E*Trade Financial Corp.

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E*Trade Financial Corp.

MONKEY TRILOGY CAMPAIGN
WHY WOULDN'T YOU? CAMPAIGN

135 East 57th Street
New York, New York 10022
USA
Telephone: (646) 521-4300
Fax: (888) 276-9771
Web site: www.etrade.com

MONKEY TRILOGY CAMPAIGN

OVERVIEW

In early 2000 the high stock prices of America's technology industry were reaching their zenith. E*TRADE Financial Corp., along with other brokerage firms, such as Charles Schwab & Co., Inc., and TD Ameritrade Holding Corp., allowed stock traders to monitor and trade stock online. The flippant buy-sell behavior of day traders—along with the overvaluation of technology companies—was greatly responsible for the stock market's drastic collapse in mid-2000. Although E*TRADE was considered a dot-com, meaning it was a business that existed primarily online, its financial services included ATM retail banking, institutional brokerages, and asset management. E*TRADE released its "Monkey Trilogy" campaign to suggest that it was not just another half-baked dot-com but a formidable brokerage that could compete with established firms such as Charles Schwab and Merrill Lynch & Co., Inc.

The campaign consisted of three commercials created by the ad agency Goodby, Silverstein & Partners. The first spot, "Monkey," aired during the 2000 Super Bowl. At that time the technology sector was still flourishing. Of the game's 36 spots, 17 were purchased by dot-coms. "Monkey" featured two disheveled men clapping while a chimpanzee danced to the Mexican folk song "La Cucaracha" in a garage. The spot concluded with the copy "Well, we just wasted two million bucks. What are you doing with your money?" At the 2001 Super Bowl, after the technology industry had imploded, E*TRADE aired "Monkey II." The spot featured the same chimpanzee walking through a ghost town consisting of failed dot-com companies. The final Super Bowl commercial, in 2002, featured an E*TRADE executive firing the chimpanzee for creating an over-the-top E*TRADE commercial complete with dancing showgirls and big-band music.

Many advertising critics considered the "Monkey Trilogy" an insightful commentary on the rise and fall of America's technology industry. The first commercial garnered a Gold Lion at the Cannes International Advertising Festival. In 2000 Shoot magazine ranked "Monkey" above all other Super Bowl spots with its "Top Spot of the Week" rating. Audiences polled by Adweek also rated "Monkey" as the most memorable commercial out of all the 17 dot-com spots.

HISTORICAL CONTEXT

Trade Plus first surfaced in 1982 as an electronic brokerage firm for companies such as Charles Schwab. Ten years later Trade Plus created E*TRADE, an online service available only to stockbrokers. When www.etrade.com launched in 1996, E*TRADE's services also became available to the general public. Soon afterward the firm hired Christos Cotsakos as CEO, and the new executive took the firm public. The technology boom in the late 1990s fueled the popularity of purchasing and selling stocks online, which boosted E*TRADE's sales; in addition, the company's own stock price flourished.

In 1999 Goodby, Silverstein & Partners pitched its services to E*TRADE's Cotsakos, who quickly undermined the ad agency's concepts. Goodby, Silverstein & Partners' cochairman Rich Silverstein explained the experience in Campaign, an advertising-industry magazine. "The first meeting with him was like boot camp," he said. "It was really, really awful. Someone in our team—and I won't say who—came out saying they would never work for the man. He was challenging us to go to war with him, to see what we were made of. You don't usually get attacked in the first interview—usually it's a love fest. But he would ask you a question and you'd answer and he'd say, 'Wrong! Next!'" Despite an unfavorable start, however, E*TRADE awarded its ad account to the agency. Goodby, Silverstein & Partners soon released the "It's Time for E*TRADE" campaign, which collected a Gold EFFIE from the American Marketing Association in 2000.

Rich Silverstein explained the demands that Cotsakos placed on the agency leading up to the 2000 Super Bowl. "Christos always wanted to [advertising during] the Super Bowl," Silverstein continued in Campaign. "And he beat us up for six months. 'What's the Super Bowl commercial? What's the Super Bowl commercial?' It was unbelievable. Yeah, it was more pressure than anyone needs."

