer.com.au and tradingroom.com.au.
The deal follows a similar alliance valued at $5 million between the Commonwealth Bank and Internet portal ninemsn last August.
Financial details of yesterday's deal were not disclosed but f2 will receive a percentage of profits from any home loans originated.
Mr David Fite, Westpac group executive banking, said extending the alliance to cover other f2 sites was a possibility.
He said having people transact online would ``pay the [advertising] bills".
``The idea from f2's point of view is that we create a more compelling place to go [to buy a home] while we will use the alliance to make home loans happen," Mr Fite said. ``From this deal we hope a meaningful percentage of online home loans will come to Westpac."
Mr Fite said of Westpac's 180,000 online banking customers, only a ``small percentage" would also be online home loan customers.
``But we've asked people about their propensity to buy online and a mortgage is one of the more likely things people will purchase."
Mr Fite said research predicted that by 2005 up to 30 per cent of home loans would be made via the Internet.
He also said the alliance would not necessarily translate to a lower online advertising expenditure for the bank.
From the deal Westpac stood to attract a large number of customers over and above its current online customer base, according to Mr Chiko Wong of www.consult.
``Research has found that online home loans are quite separate from day-to-day Internet banking transactions which means a good number of potential online home loan seekers are not necessarily banking online," Mr Wong said.
``So, in a way, Westpac is short-circuiting the [online] experience gap."
John Fairfax is the publisher of the Herald.
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