A pioneer of online stock trading, E*Trade Financial Corp., spending heavily on advertising that used irreverent humor, established itself in the minds of consumers during the 1990s. As long as the stock market and economy were booming, this marketing approach proved quite successful. That all came to an end in the early 2000s as the economy stalled, the dot-com bubble burst, and the stock market collapsed. People who dabbled in the market with their online accounts grew cautious. Faced with a severe erosion in business, E*Trade retrenched, bringing in new leadership that slashed the advertising budget and diversified the company’s product offerings. When the stock market rebounded in 2003, E*Trade initiated a change in marketing strategy, hiring Minneapolis-based Martin/Williams Advertising to handle the advertising account. The agency developed the ‘‘Why Wouldn’t You’’ campaign, which began in February 2004.
The new campaign featured a pair of television spots that repositioned the E*Trade brand while specifically promoting the company’s mutual fund and mortgage products. Print elements, direct marketing, and in-store promotional pieces also played a part in the effort, which was slated to spend $90 million over the course of the year.
Only weeks after the ‘‘Why Wouldn’t You’’ campaign began, however, E*Trade changed marketing heads. Although Martin/Williams soon lost the account, the campaign it created succeeded in helping E*Trade to add some 372,000 new accounts, significantly grow its mutual fund and mortgage business, and increase its overall assets by 35 percent over the previous year.
E*Trade essentially invented online trading in 1991. As the economy soared in the second half of the 1990s and Internet ventures became the darlings of Wall Street, it enjoyed phenomenal growth. E*Trade spent heavily on advertising, about $140 million a year at one point. Like another newcomer in the brokerage business, Ameritrade, E*Trade used irreverent humor to establish its brand and appeal to a younger demographic, suggesting that stock trading was like playing a game while mocking traditional stock brokers, portrayed as stodgy and being interested only in customers who had already made their fortunes. The culmination of these free-spending days for E*Trade was a 2000 Super Bowl television spot that featured a chimpanzee and the text ‘‘Well, we just wasted 2 million bucks. What are you going to do with your money?’’
Soon the dot-com bubble burst, and E*Trade was hurt like all the other Internet companies. And because the economy collapsed as well and the stock market tanked, people no longer saw stock trading as a game. Even consumers who harbored no desire to play day trader were hurt, as their 401(k) accounts and mutual funds suffered major losses. E*Trade lost almost half its customer base and in response slashed its ad budgets. Moreover, there was little money to be made in stock transactions themselves, prompting old-line firms to get out of the business. In early 2003, following a corporate shakeup, a new CEO was installed and E*Trade looked to revamp its business model. To mitigate the risk of becoming a niche player in the volatile online stock trading niche, E*Trade looked to diversify—an effort that was actually under way—moving into such areas as institutional trading, market making (acting as middleman in stock transactions), mutual funds, banking, lending, mortgages, and stock plan administration services. Along with adopting a more conservative, product-centered strategy, E*Trade also decided to reconsider its advertising. E*Trade’s advertising account, now estimated to be worth $35 to $45 million a year, was put up for review with five agencies participating. IncumbentGoodby, Silverstein& Partners, responsible for the Super Bowl chimp spot, opted not to participate. In October 2003 Martin/Williams emerged the winner. The new agency was charged with the task of repositioning the E*Trade brand as a safe haven for serious money. At the same time, E*Trade wanted to take advantage of an upswing in the stock market and promote its trading division. While humor would remain a key element in the E*Trade approach, the company looked to avoid the pure zaniness of past advertisements.