The agency believed that other dot-com ads were funny but that few connected their humor back to the brand. As a result, even though audiences enjoyed the commercials, they could not recall what was actually being advertised. The observation prompted Goodby, Silverstein & Partners to comment on its competitor's wasted advertising money and then contrast the wastage with E*TRADE's prudence.

TARGET MARKET

The original "Monkey" spot targeted the free-spending consumers who were still enjoying the technology boom at the beginning of 2000. One year later America's economic landscape had changed. Internet-based companies that could afford a $2 million Super Bowl spot in 2000, such as Pets.com, were no longer in existence. The economic slump of 2001 and 2002 changed the "Monkey" campaign's target. The second and third "Monkey Trilogy" commercials targeted America's growing jobless population that had once worked for dot-coms. It also targeted the suddenly sheepish investors that were recoiling from the damaged stock market. "E*TRADE always wants to be timely and on top of things," Dave Gray, Goodby, Silverstein & Partners group creative director and art director, explained to Shoot. "So, basically, [Monkey II] was just an observation of the condition of the market now&a lot of [dot-coms] are now out of business. The fact that there were only three [dot-com] companies advertising on the [2001] Super Bowl made it perfect timing."

With an estimated 135 million viewers during the 2000 Super Bowl and 131 million during the 2001 Super Bowl, the campaign reached one of America's largest audiences. Talking to Shoot magazine, Paul Cappelli, the president of the advertising service the Ad Store, New York, lightheartedly described the Super Bowl audience as "a bunch of morons sitting around a TV, watching a football game and drinking beer." Cappelli also explained that this target expected Super Bowl commercials to be funny. When the commercials were not, audiences sometimes felt confused.

The three "Monkey Trilogy" spots parodied other dot-com commercials. According to advertising analysts, using parody was a cost-effective method of reaching large audiences. Parody poked fun at something the target market already understood; it avoided the risk of creating an entirely new joke. "Advertising is one of our most popular forms of entertainment. So making jokes about ads can be a fun, 'in' thing to do," the marketing and advertising consultant Michael Markowitz explained to USA Today.

GARAGE DOOR

Christos Cotsakos, the CEO of the online brokerage firm E*TRADE, had an atypical approach to leadership, according to Campaign, an advertising magazine. Inside an office building that served as E*TRADE's Menlo Park headquarters (the company moved to New York city in 2004), Cotsakos installed a regular garage door along an office hallway. The out-of-place furnishing was to remind E*TRADE employees that "behind some garage door somewhere, someone else could be working on ideas better than theirs."

COMPETITION

On December 31, 1999, Merrill Lynch, one of the world's largest financial-services companies, released a $150 million campaign to herald its new online services under the tagline "Be Bullish." Although Merrill Lynch dwarfed competitors such as Charles Schwab, Ameritrade, and E*TRADE, the Merrill Lynch brokerage division had been criticized for its late delivery of an online trading service. Television spots for "Be Bullish" aired on cable channels such as CNN and USA. The campaign's premier television spot, which resembled a large-budget action movie, featured commandos rappelling from helicopters that were hovering above Manhattan. The helicopter squadron subsequently airlifted the 7,000-pound bull statue that was commonly associated with the New York Stock Exchange and Merrill Lynch's logo. "We're bringing the bull back," James Gorman, chief marketing officer at Merrill Lynch, said to USA Today, referring both to the company's logo and to an aggressive attitude within the stock market.

Charles Schwab reigned as America's largest online brokerage firm in 2000. Charles Schwab's "Smarter Investors" surfaced during the 2000 Super Bowl with three spots created by the ad agency BBDO New York. Until the Super Bowl "Smarter Investors" had only featured high-profile athletes such as tennis star Anna Kournikova and football player Shannon Sharpe. Hoping to stand out from the athletic climate of the Super Bowl, one Charles Schwab Super Bowl spot titled "Ringo" featured former Beatles drummer Ringo Starr explaining the stock market to younger musicians. "Using a non-sports personality, such as Ringo Starr, helps demonstrate the depth and breadth of this campaign," Ted Sann, cochief executive officer and chief creative officer of BBDO, said in a press release published in the PR Newswire news service.

