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Online Brokerages Boost Advertising

The announced $1.29 billion merger of Ameritrade and Datek Online comes as only the latest development in an industry that has undergone dramatic changes in the past two years.

With their prospects changed dramatically after the end of the record-breaking dot-com era, online brokerages are again revamping their advertising messaging, this time in response to a new slate of changes in the competitive landscape.

Early Movers, Expanded and Rebranded
E*Trade Financial , one of the highest-flying players in the dot-com space, this year is attempting to parlay its own recent acquisition tear into a suite of serious, high-profile banking and finance products. That's a change from the company's wacky, irreverent television spots -- featuring a "spokeschimp" -- that dominated the firm's advertising for years.

Now, however, the company is looking to concentrate attention on its breadth of traditional banking services, which it has expanded as the company's core brokerage business felt the tremors of the dot-com shut-down.

The company began its positioning turnaround during January's Super Bowl, when it showed the company unceremoniously "firing" the chimp (and sending him into deep space).

"E*Trade has pretty significant brand awareness, and we support that with the Super Bowl every year, but after 18 acquisitions, if you talk to people on the street, they still say 'online trading company,' and it's very different than that," said a spokesperson for the company. "The Super Bowl ad showed a new name [from E*Trade Group previously], a new site, and a whole new approach to financial services. That's how this all started , with the monkey shot into space. Times have changed, and so have we."

Beginning in April, E*Trade began steadily running product ads designed by Goodby, Silverstein & Partners, and plans to continue doing so throughout the year. Spending is expected to be roughly in line with the 20 percent of annual revenues reallocated to marketing budgets. E*Trade spent about $37 million on advertising last year, according to figures from CMR.

Special focus will be given to sectors like fixed-income banking, mortgages, and especially, the so-called "active trader" -- which is consider to be the "sweet spot" for online brokerages, which typically make their money on per-trade commission. Last month, the firm announced promotional discounts for traders who complete more than 75 trades a quarter.

Another pioneer, Ameritrade, emerged in February with a new advertising campaign that similarly seeks to speak to its range. The Omaha-based firm's campaign, designed by Ogilvy Chicago, positions the company as being powerful enough and customizable enough to serve all sorts of traders -- bulls or bears.

Literally, the television spots -- which used the talents of Chicken Run animation house Aardman of London -- show a bull and a bear chatting peacefully about the market. While one is optimistic and confidence and the other is cautious and anxious, Ameritrade says that it can serve both viewpoints equally well.

As with the final appearance of E*Trade's spokeschimp, the Ameritrade effort is conceived as a stepping-stone to new, more product-oriented work. In recent months, the ads have focused on tools for individual investors, and execution quality.

"The new campaign is a natural evolution of Ameritrade's masterbrand strategy," said Anne Nelson, chief marketing officer of Ameritrade. "It positions us to deliver outstanding value and experience in a customized manner to specific client segments, who may have different needs and investing styles."

The ads also continued offline, with similar messages but lacking the TV spot's animated characters.

"Our new ad campaign reinforces our commitment to giving clients the ability to pursue their financial objectives -- through any market conditions," said Joe Moglia, chief executive officer of Ameritrade. "Over the last three years, we have invested $500 million in the Ameritrade brand, which has become synonymous with great value and execution. The new campaign builds on these strengths."

Datek, which declined to discuss its advertising strategy, said it is continuing to roll out new ads in compliance with federal law, which specifies that until the merger is complete, Datek and Ameritrade must still compete.

However, sources close to Ameritrade indicate that the firm is talking to its rival about advertising efforts following the merger. Both companies declined to discuss the matter. Datek and Ameritrade each spent about $55 million in advertising last year, according to CMR.