The Purpose of Advertising – to Entertain, or to Sell?

I love the E*Trade commercials with the talking babies. They’re cute and clever and they make me laugh. In fact, every time I see one – regardless of how many times I’ve seen it previously – I laugh. I like them. They’re well done. Good production values. Clever. But, do they sell?

Hard to say. A quick check online reveals that according to E*Trade Financial Corporation’s monthly report for Jan., 2010,  U.S. brokerage accounts decreased by 2,392. Shares are selling at around 1.55/share, down from a 52-week high of 2.90. By contrast, competitor Ameritrade’s shares are around 18.o0, down from a 52-week high of 21.90, but trending upward. I don’t recall seeing any Ameritrade ads…

The point – advertisers need to make sure that their advertising is designed to sell (or, at a minimum, raise awareness/preference), not just entertain. Certainly capturing attention is important. Raising awareness is important, critical in fact, and the primary purpose of most mass media advertising. But, unless that awareness is at some point converted to real, bottom-line results, these efforts are wasted.

I’m an Ameritrade customer. Have been for a  number of years and am fairly satisfied with their services. Can’t recall ever seeing an advertisement for Ameritrade and really don’t remember how/why I ever started using the service. But, despite the fact that I really enjoy their competitor’s ads, I’m not likely to change.

Now, I do acknowledge that for those who are not currently using any sort of online brokerage services, E*Trade’s spots would seem to do a great job of generating awareness. But, does that awareness translate into name recognition? Preference? Action? Can’t say, but my guess is no. Probably not. And probably not commensurate with the significant cost of producing and airing those spots.

Which is a shame. Because, yes, they are well done. But unless they generate results, does it matter?

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