MARKETING STRATEGY

The first "Monkey Trilogy" commercial cost an estimated $2 million. The 30-second spot "Monkey" began in front of a suburban-looking garage. Inside it one older man sitting on an ice chest was beside another man in a lawn chair. Next to them was an overturned bucket supporting a boom box. A chimpanzee dressed in an E*TRADE T-shirt pressed play on the boom box, which played the Mexican song "La Cucaracha." The ape began dancing; and the two men struggled to clap in time with the song. At the spot's conclusion copy read, "Well, we just wasted two million bucks. What are you doing with your money?"

The spot was originally conceived by Goodby, Silverstein & Partner's creative director Dave Gray and associate creative director Gerry Graf. Bryan Buckley of the production company Bicoastal/International Hungry Man directed the spot. Buckley explained his first impression of the commercial to Shoot "Gerry and Dave called me and said, 'OK, there's two guys clapping, and a monkey standing on a street corner, and it just goes on for thirty seconds,' and I'm thinking, 'This spot sounds terrible,'" Buckley mused. After he heard the spot's punch line, however, Buckley said, "I just laughed out loud because you just never expected that."

Buckley explained that two of the spot's main challenges were choosing the right actors and selecting a filming location. Instead of using a street corner Buckley chose an unassuming garage for the location. One of the men cast in the spot was not even an actor, but the father of an actor with whom Buckley had worked previously.

Buckley then directed the 2001 E*TRADE commercial titled "Monkey II," which also used the chimpanzee from "Monkey." Instead of parodying wasted dot-com advertising, "Monkey II" commented on the bankruptcy that had plagued dot-coms since mid-2000. Only three dot-com companies, E*TRADE, Hotjobs.com, and Monster.com, aired commercials in the 2001 Super Bowl; a drastic difference from the 17 companies featured in 2000's game. "Monkey II" began with the chimpanzee riding his horse through a ghost town of fictional startup companies such as Pimentoloaf.com and TieClasp.com. The vanity plates of an abandoned Porsche Boxster read "DOT COMER." After a wrecking ball smashed through the "LeSocks.com" building, the sock-puppet dog that had starred in the previous year's Pets.com commercial landed at the chimpanzee's feet. "Monkey II" was not entirely humorous. For the conclusion, tears began running down the chimpanzee's cheek, and the copy "Invest wisely" appeared with E*TRADE's logo.

CHIMPS VS. HUMANS

Dave Gray, the group creative director and art director for the ad agency Goodby, Silverstein & Partners, helped film a commercial for the online brokerage firm E*TRADE. The spot, titled "Monkey," poked fun at dot-coms wasting money on poorly conceived Super Bowl commercials. "Monkey" featured two old men trying to clap while a chimpanzee danced to the song "La Cucaracha." Gray explained to Shoot magazine how working with the chimpanzee proved easier than working with humans. "You'd tell the monkey to run up the driveway, jump over the boom box, turn it on, jump up on the garbage can and start tapping its foot, and he'd nail it every single time," Gray said. "You tell the guy on the right to stop smiling and he'd start clapping."

The final spot, "Monkey Musical," aired during the 2002 Super Bowl. Although the spot continued E*TRADE's previous wasted-money theme, it received less acclaim from the advertising industry. The spot began with a chimpanzee bedecked in a shiny green suit before an ensemble of Las Vegas showgirls. After a 30-second musical act the white copy "Tomorrow morning" appeared on a black background. The chimpanzee was shown sitting in the office of E*TRADE's CEO, Christos Cotsakos. The disapproving executive held a newspaper with the headline "Monkey Flops" and berated the chimpanzee for advertising with a musical. He fired the chimp but set him up with a new job manning space flights for NASA.

OUTCOME

The first two "Monkey Trilogy" spots collected some of advertising's most coveted awards. In 2000 "Monkey" won a Gold Lion at the Cannes International Advertising Festival (in the investment, insurance, and property-development category). The same spot collected an ANDY Award in the financial products and services category of the International ANDY Awards, given out annually by the Advertising Club of New York. In the banking and financial category of the Clio Awards, it won a silver in 2001. "Monkey II" also collected an ANDY Award in the television category in 2002. It was short-listed in the investment, insurance, and property-development category at Cannes.

