On Super Bowl Sunday, viewers expected a spate of wacky commercials from the E*Trade Group, the upstart online broker, and they weren’t disappointed. One spot showed a hospital patient who didn’t have to worry about health insurance because he had “money coming out the wazoo.”
But there was also a commercial about investing for the long term in which the hopes of a father who had counted on a cushy retirement financed by his son’s career as a professional basketball player were dashed when his offspring suddenly confided a desire to enter show business. Another spot, centered on a disastrous disaster movie, reminded investors that knowing when to sell might be just as important as knowing when to buy.
By introducing a cautionary role into what had been one of the most effusive feel-good campaigns of the last year, the commercials, by Goodby, Silverstein & Partners in San Francisco, were indicative of a new trend in advertising for brokerage firms. Reacting to a recent shift in the investing climate—not to mention the gut-wrenching plunge in stocks on Friday—marketers of financial products and services are moderating their pitches, playing down irrational exuberance in favor of counseling balance.
“Financial advertising has gotten less silly,” said Marten Hoekstra, executive vice president and marketing director at PaineWebber in New York.
The result has been to cool down considerably a category that had been positively giddy in its ebulliently optimistic assertions about how easy it was to make money by buying stocks and mutual funds. The onslaught of such campaigns, primarily humorous, to promote brokers, online and traditional, has been one of the most noticeable signs of the galloping bull market.
“Those funny ads aren’t so funny anymore,” Jonathan Bond, co-chairman at Kirshenbaum Bond & Partners in New York, the agency for DLJ Direct, said yesterday. DLJ Direct, an affiliate of Donaldson, Lufkin & Jenrette, has been running ads offering investors wry advice like this: “Look both ways before you cross the street. Especially if it’s Wall Street.”
“People are much more emotionally affected when they lose money than when they make money,” Mr. Bond said. “Everybody remembers Black Monday, but who remembers Happy Monday?”
The ads appearing the last few weeks take a page from the lesson plan developed during past wild times on Wall Street. Like the mini-campaigns that ran after sudden sharp downturns in 1987, 1989 and 1998, the special ads focus on themes related to market gyrations. They assume a calm tone that is meant to reassure consumers that the sky is not falling. The ads are low key, almost soothing in the way they stress a long-term perspective and remind investors that what goes up must at least occasionally come down.
For instance, newspaper ads from Fidelity Investments, a unit of FMR, featured a photograph of Peter Lynch, its legendary stock picker, and carried the headline “The market’s wild ride shouldn’t throw you off course.” And Merrill Lynch ran newspaper ads urging investors to “be informed before they act.
“We think of ourselves as one of the couple of market leaders who set the tone for the investment community,” said James Gorman, chief marketing officer at Merrill Lynch in New York, which uses the J. Walter Thompson unit of the WPP Group as its agency. “People need to know where we stand.”
“The ads are not prepared in advance,” he added, “but we’re very attentive to highly volatile markets on behalf of our clients. We don’t react to day-to-day blips, but as we think the mood needs stabilizing, we hope we’re a sober voice in a hysterical environment.”
Sober is a good word to describe the mood that prevails in the campaigns that started turning up in February and March, when cracks began showing in the shiny façade of the so-called New Economy stocks.
For example, PaineWebber ran newspaper ads in mid-March that warned against embracing companies “with no earnings and no well-defined path to ever reaching profitability.” The ads were repeated with slight updating on Saturday and Monday.
“We had been talking about a way to articulate a voice of reason about asset allocation and portfolio diversification, directed at the notion of not overexposing yourself to technology,” Mr. Hoekstra said.
“We make these plans from time to time, when our strategy is contrarian to Wall Street consensus or investor behavior,” he added. “In this case, we had scheduled ads to run in the next couple of weeks, but after Friday’s market movement we accelerated the schedule.”
One advertiser not changing its plans is Alliance Capital, which since February has run ads intended to deliver wake-up calls to consumers who believe they can increase their retirement nest egg by playing the market with their savings.
“A very pretty picture was being painted by online traders, that if you had an Internet hookup you’d have wealth beyond your dreams,” said John F. Ferrell, president and chief creative officer at the Alliance agency, Ferrell Calvillo Communications in New York. “But it really isn’t that simple.”
“Alliance sells funds through brokers, so the message was that gong online without the counsel of a broker or financial adviser could lead to problems,” he added. “We’re saying, ‘Don’t go it alone.’”
Similarly plain-spoken advice is being offered in ads for an online broker, TD Waterhouse, which have eschewed words like “trader” and “trading” for “investor” and “investing” to cultivate a less short-term perspective.
“Our message has been consistent: use our research, invest in what you know, have long-term goals,” said Peter Post, president and chief operating officer at the TD Waterhouse agency, Emmerling Post in New York.
Coming ads “might begin to emphasize tools that are helpful when markets get jumpy,” he added, like e-mails sent to customers when stocks reach certain “downside and upside” prices.
The volatile market conditions have not caused a decline in trading volume at TD Waterhouse, Mr. Post said, adding that if volume were to “fall off, there perhaps would be a possible bias to increase spending” to stimulate demand. (Demand for ad space and commercial time remains robust all along Wall Street, according to agency executives, who described how some sought-after pages in national financial newspapers are booked through May.)
Will all the risk avoidance continue in brokerage advertising, especially in the light of the rallies the last two days?
“Everyone can be prudent when the markets go down,” said Mr. Bond at Kirshenbaum Bond. “The question is, what do you do when the market is going up?”
During the boom, DLJ Direct still ran ads deflating the hyperbole. For example, on poster proclaimed: “Think an investment will make you rich overnight? You might want to sleep on it.”
So what’s the E*Trade game plan now?
“We haven’t jumped at what’s going on on the street today,” said Rich Silverstein, who shares the posts of chairman and creative director at Goodby, Silverstein, part of the Omnicom Group, with Jeff Goodby.
“We have this great newspaper ad—‘Breathe in, breathe out’—if things go a little wacko, but we haven’t run it,” Mr. Silverstein said, adding that he would call the executives at E*Trade to discuss the possibility of running it, if needed.
“I want to believe what we’ve always done is a range of work, some out there, some saying ‘Take it easy,’” Mr. Silverstein said. “There are probably some messages we shouldn’t be running, but we’ve always said ‘Things are good now but what will happen when it turns, and it will turn.’”
As for himself, he added, laughing, “I’m the one who panics and jumps out the window” when the bears rampage. “My wife doesn’t.”
Stuart Elliott, April 19, 2000, The New York Times
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