Truth In Advertising: Grey And E*Trade

By SuperSpy 

E*Trade has a had rough time of it having reported huge losses related to investments in risky mortgages in November. With the addition of a new CEO, Donald Layton, stock prices rose slightly the other day. CNN Money reported that:

“So far, 2008 is shaping up as a much better year for Etrade (ETFC) and its investors than 2007 was. The company has resumed adding customers after 70,000 users – many of them among Etrade’s most lucrative accounts – fled late last year amid bankruptcy rumors. Since then, the company has brought in a deep-pocketed outside investor, bid adieu to longtime CEO Mitch Caplan and rolled out a plan to slash expenses while boosting marketing spending.”


Part of their resurgence could be attributed to the Super Bowl spots by Grey featuring the trading baby. You may not have liked them, but tt should be noted that the week after the Super Bowl (February 3rd, 3008), the company posted a “32% increase in newly opened and funded brokerage accounts the week following the Super Bowl” [source]. Hell, advertising is powerful.

However, did you see the print ads for E*Tradethat ran in the last New York Times Play magazine that claims the company has added a 1000 new accounts a day with this caveat in small print – “new accounts claim based on internal E*Trade financial metrics for average daily gross new accounts between 1/1/07 and 12/31/07?”

Fortune also provided us with a bit of a clearer picture:

“E*Trade also added 16,000 net new retail accounts in January. While those gains pushed the company’s end-of-period account rolls up 0.3 percent from a month ago, they show that E*Trade was adding just over 500 net accounts daily during the month – just half of the thousand daily account openings the company pointed to in its popular Super Bowl ads.”

Truth in advertising, yup. Advertising is full of shaky data, yup. Apply it where you want. Slap it on and see if it sticks. We’re sure that the company has some sort of metric for making it a full 1000 accounts a day, but here’s a few questions we want to pose to you readers:

Do you think that Grey knew that the company was fudging the numbers with shaky accounting? We say no. However, is it an agencies responsibility to check they are “truthfully” advertising their clients? Does it matter more or less that this is a financial company?

Just something to chew on this afternoon…