It may be time to kiss the E-Trade baby goodbye
The online brokerage is struggling despite the clever and extremely popular ads. A pink slip could be coming as costs get cut.
According to Advertising Age, E-Trade (ETFC) recently dropped Grey, its longtime ad agency, and recently replaced the chief marketing officer who championed the campaign. Ad Age said, "If history is any lesson, the baby's days are numbered."
E-Trade told the publication it hasn't yet decided whether it will part ways with the baby. But unfortunately for E-Trade, many consumers who laugh at the baby's antics aren't signing up with the fourth-largest online brokerage service these days.
E-Trade has been struggling for years. In January, it named former Barclays (BCS) chief operating officer Paul Idzik as its seventh CEO since 2007. Shares have soared by more than 47% this year as Wall Street has grown confident that Idzik's turnaround efforts might work. However, many skeptics remain, especially since E-Trade's largest shareholder, Citadel, liquidated its position earlier this year.
During the first quarter, E-Trade eked out a profit of $35 million, or 12 cents per share. While that was a 78% decline compared with the first quarter a year ago, it was an improvement over the $186.1 million fourth-quarter loss. And it ended the most recent quarter with an all-time high of $37 billion in assets. How the talking baby fits into the mix here is tough to say.
"The campaign has morphed over the years, moving from one that sought to assuage investor fear in 2008 to one that was more supportive during the rough economy after 2009," according to Ad Age.
E-Trade chief marketing officer Liza Landsman told Ad Age the campaign "could live on through some, but not all, mediums." She wasn't more specific, which will likely sadden the talking baby's fans.
Idzik is in cost-cutting mode. Not surprisingly, he wants to pare $30 million from E-Trade's marketing budget. That plan entails some risk because rivals such as TD Ameritrade (AMTD) continue to advertise. E-Trade spent $139.5 million last year on "'advertising and marketing development' in 2012," well under the $248 million TD Ameritrade spent on advertising, Ad Age noted.
The E-Trade baby had a great run while it lasted, but all things -- including iconic ad campaigns -- come to an end.
Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
The hilarious ads don't make up for the fact that Etrades prices and fees are over the top.
Hey Ameritrade, pick up the baby and run with it...literally!!
It will make you a house hold name!!!
I mean it.
I can think of a hundred Ad spots right now. LOL
A few years ago I owned some GE stock I had purchased through E-Trade. The market was doing poorly and I did not wish to buy or sell. I intended to hold until I felt comfortable with the market.
E-Trade liquidated my shares (for fees) although I made no transactions. E-Trade is a scam. Read the fine print. They will screw you, because they can.
Back in the day, businesses like these used to give good and realistic advise, excellent and honest customer service and on the business aspect they would last a long time making money for themselves and their customers, and everyone had a piece of the pie. honestly now they have these young idiots for executives that probably received in college a passing "D" grade to run the companies with unrealistic goals and expectations, charge for everything with outrages fees because of profit. meanwhile if "their" pockets don't profit, they put the blame on the economy, the market, etc. Before good companies used to last because of excellent customer service, now they rely on slamming (telemarketing term, for lying and deceiving their customers with false expectations) and once they have your money, kiss it good-by.
I feel sorry for the baby, the only cute thing the commercial had going.
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