Will New CMO, Agency Put E-Trade's Baby to Bed?
Maybe it's time to put baby in the corner.
Following E-Trade's divorce from longtime agency GreyNew York, the Talking Baby's five-year run as the chubby-cheeked face of the online brokerage is in serious jeopardy.
At the time it was developed, the campaign conceived by the agency under former E-Trade Chief Marketing Officer Nick Utton was right on strategy, promoting then-nascent online trading as a task so simple that a tot could do it. Ads appeared in multiple Super Bowls and the overall campaign went on to rank among the most recognizable in recent history. Within adland, the creative and account were touted as a main driver behind Grey's turnaround.
But recent times haven't been so simple for E-Trade. The company is on its seventh -- yes, seventh -- chief executive, including interims, since 2007. And under new CMO Liza Landsman, the brand is undergoing an agency review -- one with a tinge of intrigue. In late June Grey put out an internal memo saying it had resigned what it referred to as the "game-changing" account. The marketer followed with the news it had begun an agency-review process in which Grey would not participate.
E-Trade is now looking to develop a brand message that speaks directly to investors rather than one targeting a mass market, according to people familiar with the matter, and intends to do more conservative work, in line with its competitors. That might leave little room for a trash-talking infant.
"The key thing is to ask, 'What's the strategy?'" said Karl Heiselman, CEO of branding firm Wolff Olins. "The baby communicates 'easy' but in today's climate, is humor the best way?"
Making the decision to put the baby to bed easier is the fact that its impact appears to be waning. When the baby first appeared on the scene in 2008, E-Trade's YouGov BrandIndex "Buzz" score, which measures perception of the brand, shot up from one to 17. Its 2013 Super Bowl spot, however, got only a small consumer-perception bump, moving from seven to nine points.
More significantly, E-Trade's financial fortunes have been on the decline since the baby's Super Bowl debut gave it a burst of life in 2008. At risk of bankruptcy and bleeding money from soured mortgage bets, the company's appearance on advertising's biggest night, plus a cash infusion from hedge fund Citadel, brought E-Trade back from the brink. That year, it got the top ranking in SmartMoney's annual broker survey, which reflects brokerage performance as well as customer satisfaction.
By 2012, it had fallen to fourth. In April, E-Trade reported first-quarter profit fell 44% from the prior year. Just a month earlier, Citadel, its biggest investor, announced it would sell its stake in the company.
E-Trade's new leadership is now planning to cut $30 million from its total marketing spending as part of a broader cost-reduction program. The company spent $139.5 million on "advertising and market development" in 2012, according to a filing with the Securities and Exchange Commission. By comparison, rival TD Ameritrade spent $248 million on advertising last year.
Not the end -- maybe
A new CMO, a shift in target audience and an agency change would seem to spell surefire doom for a campaign, but the baby has proven itself to be a versatile actor. The campaign has morphed over the years, moving from one that sought to assuage investor fear in 2008 to one that was more supportive during the rough economy after 2009.
Ms. Landsman, its new CMO who joined from money manager Blackrock where she was global head of digital, isn't ready to write it off completely. She said in a statement that "elements of our existing campaigns could live on through some, but not all, mediums."
As for Grey, the WPP shop's creative reputation was reborn thanks to the baby, which has won it multiple awards. Prior to the campaign, the refrain most commonly associated with it was "Grey in name, Grey in nature." After the baby boomed, so did the shop's image -- it has since done award-winning work for DirecTV and Canon, and won huge accounts like Olive Garden, EmergenC and Gillette.
"I feel incredibly lucky to have worked on such an iconic campaign, with such a great client, for such a long time," said Tor Myhren, president and chief creative officer at Grey, and the "father" of the baby. "Selfishly, I hope the baby lives on."
Retiring such a distinct brand image is no easy decision for a marketer, of course, and the baby will be no different for E-Trade. An online poll by Ad Age found that 57% of nearly 500 respondents would keep the baby around.
But history indicates that when there is this much movement on
the client side, things tend to change (see sidebar). Besides the
new CMO, E-Trade has a new president, Morgan Stanley's Navtej
Nandra, and in January named Paul Idzik CEO. The former chief
operating officer of British bank Barclays indicated in a
conference call recently that he plans to "sharpen" the company's
All told, it's difficult not to feel like it's bye bye, baby.
The E-Trade talking baby is in a precarious position: The online brokerage firm is searching for a new agency and recently ditched the CMO who backed the campaign. If history is any lesson, the baby's days are numbered. Here are other major marketers who shook up their internal and external teams simultaneously:
The iconic "We Try Harder" tagline, created by DDB 50 years ago, was phased out in August -- just over a year after new CMO Jeannine Haas took over. The change also happened just months after Avis selected Publicis Groupe's Leo Burnett to handle its creative business. Avis reported that revenue increased 4% to $1.7 billion in the first quarter.
When GM announced a review for global creative duties on Chevrolet, the automaker said it didn't anticipate changes to its tagline, "Chevy Runs Deep," from Goodby, Silverstein & Partners. But a year later, after losing market share and the departure of CMO Joel Ewanick, it dropped the tagline in favor of "Find New Roads." GM reported a 3.6% increase in global sales in the first quarter, with Chevy driving most of the growth.
3. Burger King
Burger King killed off its creepy King mascot in 2011, a few months after the departure of CMO Natalia Franco. BK also ended ties with the agency that resurrected the King, CP&B. The change -- targeting more women and older customers -- helped, as did enlisting more mainstream celebs and a menu refresh. BK posted positive sales for the first time in years in 2012.