From 2000 until 2002 Goodby, Silverstein & Partners created other E*TRADE advertisements that coincided with "Monkey Trilogy." The combined effort safeguarded E*TRADE against the very thing "Monkey" accused other dot-coms of doing: wasting money. E*TRADE weathered the stock-market recession between 2000 and 2002 better than Merrill Lynch or Charles Schwab. Both posted a sales loss of 37 percent between 2000 and 2002. Even though it was grossly outsized by both Schwab ($4.4 billion in 2002 sales) and Merrill Lynch ($28.3 billion in 2002 sales), E*TRADE only decreased 13 percent during the same three-year-period. Sales for E*TRADE were $1.9 billion in 2002, a 13 percent decrease from the $2.2 billion posted in 2000.

WHY WOULDN'T YOU? CAMPAIGN

OVERVIEW

A pioneer of online stock trading, E*Trade Financial Corp., spending heavily on advertising that used irreverent humor, established itself in the minds of consumers during the 1990s. As long as the stock market and economy were booming, this marketing approach proved quite successful. That all came to an end in the early 2000s as the economy stalled, the dot-com bubble burst, and the stock market collapsed. People who dabbled in the market with their online accounts grew cautious. Faced with a severe erosion in business, E*Trade retrenched, bringing in new leadership that slashed the advertising budget and diversified the company's product offerings. When the stock market rebounded in 2003, E*Trade initiated a change in marketing strategy, hiring Minneapolis-based Martin/Williams Advertising to handle the advertising account. The agency developed the "Why Wouldn't You" campaign, which began in February 2004.

The new campaign featured a pair of television spots that repositioned the E*Trade brand while specifically promoting the company's mutual fund and mortgage products. Print elements, direct marketing, and in-store promotional pieces also played a part in the effort, which was slated to spend $90 million over the course of the year.

Only weeks after the "Why Wouldn't You" campaign began, however, E*Trade changed marketing heads. Although Martin/Williams soon lost the account, the campaign it created succeeded in helping E*Trade to add some 372,000 new accounts, significantly grow its mutual fund and mortgage business, and increase its overall assets by 35 percent over the previous year.

HISTORICAL CONTEXT

E*Trade essentially invented online trading in 1991. As the economy soared in the second half of the 1990s and Internet ventures became the darlings of Wall Street, it enjoyed phenomenal growth. E*Trade spent heavily on advertising, about $140 million a year at one point. Like another newcomer in the brokerage business, Ameritrade, E*Trade used irreverent humor to establish its brand and appeal to a younger demographic, suggesting that stock trading was like playing a game while mocking traditional stock brokers, portrayed as stodgy and being interested only in customers who had already made their fortunes. The culmination of these free-spending days for E*Trade was a 2000 Super Bowl television spot that featured a chimpanzee and the text "Well, we just wasted 2 million bucks. What are you going to do with your money?"

Soon the dot-com bubble burst, and E*Trade was hurt like all the other Internet companies. And because the economy collapsed as well and the stock market tanked, people no longer saw stock trading as a game. Even consumers who harbored no desire to play day trader were hurt, as their 401(k) accounts and mutual funds suffered major losses. E*Trade lost almost half its customer base and in response slashed its ad budgets. Moreover, there was little money to be made in stock transactions themselves, prompting old-line firms to get out of the business. In early 2003, following a corporate shakeup, a new CEO was installed and E*Trade looked to revamp its business model. To mitigate the risk of becoming a niche player in the volatile online stock trading niche, E*Trade looked to diversify—an effort that was actually under way—moving into such areas as institutional trading, market making (acting as middleman in stock transactions), mutual funds, banking, lending, mortgages, and stock plan administration services. Along with adopting a more conservative, product-centered strategy, E*Trade also decided to reconsider its advertising.

E*Trade's advertising account, now estimated to be worth $35 to $45 million a year, was put up for review with five agencies participating. Incumbent Goodbye, Silverstein & Partners, responsible for the Super Bowl chimp spot, opted not to participate. In October 2003 Martin/Williams emerged the winner. The new agency was charged with the task of repositioning the E*Trade brand as a safe haven for serious money. At the same time, E*Trade wanted to take advantage of an upswing in the stock market and promote its trading division. While humor would remain a key element in the E*Trade approach, the company looked to avoid the pure zaniness of past advertisements.

