In yet another "no confidence" vote for themuch maligned banner ad, Charles Schwab & Co., San Francisco, confirmed rumors it is scaling back on Web banner buys for its online brokerage service in favor of longer term marketing alliances and sponsorships.
A Schwab spokesman said its decision to re-evaluate banner buys is part of a process for fine-tuning the company's online spending. "But to say we're absolutely abandoning the [banner] concept is not true," he stressed.
Recently, Schwab has been focusing on cutting more exclusive sponsorship deals, ever since signing a 3-year, multi-million dollar pact in March with iVillage to become the exclusive personal finance provider on its Armchair Millionaire site, the spokesman said.
Pamela Saunders, vice president of business development for Schwab's electronic brokerage division, has told IQ News in the past that the firm is not interested in buying buttons or banners on financial sites that play host to a bevy of online brokers. Saunders did not return calls requesting comment for this story. Instead of taking space alongside competitors, the company has been putting its name in front of certain niche audiences. For instance, the Armchair Millionaire deal will help Schwab reach women.
However, this strategy has been called into question by some who suggest that by trying to avoid associating with the cheaper Web brokers it runs a greater risk of losing out on potential new accounts. Still, Schwab has maintained a presence on Microsoft Investor and sources said it is renegotiating a deal to renew its exclusive sponsor position on Excite's Money/Investing channel. However, Schwab has been conspicuously absent from online mainstays such as CBS MarketWatch, Quote.com and The Motley Fool. On popular online venues such as America Online, it has declined to be part of the service's Brokerage Center, where companies including E*Trade and Ameritrade have set up online trading outlets.
If the banner ad is not the centerpiece of Schwab's online advertising, observers maintained, it's unclear as to whether Schwab has concrete plans for how to spend its fourth quarter online budget. Earlier in the year, Saunders said the company intended to maintain its heavy, year-round advertising presence on the Web and even up online ad spending by almost 15 percent. The stakes have been raised though, with its main rival, Palo Alto, Calif.-based E*Trade, launching one of the largest online campaigns ever to sign up 1 million new recruits to its Destination E*Trade service.