Money Talks!

Money talks and savvy web users listen. Finance is one of the killer apps for the Internet among service industries. Thanks to the Internet’s wealth of information and its interactive nature, finance is the sixth most advertised category online.

Web Ideal For Money Management

A recent Strategis Group poll on financial uses of the Internet revealed that within the last three months, among people who use the web for activities other than email:

  • 24% have done banking
  • 15% have paid bills
  • 12% have purchased stocks

Generally, interest in financial applications is highest among the 35-54 crowd. Education level is a good predictor of such interest, but income level is even better. Many users with a household income exceeding $80,000 per year are already using the web for financial applications.

The finance category in the Strategis Net Presence Survey includes 45 different brokerages, banks, and finance portals, but excludes insurance companies and credit cards.

Datek And Discover Brokerage Lead

Datek and Discover Brokerage lead the pack. Datek has an 18 percent “Net Presence” share of the online finance market and Discover Brokerage has 17 percent. In fact, Datek and Discover Brokerage are so prominent online, that they rank 19th and 22nd among all Internet advertisers in terms of visibility. (“Net Presence” is a composite measure of advertising visibility on the Internet.) Click here to see the relative online presence of the top financial advertisers.

So what about E-Trade you ask? “I can’t escape their omnipresent advertising on TV, on billboards, and in the newspaper,” you add. Well, they barely made the top ten among financial advertisers on the Internet, so most of their plentiful ad dollars are going elsewhere. E-Trade had no banner ads in the survey, other than a few that were linked to searches for “stocks” on the Snap and Lycos search engines. Fidelity and Charles Schwab are more visible than E-Trade online.

Banks Don’t Come To The Mountain

So how did banks fare? In a word, badly. The survey was completed before Wingspan Bank’s big summer blitz, and the only bank to finish among the top ten finance companies was the trend-setting Union Bank of California, which managed 6 percent of the category, thanks to strong advertising on Tripod and Women.com.

So you can’t escape First Union’s advertising either? Log on. You won’t be beckoned to “Come to the mountain on Internet. survey detected no First Union advertising among 7 ads except for one banner AOL. NationsBank and Chase Manhattan were also absent from the survey.

Let’s review. Some 24 percent of web users have done online banking in the last three months, including 30 percent of those with incomes over $80,000. But banking ads were sparse. Am I missing something here?

Partnerships Rule

Partnerships are a key way for online investment firms to build business and an online presence. For example, Charles Schwab sponsors the “My Stocks section of Excite’s home page and Excite users are beckoned to “open an account with Schwab.” Citibank has a constant presence on Netscape’s Netcenter and so does E-Trade on ZDNet.

With most sites, however, the partnerships are less obvious and some of the portals have branded their own financial offerings, such as MSN’s MoneyCentral and Yahoo Finance , making financial advertisers slug it out for visibility.

Heavy Targeting

The Net Presence Survey also focused on targeting of key e-commerce keywords and concepts. The survey revealed, for example, that entering the keyword “stocks” on the top search engines reveals a targeted banner ad 64 percent of the time. Specifically, if you enter “stocks” on a search engine, you will see a banner ad for Discover Brokerage, Datek, E-Trade, Fidelity, or Schwab with nearly half of the search results.

The word “stocks” is the third most expensive out of a list of 13 keywords on the GoTo search engine, as the top bidder pays $1.14 for top placement in search results and each click-through. In fact, the keyword “stocks” is even more expensive than “software,” “cars,” “books,” “auctions,” and “houses” on GoTo. This heavy targeting is further indicative of heavy interest in online stock purchasing and indicates that good placement for financial advertisers may become quite expensive very soon.

Dan Rather Knows

Who else advertises online? MarketWatch was the top finance portal in the survey. Banner ads featured the visage of Dan Rather wearing suspenders, which is fair enough. If he wears suspenders, then he must know stocks.

There are a plethora of institutions advertising online that are not in the top tier, but do have a decent online advertising presence. The list includes Suretrade , Ameritrade, Invesco, Jack Carl Futures, Scudder, Merrill Lynch, Lincoln Financial , Stein Roe, The Kaufmann Fund, Quick & Reilly, Salomon Smith Barney, and many others. In fact, the finance category was the broadest of all categories in the survey, with a greater number of advertisers than any of the 38 others, except for the computer category.

Moreover, the complex world of online advertising is a lot like the financial world as portrayed in the First Union ads. I won’t speculate on who the frogs are, or the sharks.

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