TARGET MARKET

Martin/Williams's first task was to determine the target customer for what would become the "Why Wouldn't You" campaign. The agency zeroed in on self-directed investors, the kind of people who mistrusted the traditional financial companies, perceiving them to be controlling and unapproachable. Although Morgan Stanley, Goldman Sachs, Merrill Lynch, and the like were now preaching "partnership," the consumers that E*Trade targeted were somewhat skeptical of this pitch, especially in light of recent Wall Street scandals in which some of these very same firms had knowingly sold marginal stocks to smaller clients while saving the prime issues for themselves and favored customers. Starting with the self-directed investor, Martin/Williams narrowed this target audience into what it saw as three focused subsegments, which research indicated was responsible for more than 60 percent of all brokerage accounts, online banking, and mutual fund investing. At least on the brokerage side, E*Trade and its online rivals were also "targeting a warier and more tech savvy customer than the newcomers who helped set the heady tone for the online broker industry in the 1990s," according to Kate Fitzgerald writing in American Demographics, eschewing "the soccer-mom day trader making a killing in her kitchen during the late 1990s" in favor of "the most active and experienced traders who generate the most profits."

COMPETITION

E*Trade's most direct competitor was Ameritrade Holding Corp., which had pursued a similar irreverent, free-spending marketing approach during the 1990s. Ameritrade continued to promote its brokerage services through humorous television spots. Shortly after Martin/Williams won the E*Trade account, Ameritrade launched its "Good Idea. Bad Idea" campaign to tout its flat pricing approach and other benefits. In one spot a man getting in a New York taxi said, "One flat rate, right? L.A. please." "Flat rate pricing," explained a voice-over. "Bad idea for taxis. Good idea for online trading." Another competitor in this sector was Fidelity Investments, which at the time was promoting its "active trade services." Taking a more emotional approach, this campaign featured a TV spot in which a man appeared to be a high-powered investor or fund manager executing offers from his well-apportioned office only to have it revealed, once the door was opened, that he was at home. Other online trading rivals included Charles Schwab & Company and TD Waterhouse Investor Services, Inc.

In its new businesses, E*Trade faced competition from numerous angles, as a wide swath of companies were positioning themselves as one-stop shopping centers of financial services. It was not just firms like Merrill Lynch, Goldman Sachs, and Citigroup subsidiary Salomon Smith Barney that E*Trade had to contend with in this arena. There were also a multitude of insurance companies, banks, and even mutual fund companies, such as giants Fidelity Group and the Vanguard Group, which also provided stiff competition.

MARKETING STRATEGY

In keeping with its changing business model, E*Trade looked to evolve its marketing message and brand positioning. Because the targeted self-directed consumer exhibited an antipathy for old-guard financial firms, which the consumer saw as primarily interested in feathering their own nests, E*Trade wanted to portray itself as a sort of consumer advocate, one that was looking out for the little guys and offering them trustworthy ways to build wealth.

In addition to promoting its online trading service to take advantage of the rebounding stock market, the new E*Trade campaign also looked to target new services, like mutual funds and mortgages. Many customers, viewing their E*Trade accounts as "play" money, dabbled in the stock market without much worry. They generally put their "safe" money, however, in mutual funds. One of the tasks of the marketers was to assure these customers that E*Trade, despite its history of wacky television commercials, was a reliable harbor for their money. It was an opportune time to enter the field, given that the mutual fund industry faced allegations that it engaged in illegal trading and overcharging customers. In keeping with the consumer advocacy approach, E*Trade made the marketers' job easier by a change in fund structuring, in particular the 12b-1 fees that many mutual funds charged customers to cover the cost of promoting the funds. E*Trade became the first in the industry to rebate half of those and other service fees to its mutual fund customers. In the mortgage area E*Trade also gave the marketers something to work with by streamlining the way a mortgage was arranged and by launching the Mortgage on the Move program, allowing customers to move to a different market but keep their low mortgage rate. Again the company depicted itself as a consumer advocate.

As important as it was to position the brand, to maintain that E*Trade was looking out for the little guy, E*Trade still had to find a way to close the deal, to make potential customers take action. The strategy of the new ads was to get people to question their behavior and to present them with a tangible benefit, urging them to take advantage of it. In essence the benefit was a no-brainer, and E*Trade asked people, "So why on earth wouldn't you?" The phrase "Why on earth wouldn't you?" became the theme and encapsulation of the new campaign.

