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The MSOIA Video Series with Mediatel: Abba Newbery: The truth of the category

"The emotional truth of the category is anger and frustration and stress. So all we did was play into that," Habito's CMO Abba Newbery explains in Episode Three of Making Sense of it All.

Newbery reveals that Habito, a five-year-old mortgage broker, seeks to be authentic in its marketing by confronting negative emotions involved in buying or renting a home. This is in contrast to incumbent brands in the category that portray "happy people in their happy homes" in their ads.

In this interview with Brian Jacobs, partner at Crater Lake & Co, Newbery also reveals:

  • Habito founder Dan Hegarty "doesn't like ads" but was influenced by Tango's classic "St George" ad

  • The brand spends as much as 70% of its media budget on TV

  • Using TV has enabled Habito to reduce its customer acquisition costs by 75%.

Watch the video below or read a full transcript further below

Making Sense of it All is weekly video interview series by Mediatel News in association with Crater Lake & Co. Each Tuesday, we publish interviews with the industry's most thought-provoking marketers, agency executives and research thinkers to find out how people working in media can make sense of this ever more complicated and fragmented ecosystem.


BRIAN JACOBS: Habito is breaking the mould, I guess it's fair to say, when it comes to mortgage marketing – 'making sense of it all' really for house buyers. What led you down this approach? What convinced you that people want simple in a world that historically has been complicated? Money is kind of complicated. What led you down the path of going: 'what we need to be is simple'?

ABBA NEWBERY: Yeah, I guess that is the founding principle of Habito as a business, as well as how we approach our marketing.

Habito was founded by a guy called Dan Hegarty who found the process of getting his first mortgage absolutely terrifyingly complex... [this is] someone who had worked in fintech – a very intelligent guy. It's opaque, it's bamboozling and, most importantly, it's the biggest single investment most of us will make if we're fortunate enough to get on the housing ladder or, even with our rent, it tends to be the biggest single outgoing that leaves our bank account every single month.

So to not understand the ramifications, to not understand the process, to not understand the best offers out there, doesn't seem fair. And actually, when you roll it all up, it's an enormous problem. Because of that lack of understanding, most people in the UK, we found out, were spending on average £279 too much on their mortgage a month. That's a lot of money when you roll it up over a two-year, five-year, 25-year, 35-year process. We wanted to fix that and make sure people are paying the right amount for their mortgage.

JACOBS: Given the business opportunity and the idea that you've come up with, how did you go about translating that into creative and media strategies? Was it a hard sell internally? Did you have to sell this to your board? After all, the approach you're taking is not an approach that most other mortgage providers take, is it?

ABBA: No, I guess not. I've got a slightly long-winded answer to this because that's a multi-faceted question. Our first approach was to look at our purpose as a business. A lot of people talk about purpose-based marketing and our purpose was, as written, to set people free from the hell of mortgages. That felt like quite an interesting creative platform.

Then we very early on approached Uncommon Creative Studio to see if they were interested in working with us and the very brilliant Lucy Jameson asked a super interesting question up front to Dan, the founder. Often, you know, founders are more intrinsically linked to the marketing idea and the creative output than a CEO would be of, you know, a big FTSE company.

She asked Dan: "what's your favorite ad?" And he's like, "I don't like ads." And then we sent him off for a weekend and we're like, "any time in your recent experiences tell us the ad." The ad that he picked was blackcurrant Tango [St George, created by HHCL + Partners, shown below] – I don't know if you remember this ad but: French exchange student writes to the CEO of blackcurrant Tango and says, "I'm not really sure about your blackcurrant Tango." And the CEO goes nuts. He strips off all his clothes, he marches to the white cliffs of Dover, he essentially calls war with France, and there's harrier jump jets.

That was super interesting because that's when we really understood that anger was an emotion we could tap into.

The next thing we did was go and talk to customers. We had some very early stage scripts and we were like, "we're thinking about doing this thing called 'hello Habito', where we descend you into the hell of mortgages and then we're going to resolve it'".

Customers were like, "you're completely mad, but yes do it. Do it properly." Because this is how we feel when we feel angry: we feel bamboozled, we've got no idea what's going on. We know that we're being ripped off, it's full of jargon, it's incredibly stressful.

So we just played to the truth; the truth of the founding principle of Habito, which is Dan founded Habito because he got cross over his own mortgage application. And that's the way customers feel.

Most of the marketing truths that you see around mortgages are like happy homes, happy people in their happy homes, happy horses... and that's actually not the emotional truth of the category. The emotional truth of the category is anger and frustration and stress. So all we did was play into that.

I guess the last part of your question; 'was it difficult to sell in?' Not really. When we were so true to our purpose as a business, and so true to what customers were telling us. What we did do was bring everyone on the journey with us. Everyone at Habito is a stakeholder, everyone who works at Habito owns shares in the business, so we had an open-source creative process.

Poor Uncommon (bless them), they were incredibly helpful in this but every single week, in our all-hands meeting, I would trail the progress towards making our first TV ad which ended up with the characters you see in our TV ads, '[they] are all inspired by people who work at Habito. Our VP of engineering picked the music. It's very much the kind of the collective, creative force of Habito, inspired by Uncommon, rather than 'the ad from the marketing department'.

JACOBS: It's an interesting approach; the idea of being a collective and everybody being involved is very appealing. Is it working in the market? Are you doing well with this?

ABBA: We're doing incredibly well. When we first put it on air we almost had to pull our TV campaign. It was so successful. It's been incredibly successful for us in terms of driving brand fame and traditional measures like advertising awareness.

It's equally been incredibly helpful in terms of driving down our acquisition costs. So often, I think, when you're our size of business, you look at a TV campaign, we spend probably 60%-70% of our money on TV. You think, "I can't afford that!" or you end up going into direct-response TV because you're scared of the acquisition costs.

What we find is that we might have a spike in the month that we're on TV, but then after that everything gets more effective. Within the first three months of going on to TV, we've reduced our acquisition costs by 75%.

A lot of what you get in the PPC world is, we might be on Page One of "mortgage broker", but if HSBC are above us or Nationwide are below us they're the brands with the big awareness, they're going to get the click-through, not us. So understanding that there was an absolutely linear relationship between brand awareness and PCC performance was really a game changer for us.

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