Online Brokerages Boost Advertising

While E*Trade and Ameritrade are diversifying their advertising efforts, others are looking at ways to carve out new client bases among the dwindling numbers of online traders.

Last month, Charles Schwab’s CyberTrader took the wraps of its latest effort, designed to capture the attention of serious traders by appealing to them as sophisticated and freethinking. Thus, by positioning CyberTrader as a tool not for the uninitiated, Schwab is aiming to boost its numbers of less-active but still-serious investors.

“The campaign was born out of respect for the ‘CyberTrader,'” said Bo Bradbury, an account director at GSD&M, which also handles work for San Francisco-based Schwab. “They are [each] unique in terms of trading styles and the tools they use, but they share the same mind-set — they are disciplined, strategic and very competitive.”

Designed by Austin-based GSD&M, the effort involves television, print, online and direct ads. Spots show skittish herd animals like sheep, fainting goats and wildebeests, which, a voiceover says, “do not make good CyberTraders.”

Instead, “CyberTraders get streaming data and news advanced charting and rapid-fire executions, all within a customizable trading platform, for just $9.95 a trade,” the spot’s voiceover reads. “Sheep get nothing.”

The piece then concludes with the tagline, “There are traders and there are CyberTraders.”

“This campaign … shows that strategic traders are different from active traders because they are highly disciplined, strategic, and analytical,” said Jack Calhoun, executive vice president of advertising and brand management for Schwab.

Harrisdirect, the newest player in the field, is also taking one of the most aggressive stances, launching a multi-million dollar campaign just three months after its parent, the Bank of Montreal , acquired and renamed CFSBdirect — which just a year and a half earlier, had been DLJdirect, until Donaldson, Lufkin, & Jenrette sold the unit to Credit Suisse First Boston.

With the continued name-changing, Jersey City, N.J.-based Harrisdirect aimed to make a splash with its debut advertising. A trio of television spots, designed by Euro RSCG MVBMS Partners, highlights the company’s new trading platform.

“In an environment where key industry players are trying to restate their relevance, Harrisdirect launches with a truly unique set of strengths: leading technology, a diversity of product and research, and philosophical investing goals that are consistent with the mindset of today’s direct investor,” said Ron Berger, chief executive of the agency.

The campaign seeks to communicate the benefits of direct investing through “Guided Independence” — the concept that Harrisdirect is the only brokerage service that provides guided independence for direct investors.

Like CyberTrader, the Harrisdirect campaign is intended to appeal to an investor who is both self-directed and discriminating — who demands a proven platform of industry leading tools and resources specifically tailored to meet their unique investment needs, supported by personalized service from licensed professionals.

“Our industry-leading technology focuses on both information and access to professional support, providing our clients with an approach we’re calling ‘guided independence’,” said Harrisdirect President and CEO Bruce Schwenger. “This campaign captures the essence of our direct investing philosophy, and makes it clear to investors that they can be in control without being alone.”

The campaign also features a slate of newspaper and magazine executions, drawing on the television ads.

Regardless of the differing objectives and tactics, the final estimation of any firm’s success in the hotly competitive arena naturally comes down to longevity. And that, unfortunately, may rest more in online brokerages’ efforts to cushion themselves by finding niches — such as CyberTrader — or by branching out into less-troubled areas, as the early-movers in the space have been doing.

Indeed, even as the online brokerages are executing on their new ad strategies, signs are suggesting that the individual trader might even become an afterthought to the larger, differentiated players. Last month, Ameritrade rolled out Connection, its platform for institutional traders. With the big budgets and high margins of institutional trading, the move could appeal to other rivals as well — paving the way for a third round of sweeping industry changes, and a new stab at positioning.

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