Sure the babies entertain – but do they get results?

I *love* the ETrade baby ads. I’ve said it before. I absolutely love them. But, do they work?  I really wonder if – aside from the buzz value – these ads have achieved any meaningful, measurable goals.

A recent piece in Fast Company (March 2010) lauds Grey New York, the agency that created the spots, as one of the most innovative companies in the world (#24 to be exact). Okay, I agree. These ads, and other examjples of Grey’s work provided, are innovative – but, do they get results?

I will acknowledge that I am not privy to the specific goal(s) behind this campaign. However, having led a marketing department in a publicly held organization, I know that stock price tends to be a primary area of focus and most (all?) activities of the organization tend to be aligned with maintaining or increasing the price of those shares. So, I’m going to make a leap and assume that ETrade has that same goal in mind. After all, would shareholders want the company to spend what I’m sure is millions of dollars without some  positive impact on share price? I doubt it.

So, how is their stock doing? Not that great. Currently at about 1.65/share, down from a 52-week high of 2.90. Their EPS is (1.1.8).

According to, ETrade’s primary competitors are Charles Schwab, FMR (better known as Fidelity) and TD Ameritrade. Again, I’m going to make an assumption. I’m going to assume that ETrade, like most companies, is concerned about its performance relative to its primary competitors. So, how does ETrade compare?

Charles Schwab is trading at about 18.43, with a 52-week high of 19.87, EPS of .68 and P/E of 27.10.

Fidelity is trading at about 14.82, with a 52-week high of 22.85, EPS of .98 and P/E of 22.85.

TD Ameritrade is trading at about 19.06, with a 52-week high of 21.30, EPS of 1.02 and P/E of 18.50.

Certainly ETrade is out-advertising its competitors. But is it outperforming them? I’m not a financial expert, but based on these numbers, I would say “no.”

ETrade’s ads are entertaining. But, I don’t believe that the ultimate goal of advertising should be to entertain. Of course entertainment value is important in advertising. But only to the extent that the ad captures audience attention. After that, ads, to be effective, must do more. They must influence consumer behavior in some measurable way to ultimately drive business results. Otherwise, what’s the point?

If ETrade and Grey’s goal is to entertain, they have certainly achieved it. If, on the other hand, the goal is to drive business results thorugh advertising, that does not appear to be happening. And, in my opinion, that’s the same result that far too many really clever, really cute and really fun-to-wach commercials achieve. I’m not sure who really benefits from that.

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