what running shoes were to the athletic individualism of the '80s, the Internet is to the financial self-empowerment of the new century. With E*Trade, Goodby, Silverstein & Partners has found one of those enviable, rare marketing relationships comparable to Wieden + Kennedy's with Nike. Like Phil Knight, the sports-company's founder, E*Trade's Christos Cotsakos is a chief executive who believes in the power of advertising, invests heavily in it and values its role in defining what he hopes will be the dominant brand in a new industry.
Like Wieden and Nike, Goodby has created aspirational advertising that distinguishes E*Trade through an emotional bond with investors in a commodified category of some 150-170 companies.
"Fire your broker" is the financial-service company's equivalent of "Just do it."
"In the spring of '99, we knew online investing and the Internet was about to become a force. We could see it was becoming a lightning rod in the larger culture," says Michael Sievert, chief sales and marketing officer at Menlo Park, Calif.-based E*Trade Group. "To become a brand leader, we knew we had to be effective at seizing that consumer momentum; we had to capture the sentiment of empowerment."
That ambition may be best summed up in E*Trade's appearance on the Super Bowl, before more than 800 million viewers worldwide, last year. The Web company broke through the clutter of dot-com commercials by buying two spots on ABC's pregame show and two spots during the game. E*Trade, a brand many viewers had never heard of, dominated the commercial showcase.
Some of the dot-coms sharing the Super Bowl airwaves are no longer in existence, thanks in part to heavy ad spending. E*Trade also spent heavily—at one point pouring nearly half of its revenue into marketing. The difference with E*Trade? One answer may lie in last year's football extravaganza: The company enjoyed a 600 percent increase in net new accounts in the quarter after the Super Bowl, compared to the same period a year earlier. Why? A combination of solid marketing strategy coupled with funny, memorable advertising, work with attitude not usually associated with the financial-services category. After Goodby produced its first campaign last year, "It's time for E*Trade," the company became one of the top four most-recognized, blue-chip Internet brands as ranked by Opinion Research Corp.
"In four months, we built the brand," says Goodby creative partner Rich Silverstein. "The advertising wasn't just about preaching. It was about how E*Trade relates to you. Our spots go to the heart of the product. They work because the ads make sense, and E*Trade spends appropriately to their objectives."
Those objectives amount to nothing less than creating the Internet's first pure-play, world-class financial-services concern. Accounts rose from 91,000 in September '96 to 2.94 million in June. E*Trade is now the industry's fourth-largest entity in customer assets and number of accounts and No. 3 in trading volume.
The company developed its marketing strategy in three phases, extending its value proposition beyond online trading.
In 1996, E*Trade began building awareness in the online investing industry, with the little-noticed tag: "Some day we'll all invest this way." Next came Goodby's work, which focused on developing brand awareness. More recently, as the industry became more of a price-driven commodity category, E*Trade sought to pull away from the pack with a new emphasis on diversification. In October, the company unveiled its new marketing theme, "E*Trade. It's your money," to underscore its delivery of a wider range of products and services like banking and asset management. It now has customers in branded Web sites in Denmark, Korea, Japan, U.K., Sweden, Australia, New Zealand and Canada, and has launched a Chinese-language site.
"From the beginning, Christos had a very clear brand scheme. It started with a focus on trading and he's evolved it from there into banking and personal finance," says Silverstein. "I think they had a matrix and at the appropriate time introduced products and services. It's a lot like FedEx. They started with a basic message of 'cheapest, fastest' and then moved into things like small packages and envelopes and electrical devices."
That comparison is no coincidence. CEO Cotsakos is a former Federal Express executive who has borrowed from the delivery service's marketing strategy.
"Christos is a smart, tough, take-no-prisoners kind of guy," says Silverstein. "That's the special kind of sauce that makes advertising work. He's a CEO who loves marketing, wants it and wants it to work."
E*Trade's emphasis on purple and green in its communications, for instance, recalls the heavy use of purple and orange in FedEx's branding.
E*Trade was founded in 1982 as an electronic stock trading service for institutions. After Cotsakos joined in 1996, he took the company public and created its Internet brokerage operations. Like the Internet pioneers at America Online, the Vietnam veteran knew he had to advertise heavily in order to win the battle for brand awareness and early market share in a burgeoning industry.
Cotsakos, who has said "brand building was always first and foremost" in E*Trade's corporate development, hasn't been afraid to sacrifice profits in that pursuit. In fiscal 2000, E*Trade spent almost $522 million on marketing, more than 38 percent of its revenue. (More recently, expenditures have slowed. In the quarter that ended Sept. 30, E*Trade spent about $92 million, compared with $115 million in the June-ending period.) While competitors like Ameritrade and Charles Schwab were already operating online brokerages when E*Trade entered the fray, Cotsakos's aggressive, early tactics helped to create the perception of the company as an innovator.
E*Trade's near-saturation spending has also helped give it a kind of category ubiquity. In its efforts to help build awareness for the industry, the company has become synonymous with it.
"E*Trade really established the premium online trading brand, which is frequently cited along with Amazon and eBay," says Jason Lind, e-finance research analyst at U.S. Bancorp Piper Jaffray, a leading growth company investment bank and a subsidiary of Minneapolis-based U.S. Bancorp. "They do these blind tests which find that half the time people see an online trading ad they think it's E*Trade. As long as other people continue to advertise, they can just draft on to that message."
E*Trade has used that brand equity to expand into new businesses. The company got into banking through the acquisition of Telebank this year. After retiring that name in May, the company rebranded it as E*Trade and used the teaser line, "Bankers, your brokers should have told you," from the Santa Monica, Calif.-based agency Big Honkin' Ideas.
"The E*Trade brand itself is very unique," says bank representative Debra Newman. "While we haven't adopted quite the irreverent tone as the E*Trade brokerage uses, we do share the same personality and edge. We use a sense of humor in an industry where that seldom happens."
E*Trade's move into banking helps offset stock market volatility and attracts a larger share of the wealth of its customer base. Customers of the company's brokerage operations tend to be younger and have smaller balances in their accounts than those at Charles Schwab.
That may account, in part, for the down-to-earth imagery and scenarios in Goodby's advertising.
"E*Trade feels like the common man with situations everyone can relate to," says Silverstein. "Schwab is Madison Avenue with glitzy celebrities like Ringo Starr and high-price athletes."
Therein may lay the challenge for Silverstein and his creative troops as the edgy upstart increasingly attains institutional credibility.
Just ask Nike and Wieden + Kennedy.
"How do you keep the brand's status over time? You don't do the same thing over and over again," Silverstein muses. "You have to keep evolving the advertising. Nike did it the right way for 10 years and then lost its way. You constantly have to stay one step ahead."