Mercantile Exchanges Turn to Marketing as Trading Becomes Digital

Competition for Business Intensifies in Global Arena

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CHICAGO (AdAge.com) -- The Chicago Mercantile Exchange is introducing its first branding effort, an estimated $5 million global print push that could usher in a new marketing era for the obscure world of derivatives trading.
The Chicago Mercantile Exchange is breaking its first branding effort.
The Chicago Mercantile Exchange is breaking its first branding effort.

Changes in the industry
The push, which comes amid an industry shift to digital trading, is designed to enhance the exchange's profile around the world by showcasing some of the high-profile hedge fund executives, money managers and insurance stalwarts who use its services. The mid-seven-figure effort will run ads in global financial publications such as the Wall Street Journal and Forbes.

"We've found that we're highly respected within the world of our users," said the Chicago Mercantile Exchange's chief marketing officer, John Roberts. "Our challenge is to convey that beyond our present users."

That's a new challenge for exchanges like the Chicago Mercantile Exchange as trading moves off the floor and into a more global arena. At the Chicago Mercantile Exchange today, for instance, more than 70% of all its trades are made electronically, compared with 15% in 2000.

As a result, exchanges all over the world can compete aggressively for business, which was the driving force behind a recent round of mergers within the European market.

'It's the Wild West'
"It's no longer how many guys you can cram on the floor during trading hours, its global and 24/7 now," said Linda Darragh, director of the Polsky Center for Entrepreneurship at the University of Chicago. "It's the Wild West."

To assert themselves in that frontier environment, companies such as the Chicago Mercantile Exchange and the New York Mercantile Exchange are ramping up marketing. A NYMEX spokeswoman said the exchange is more focused on advertising, but wouldn't on future plans, citing a U.S. Securities & Exchange Commission-enforced "quiet period."

Chicago Mercantile Exchange's glossy ads, which begin running today, feature prominent financial-world figures, such as Ken Griffin, CEO of the $12 billion Citadel Investment Group hedge fund, and top executives at financial giants such as HSBC Bank and Swiss Re Capital Management.

The ads were produced in-house by the exchange, with assistance from Chicago design firm VSA Partners.

Publicity-shy CEO
The ad starring Mr. Griffin shows the generally publicity-shy executive stepping over a fault line outside a downtown office building. "Risk is what you make of it," reads a quote attributed to him in the ad. Another spot shows a Swiss Re managing director in a tornado of paperwork, his tie blown over his shoulder, as he observes a need to "weather the extremes."

"A futures contract can be an intangible kind of thing," Mr. Roberts said. "We want to use people who are globally admired as role models who people can see use our services."
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