"WE BELIEVE WE HAVE A GOD-GIVEN RIGHT TO MARKET SHARE"

For seven years, from the mid-1990s to the early 2000s, E*Trade was headed by CEO and chairman Christos M. Cotsakos, a former Vietnam infantryman, who brought with him a foxhole mentality: you have to trust the person next to you. He became known for his team-building exercises and initiation rites, such as having newcomers stand on a chair to reveal something about themselves before a group of coworkers. He once had his managers attend cooking school and then work together to create a gourmet dinner. Cotsakos was also extremely aggressive, telling BusinessWeek, in a 2000 profile, "At E*Trade, we're an attacker, we're predatory. We believe we have a God-given right to market share." But with the popping of the Internet bubble—and after it was revealed that his salary was $80 million in 2001, a year in which his company lost more than $240 million—Cotsakos went from being regarded as a visionary to becoming a poster child for dot-com excess, after it was revealed that his salary was $80 million in 2001, a year in which his company lost more than $240 million.

As the "Why Wouldn't You" campaign broke in February 2004, E*Trade announced that it planned to double its advertising budget in 2004 to $90 million. The first two television spots pursued the new theme and reintroduced the brand while specifically promoting some of E*Trade's new products. The first spot, titled "Purse," pitched the company's mutual funds by playing up its fee rebate program. In it a man was seen running with a purse through a crowded city street. The commercial then cut to a woman who appeared to be chasing him, presumably because he had stolen her purse. She got on a bus, and in an unexpected twist, the commercial showed the man catching up to her to return the purse. In a further surprise the woman opened the purse to find that it contained more money than when she had lost it. A voice-over by actor Kevin Bacon then asked, "If you could own the same mutual funds and get cash back every year, why on earth wouldn't you?"

A second spot, titled "New Neighbors," promoted E*Trade's Mortgage on the Move program. In it a suburban couple watched their new neighbors move in. Out of the car and moving van emerged a host of horrors, including crying babies, armed skinhead adolescents, screaming adults, barking dogs, dirt bikes, alligators, and killer bees. In this spot Bacon intoned, "When it's time to move, E-Trade's new mortgage on the move goes with you. If you could move and keep your low mortgage rate, why on earth wouldn't you?"

The new E*Trade television commercials aired on a variety of national cable channels. They also aired on network television during the NCAA basketball tournament in March. In addition to these spots (which were the primary focus of the "Why Wouldn't You" campaign), other elements included a companion print campaign that ran in national newspapers and magazines, some direct marketing, in-store promotional pieces for E*Trade's walk-in branches, and an Internet component that included Web banners.

OUTCOME

E*Trade's chief marketing officer resigned two months after the "Why Wouldn't You" campaign broke and was replaced in June 2004 by Nicholas Utton, who soon put the account up for review once again. Martin/Williams was part of Omnicom Group, and Utton was portrayed in the press as an "Interpublic Group loyalist." While head of marketing at JP Morgan Chase and MasterCard International, he had forged a successful relationship with Interpublic shops McCann Erickson, Foote Cone & Belding, and the Martin Agency. It was not surprising, therefore, when E*Trade and Martin/Williams severed their relationship in July 2004. By all accounts it was an amicable parting. Martin/Williams spokesman Steve Rudolph explained to the press, "It's a business of relationships," while in a released statement, president Steve Collins noted, "With a change in marketing leadership often comes changes in agencies and we wish E*Trade the best as they move forward."

Although Martin/Williams did not have the chance to roll out additional phases, the "Why Wouldn't You" campaign succeeded in improving E*Trade's overall business as well as benefiting the firm's mutual fund and mortgage products. According to the agency E*Trade added nearly 372,000 new accounts in the six months after the campaign began. E*Trade also experienced a 35 percent increase in overall assets compared to the previous year. Moreover these assets were spread across a wider range of products. The campaign's mutual fund component, according to Martin/Williams, succeeded in attracting a higher-value customer, resulting in a 22 percent increase in E*Trade's mutual fund business. Likewise E*Trade's mortgage operation enjoyed a 33 percent increase in direct mortgage originations, although the company also benefited from a refinance boom caused by low interest rates. The campaign garnered no advertising awards, but it accomplished the goals laid out by the client. It was only a change in management at E*Trade that was responsible for Martin/Williams losing the account.