Martin/Williams’s first task was to determine the target customer for what would become the ‘‘Why Wouldn’t You’’ campaign. The agency zeroed in on self-directed investors, the kind of people who mistrusted the traditional financial companies, perceiving them to be controlling and unapproachable. Although Morgan Stanley, Goldman Sachs, Merrill Lynch, and the like were now preaching ‘‘partnership,’’ the consumers that E*Trade targeted were somewhat skeptical of this pitch, especially in light of recent Wall Street scandals in which some of these very same firms had knowingly sold marginal stocks to smaller clients while saving the prime issues for themselves and favored customers. Starting with the selfdirected investor, Martin/Williams narrowed this target audience into what it saw as three focused subsegments, which research indicated was responsible for more than 60 percent of all brokerage accounts, online banking, and mutual fund investing. At least on the brokerage side, E*Trade and its online rivals were also ‘‘targeting a warier and more tech savvy customer than the newcomers who helped set the heady tone for the online broker industry in the 1990s,’’ according to Kate Fitzgerald writing in American Demographics, eschewing ‘‘the soccer-mom day trader making a killing in her kitchen during the late 1990s’’ in favor of ‘‘the most active and experienced traders who generate the most profits.’’
E*Trade’s most direct competitor was Ameritrade Holding Corp., which had pursued a similar irreverent, free-spending marketing approach during the 1990s. Ameritrade continued to promote its brokerage services through humorous television spots. Shortly after Martin/ Williams won the E*Trade account, Ameritrade launched its ‘‘Good Idea. Bad Idea’’ campaign to tout its flat pricing approach and other benefits. In one spot a man getting in a New York taxi said, ‘‘One flat rate, right? L.A. please.’’ ‘‘Flat rate pricing,’’ explained a voice-over. ‘‘Bad idea for taxis. Good idea for online trading.’’ Another competitor in this sector was Fidelity Investments, which at the time was promoting its ‘‘active trade services.’’ Taking a more emotional approach, this campaign featured a TV spot in which a man appeared to be a high-powered investor or fund manager executing offers from his well-apportioned office only to have it revealed, once the door was opened, that he was at home. Other online trading rivals included Charles Schwab & Company and TD Waterhouse Investor Services, Inc.
In its new businesses, E*Trade faced competition from numerous angles, as a wide swath of companies were positioning themselves as one-stop shopping centers of financial services. It was not just firms like Merrill Lynch, Goldman Sachs, and Citigroup subsidiary Salomon Smith Barney that E*Trade had to contend with in this arena. There were also a multitude of insurance companies, banks, and even mutual fund companies, such as giants Fidelity Group and the Vanguard Group, which also provided stiff competition.
In keeping with its changing business model, E*Trade looked to evolve its marketing message and brand positioning. Because the targeted self-directed consumer exhibited an antipathy for old-guard financial firms, which the consumer saw as primarily interested in feathering their own nests, E*Trade wanted to portray itself as a sort of consumer advocate, one that was looking out for the little guys and offering them trustworthy ways to build wealth.
In addition to promoting its online trading service to take advantage of the rebounding stock market, the new E*Trade campaign also looked to target new services, like mutual funds and mortgages. Many customers, viewing their E*Trade accounts as ‘‘play’’ money, dabbled in the stock market without much worry. They generally put their ‘‘safe’’ money, however, in mutual funds. One of the tasks of the marketers was to assure these customers that E*Trade, despite its history of wacky television commercials, was a reliable harbor for their money. It was an opportune time to enter the field, given that the mutual fund industry faced allegations that it engaged in illegal trading and overcharging customers. In keeping with the consumer advocacy approach, E*Trade made the marketers’ job easier by a change in fund structuring, in particular the 12b-1 fees that many mutual funds charged customers to cover the cost of promoting the funds. E*Trade became the first in the industry to rebate half of those and other service fees to its mutual fund customers. In the mortgage area E*Trade also gave the marketers something to work with by streamlining the way a mortgage was arranged and by launching the Mortgage on the Move program, allowing customers to move to a different market but keep their low mortgage rate. Again the company depicted itself as a consumer advocate.
