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IQ News: ETrade Has Plans For $100 Million Ad Budget

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Armed with a $400 million investment three weeks ago from Softbank, ETrade next year is plotting a major branding push across all media totaling $100 million, a budget traditionally reserved for mega-categories such as automotive.
In addition, the Palo Alto, Calif.-based online brokerage will launch Destination ETrade this fall, an investment site designed to attract loyal investors. Earlier this month ETrade entered into a $25 million distribution and marketing deal with America Online in which it became one of four firms featured in AOL's Brokerage and Mutual Funds area.
Also, the company plans to choose its first interactive agency of record this week from among two West Coast shops, said Jerry Gramaglia, ETrade's senior vice president of marketing, sales and communications. Gramaglia, a former Sprint marketing vp, wouldn't name which shops were competing.
Fueled by a growing $1.5 billion market in online securities trading, industry watchers predict that competition for wired investors will become a fierce battleground, especially among online brokers Charles Schwab & Co., ETrade, Ameritrade and Fidelity Investments. Schwab, ETrade and Ameritrade alone could spend as much as $300 million in off- and online marketing next year, said analyst Scott Appleby, of the New York division of investment bank ABN Amro.
Gramaglia said that while ETrade's marketing plans haven't been finalized, "a significant portion" of next year's budget will be spent in online media. However, he warned "more banner ads aren't going to do it." Instead, he foresees ETrade entering into partnerships similar to its deal with AOL.
The company's offline media, handled by New York-based Gotham, will be more image-focused, Gramaglia said, but he declined to be more specific about the campaign.
Destination ETrade is being positioned as a financial portal of sorts with more research data, portfolio management tools and news updates that will be free to non-members; members pay for more elaborate features. The company's 500,000 members have already been converted over to the service, Gramaglia said.
The new service looks to be part of a larger repositioning plan to make ETrade more than just a place to make transactions. Appleby said Ameritrade is planning a similar service, due out early in 1999.