On the heels of record quarterly loan originations, LendingClub Corp. plans to increase marketing spend to test new channels in the second half of 2018, executives said.
As the company's personal loan products start to become more mainstream, LendingClub plans to test new marketing channels in its seasonally stronger second and third quarters, CEO Scott Sanborn said on a call to discuss second-quarter earnings. Management highlighted one of its main marketing messages: Using an installment personal loan product is a better way for consumers to manage debt.
LendingClub reported a record $2.82 billion in loan originations during the second quarter, up 31% from $2.15 billion a year earlier. The company drove a nearly 50% increase in applications year over year, driven partly by optimization of its existing marketing channels and successful tests pushing into new marketing channels, executives said.
Along with an industry tailwind of greater consumer awareness, LendingClub is testing broader and less targeted channels, Sanborn said. Given LendingClub's volume, the company can test dozens of new channels, partnerships and initiatives on a monthly basis, CFO Thomas Casey said on the call.
The digital lender logged $69.0 million in second-quarter sales and marketing expenses, up from $55.6 million in the same period a year ago. However, executives said the planned marketing increase will not cause a material change in the company's reported numbers.
"We spend a good chunk of change here," Casey said. "We don't expect this to be material, but it is going to be a little bit higher than maybe we would've expected."