As important as it was to position the brand, to maintain that E*Trade was looking out for the little guy, E*Trade still had to find a way to close the deal, to make potential customers take action. The strategy of the new ads was to get people to question their behavior and to present them with a tangible benefit, urging them to take advantage of it. In essence the benefit was a nobrainer, and E*Trade asked people, ‘‘So why on earth wouldn’t you?’’ The phrase ‘‘Why on earth wouldn’t you?’’ became the theme and encapsulation of the new campaign.
As the ‘‘Why Wouldn’t You’’ campaign broke in February 2004, E*Trade announced that it planned to double its advertising budget in 2004 to $90 million. The first two television spots pursued the new theme and reintroduced the brand while specifically promoting some of E*Trade’s new products. The first spot, titled ‘‘Purse,’’ pitched the company’s mutual funds by playing up its fee rebate program. In it a man was seen running with a purse through a crowded city street. The commercial then cut to a woman who appeared to be chasing him, presumably because he had stolen her purse. She got on a bus, and in an unexpected twist, the commercial showed the man catching up to her to return the purse. In a further surprise the woman opened the purse to find that it contained more money than when she had lost it. A voice-over by actor Kevin Bacon then asked, ‘‘If you could own the same mutual funds and get cash back every year, why on earth wouldn’t you?’’ A second spot, titled ‘‘New Neighbors,’’ promoted E*Trade’s Mortgage on the Move program. In it a suburban couple watched their new neighbors move in. Out of the car and moving van emerged a host of horrors, including crying babies, armed skinhead adolescents, screaming adults, barking dogs, dirt bikes, alligators, and killer bees. In this spot Bacon intoned, ‘‘When it’s time to move, E-Trade’s new mortgage on the move goes with you. If you could move and keep your low mortgage rate, why on earth wouldn’t you?’’
The new E*Trade television commercials aired on a variety of national cable channels. They also aired on network television during the NCAA basketball tournament in March. In addition to these spots (which were the primary focus of the ‘‘Why Wouldn’t You’’ campaign), other elements included a companion print campaign that ran in national newspapers and magazines, some direct marketing, in-store promotional pieces for E*Trade’s walk-in branches, and an Internet component that included Web banners.
E*Trade’s chief marketing officer resigned two months after the ‘‘Why Wouldn’t You’’ campaign broke and was replaced in June 2004 by Nicholas Utton, who soon put the account up for review once again. Martin/Williams was part of Omnicom Group, and Utton was portrayed in the press as an ‘‘Interpublic Group loyalist.’’ While head of marketing at JP Morgan Chase and MasterCard International, he had forged a successful relationship with Interpublic shops McCann Erickson, Foote Cone & Belding, and the Martin Agency. It was not surprising, therefore, when E*Trade and Martin/Williams severed their relationship in July 2004. By all accounts it was an amicable parting. Martin/Williams spokesman Steve Rudolph explained to the press, ‘‘It’s a business of relationships,’’ while in a released statement, president Steve Collins noted, ‘‘With a change in marketing leadership often comes changes in agencies and we wish E*Trade the best as they move forward.’’
Although Martin/Williams did not have the chance to roll out additional phases, the ‘‘Why Wouldn’t You’’ campaign succeeded in improving E*Trade’s overall business as well as benefiting the firm’s mutual fund and mortgage products. According to the agency E*Trade added nearly 372,000 new accounts in the six months after the campaign began. E*Trade also experienced a 35 percent increase in overall assets compared to the previous year. Moreover these assets were spread across a wider range of products. The campaign’s mutual fund component, according to Martin/Williams, succeeded in attracting a higher-value customer, resulting in a 22 percent increase in E*Trade’s mutual fund business. Likewise E*Trade’s mortgage operation enjoyed a 33 percent increase in direct mortgage originations, although the company also benefited from a refinance boom caused by low interest rates. The campaign garnered no advertising awards, but it accomplished the goals laid out by the client. It was only a change in management at E*Trade that was responsible for Martin/Williams losing the account.