ANA 2008

What Today's Troubled Businesses Can Learn From E-Trade

CMO Nick Utton and Spark's Ken Zasky Share Tips on How to Survive a Credit Crisis

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ORLANDO, Fla. ( -- E-Trade Financial may have had a startling fall from grace a year ago, but the fact that it's still around offers hope for today's battered financial companies, the marketer and its media agency told an audience during the Oct. 19 general session of the Association of National Advertisers' annual conference.
Nick Utton
Nick Utton Credit: Art Beaulieu

Nick Utton, chief marketing officer at E-Trade, and Ken Zasky, president of Spark Communications, shared their playbook for how to survive a credit crisis. On Nov. 9 of last year, E-Trade admitted that it wouldn't be able to stick by profit forecasts, as subprime loans and mortgage-backed debt took their toll. Then, on Nov. 13, its stock plummeted nearly 60% following an analyst's use of the word "bankruptcy" in connection with the financial-services firm. Terrified investors pulled out more than $6 billion in assets between November and December.

Mr. Zasky said that the day E-Trade's crisis took hold, he was able to get Mr. Utton on the phone within 10 minutes. That good client-agency relationship enabled the pair to quickly come up with ideas for how to handle the situation.

No riding it out
"Speed is not negotiable with Nick," Mr. Zasky said. "Speed went a long way to making sure it didn't get out of hand. ... The first instinct may be to ride it out, but you can't ride it out in the basement."

E-Trade moved quickly to reassure panicked investors. It issued statements saying it was not going bankrupt, and it evaluated its advertising. Mr. Zasky said the firm went out and used every channel available, including high-profile digital advertising units on sites such as Wall Street Journal Online. E-Trade also evaluated which media sources led to higher-quality signups for new accounts, meaning consumers who were more active with their trading. Online, that led to the elimination of several websites that historically had been a large part of the media plan.

Once it had taken steps to reassure customers, E-Trade turned its attention to reassuring media partners that bills would be paid.

"When a crisis hits, being out of sight is the same thing as being out of mind," said Mr. Utton. "The message needs to be out there; you need to spend."
Ken Zasky
Ken Zasky Credit: Art Beaulieu

Where it spent
And spend E-Trade did, purchasing two high-profile Super Bowl spots in February. In creating the campaign, Mr. Zasky and Mr. Utton said it was important that the approach be people-focused, leading to a series of ads shot as if from a webcam of a talking baby buying stock over the internet using E-Trade. "Baby," created by WPP Group's Grey, New York, won the top slot in TiVo's annual Super Bowl commercial chart.

"It takes years and years and years to build up a good brand and you could lose the brand overnight," Mr. Utton said. "We went through a scary moment where consumer confidence had a huge question mark next to it." His advice: "Be honest. Be direct. Be transparent to the consumers."

Today, E-Trade has won back consumers, touting 1,000 new accounts every day. But it's still not immune to the current financial turmoil, as earnings continue to be hard hit. A loss is expected for the third quarter, the results of which will be announced tomorrow.

"I wish I knew," Mr. Utton said, when asked how the crisis would unfold. "I don't want to be a pessimist; I'm being a pragmatist. The storm will continue. Hopefully, it bottoms out and moves out. In between we'll work very closely with our partners and our brand ambassadors."
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