Multiplying Online Traders

Brandweek,  April 17, 2000  

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A clever compaign has brought a six-fold increase to Ameritrade's customer base

A decidedly New Age yoga instructor guides her class into meditation, telling students to imagine themselves in a wonderful place. "Debbie, Debbie, Debbie," she chants to a plump woman in tights near the front of the class. "Where are you?"

"I'm in a beautiful garden," Debbie says with a sigh, sublime smile on her face. Another student, eyes dosed, says he's lying on a warm, sunny beach, while a third, thumbs on forehead to increase his concentration, reports: "I'm trading stocks for $8 on Ameritrade."

"Eight bucks?" the startled beach meditator asks, eyes still closed.

"Eight bucks," confirms the trader.

"I'm off the beach," the former says, as he and other students begin to imagine themselves online, buying and selling.

The spot is "Mantra," one of the more recent entries in a campaign that, has helped multiply Ameritrade's customer base six-fold since it launched in October 1997. It has been so successful that the online broker has announced it may more than triple its ad budget in 2000, spending up to $200 million.

Cable has featured prominently in this highly successful ad blitz, both in account generation and in building brand awareness.

Ameritrade's campaign has used a number of lighthearted TV spots showing that trading online can be fun and highly profitable and that people have the tools they need to gain control of investing. The most successful spot of all has been "Stuart," which begins with a weird-looking 20-something photocopying his face and then counseling his balding, fiftysomething boss on online research and investing.

"We want to create brand preference and make Ameritrade look approachable," explains Tim Smith, the company's manager of integrated media. "We target adults 25-54 with household income above $75,000 and some investment knowledge. That demo is reflected in our ads, where you see such things as a boat in a nice neighborhood, a vintage 1940s roadster and Stuart's boss's nice corner office. Our ads are pitched to a cross-section of America. "Stuart" was young helping old, while "Mantra" is a fun spot that appeals to everyone and shows that no one is excluded from trading online."

Ameritrade buys up to 30 cable networks deep, relying primarily on financial and news services such as CNNfn, CNBC and MSNBC. Because each of its spots carries a toll-free number, Ameritrade can track which networks are generating the most calls and adjust its buys. "We tend to focus on networks that reflect our audience, but we constantly test other networks to see if they generate the response we are looking for," Smith reports. He has had good results on a number of channels, including CNBC, Lifetime and the ESPN family of networks and is testing the new Oxygen network. Smaller networks such as ESPN News also have generated significant response and proved to be highly cost-efficient.

Ameritrade's own analysts evaluate each network on a cost-per-account-generated basis, and market analysts use the same approach to examine the broker's overall advertising effort. "We buy networks by daypart, not specific shows," Smith says. "That way we can do better on rate and daypart."

Ameritrade's advertising campaign involves all media except outdoor. The amount it spends on cable versus broadcast varies, although cable came out on top last year.

"Cable is one of the two backbones of our media plan," Smith declares. "We use it for the power of television and because it allows for niche-casting. It skews to higher-income households and reaches people we feel are our targets. Using networks like CNN, CNBC and CNNfn gives us a larger concentration of our target audience than a broad-based network plan would."

"As we triple our ad spend, we will dramatically increase our cable spend," Smith says. "We are a believer in cable because it has proven itself again and again. Cable builds brand awareness and reaches 70 percent of households in the country. Because we track everything that comes in the door, we know that it does so cost-efficiently. As the cable universe expands and changes, it will be one of our top considerations going forward."

Smith believes that technology will make cable even more important for Ameritrade. He was impressed by a recent presentation on interactivity, where stock quotes could be accessed on the TV screen. "In the future, we really look forward to finding the best ways to use TV, the Internet and their convergence to reach our prospects and convert them into quality customers," he says.

Ameritrade is hoping to capitalize on the growth of the Internet and e-commerce over the next few years. "Currently, there are about 10 million online brokerage accounts in the U.S.," explains Mike Anderson, Ameritrade vice president of investor and public relations. "Research reports we read from Forrester Research, Gomez, Jupiter Communications and various online analysts all say that by 2003, there will be about 25 million online brokerage accounts. The reason we are tripling our advertising is that we feel now is the time to participate in the growth of the online industry. If we wait, we may miss it."

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