IQ News: Schwab Deal Could Signal Greener Web Future




New York-based iVillage has struck an agreement for a 3-year, $5 million-plus sponsorship package with Charles Schwab, San Francisco–an encouraging development for Web publishers, who are anxious to prove they can compete with television networks and AOL for big-ticket ad deals.
Schwab has purchased rights to be the exclusive brokerage firm for the coming year on Armchair Millionaire (www.armchairmillionaire.com), a financial planning site launched in October. Jointly produced by iVillage and Intuit, Mountain View, Calif., the site will be promoted in both online and traditional media by Schwab, iVillage and Intuit. As part of the deal, the editorial staff of Armchair Millionaire, led by Lewis Schiff, founder of Worth Online, has constructed Investor Center, a co-branded service that tutors prospective Schwab clients on long-term financial planning. The site also contains community forums on such topics as retirement and investment tips.
In January alone, Schwab’s online business amounted to 100,000 new retail accounts and $10 billion in trading, said Pamela Saunders, vice president of business development for Schwab’s electronic brokerage enterprise. With half its business pouring in from the Internet and via computer software programs, the firm has been steadily increasing its online advertising budget, spending approximately $3 million in 1997 to build awareness for its online trading business. This year, Schwab will bring online ad spending to just under 15 percent of its total ad outlay as the firm continues to angle for new prospects, including investment newbies, Saunders said.
The Schwab deal signals the changing dynamic of online sponsorships over the past year. Other than AOL, which has leveraged its 11 million membership base to secure a crop of multi-million dollar commerce arrangements, electronic publishers have been striking five- and six-figure sponsorship deals tied to CPM, or cost-per-thousand, impressions. IBM shattered the model when it committed $1 million as sole sponsor and technology developer for this year’s NFL Super Bowl site. A key to brokering the Schwab deal, according to Robert Levitan, founding partner of iVillage, was the fact that a CPM rate was never discussed.
“The medium is maturing,” noted Levitan. “Companies that can figure out their niche can compete against mass media players like AOL and Yahoo.”