Advertising is Never Child’s Play for E*TRADE and Nick Utton

Yesterday, more than 120 FCS Members and guests packed into our February luncheon at the New York Yacht Club to see a presentation about babies and the Super Bowl. Of course, the speaker could only be Nick Utton, Chief Marketing Officer of E*TRADE.

During his remarks, Utton explained the birth and maturing of the now legendary E*TRADE Baby commercials, but also provided a deeply insightful look behind the scenes at how “scientifically” E*TRADE tests, reviews, and executes its advertising.

With a presentation titled, “The Race for Marketing Optimization,” Utton reviewed for the audience the important tenets that drive the development for all E*TRADE campaigns. He began by stating that “marketing is the science of logic” and founded in the fundamental “4 Ps”: product, price, place, promotion. Referring to the classic AIDA model (Awareness, Interest, Desire, Action), Utton emphasized how advertising must drive to Action – something that is often lost when a campaign uses humor to break through clutter and focuses on awareness/brand personality alone.

Utton warned that a major challenge in the voice and messaging of financial advertising lies in the proper balance of emotion and reason. He feels that too many ads in the category are “magnificently rational” yet “emotionally bankrupt.”

In a highly competitive category, where E*TRADE is outspent by four of its competitors, Utton pointed out that “brand differentiation is everything.” E*TRADE relies on its ad campaigns to underscore the company’s distinctiveness, and Utton’s mission is to maximize his media spend so that “every $1 spent works like $2 to $3.”

Over 8 years, Utton has moved E*TRADE’s marketing spend from 10% online to approximately 37%, a strategy designed to acquire prospects more effectively and efficiently. Despite that, Utton credited “word of mouth” as the most effective factor in influencing prospects to consider E*TRADE, followed by television. However, neither of those avenues can be measured with the precision of digital advertising, and measure is something E*TRADE likes to do. Utton provided several examples of how E*TRADE “does lots of testing” and measures everything from CPA (cost per acquisition) online, to site analytics for its various web pages, from the effectiveness of buttons vs. banners, to the value of different media categories, such as news and sports.

In reviewing the E*TRADE Baby ads, Utton explained that the next step is a series of television spots tied to life events, e.g., marriage, retirement, births. His very entertaining reel of past spots included the “Speed Dating” commercial that aired during this year’s Super Bowl (btw: Giants 21, Pats 17). Utton also discussed the tremendous publicity garnered for the company through a highly effective PR campaign that placed the E*TRADE Babies in high visibility media coverage, including NFL playoff games, entertainment news coverage, and both the mainstream and financial press.

Utton also explained the strategy behind upcoming campaigns that don’t feature the Babies, but focus on product demos to promote the company’s new 360, Pro, and Retirement services.

Taking questions from the audience, Utton noted that, to date, three babies have been used over the life of the television campaign, with each baby-actor having a “shelf life of about 18 months before growing too old.” He also commented on how price and service are the two main factors for competitive advantage among online brokerages, and how volatility in the stock market (VIX) can be an indicator for new account activity for E*TRADE.

As a past winner of the FCS Financial Marketer of the Year, Utton proved once again that he is a masterful CMO, successfully managing the significant brand value of a treasured advertising campaign through wildly competitive times.

BONUS:  Did you know that the E*TRADE babies make cameos in the 2010 and 2011 FCS Portfolio Awards Music Videos?  Click on the links in the right-hand column to check them out on YouTube.