Advertising Lights the Candle as Online Brokers Catch Fire

Online brokerages like Ameritrade rock on with promises of easy money and hassle-free trading.
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Let's light this candle! -- Stuart, the copier dude.

SAN FRANCISCO -- Somewhere, deep in


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blowout earnings number reported last week, there is Stuart, a guy with a pierced nose and red, green and blond hair, a guy whose face knows the cool chill of photocopier glass. Perhaps you recognize Stuart; indeed, if you're like so many


addicts, you can't help but know Stuart.

That's because Stuart is the cult star of a riotous television ad campaign that is a focal point of Ameritrade's business strategy. A successful expenditure of $12 million to $15 million in advertising for the fiscal second quarter led to an explosion in new customers and helped push earnings north of $73.9 million, or 14 cents a share, twice the

First Call

consensus estimate.

Advertising has become the main game in the online trading world with



announced plans to spend $100 million to $150 million this year and similarly aggressive pitches from




Morgan Stanley Dean Witter's


Discover Brokerage Direct

unit. These campaigns mark the battleground where the mounting online trading war will be fought. And yet these very ads are stirring consternation and even controversy far and

wide -- and there is no greater offender than Stuart. Because if Stuart can trade ... dude,


can trade.

The campaign is the brainchild of Peter Horst, Ameritrade's vice president of marketing, and New York ad agency

Ogilvy & Mather

. Surprisingly, in the ad community, the ads are nearly as revolutionary as online trading is to the brokerage houses. Rather than tightly scripted marketing messages, these ads are largely improvised. "There was no storyboard, there was no script," says Horst. "We just hired some actors, told them some points we wanted them to hit -- eight bucks a trade, free research, demonstrate that it's quick and easy -- and it was all improv from there. I've done millions of ads, and this was the most unusual I've ever been through. From a client perspective, it's a little nerve-racking."

Horst and the agency came up with a general premise, then relied on director Dewey Hicks to assemble the actors and the scene. Two cameras were used on every shoot, and the actors were set free to talk about their notions of online trading. They were not, it's worth noting, traders. "We thought about using real customers," says Horst, "but real people sometimes don't look good, they can be uncomfortable on camera, and ultimately they aren't convincingly


. So we decided to find actors who can talk honestly and convincingly about online trading."

The casting of the Stuart character was Hicks' suggestion. Ogilvy & Mather and Horst sought a foil to the "Mr. P" character, a corporate muckety-muck who's befuddled by his computer and online trading. As the advertising execs huddled in a New York conference room, Hicks popped in a tape of a

Cherry Coke

commercial starring Michael Maronna, 21, a

SUNY Purchase

student he'd stumbled upon. The tape rolled with Maronna, dressed in an odd coat carpeted with fishing lures, descending into a lake up to his nose. The camera tightens on Maronna as he wryly raises an eyebrow. The next shot shows Maronna standing on a street corner, with dozens and dozens of fish clinging to his coat. "That," said Horst, "is our guy."

Filming the spot was no easy matter. Cast and crew crammed into a small New Jersey insurance office one October weekend, and once they'd asked Maronna to improv, he wouldn't stop. "He's uh, a really highly intelligent guy, and like many, he got bored quickly," says Horst. "He would come up with all this clever stuff, but then he'd refuse to repeat it. Every time we did a take we'd say 'do that again,' and he'd just do something else."

But the result is a lively, spontaneous ad, with tongue firmly in cheek. Office worker Stuart, caught in the act of photocopying his face for a party invite, is asked by Mr. P for some help setting up his online trading account. As Mr. P gingerly pecks away at his Web browser, Stuart eggs him on: "Let's light this candle!"; "Catch the wave of the future, m'man!"; "Yeah!" The off-the-cuff throwaway lines play well to the


zealot sure to see the ads repeatedly. But it's also informative that the notion of online trading is so ingrained in popular culture that even improvisational actors can get right to the essence of it.

Ameritrade Rocks On
Stock price of Ameritrade over six months

Perhaps that's because the real appeal of online trading is rooted deeply in our values: Do it yourself. Don't trust the powers that be. Take control over your own life. Enjoy the successful moments as they come along. And most of all, work toward the American dream of a better life.

It's the dreaming, of course, that bothers so many pundits. Another Ameritrade ad has a young mother cutting short an afternoon run to make some quick cash trading a biotech stock. A

Merrill Lynch


ad has a couple imagining palatial pink homes with manicured gardens and fountains. And then there's Discover's good Samaritan tow-truck driver who's traded his way up to his own island. Critics like the

Los Angeles Times'

Tom Petruno



Ron Insana

have faulted these ads with raising unrealistic hopes. Indeed, they've even suggested that dreams of tropical island retreats could undermine the market with notions of unrealistic returns.

Right. And


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is encouraging hazardous fantasies about talking lizards. Or maybe

American Express

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is creating a public nuisance by suggesting that ordinary guys can crack wise with the aplomb of

Jerry Seinfeld


It's baloney, of course. The underlying suggestion by these humorless critics is that amateurs -- regular people -- have no place in the public markets. Which is exactly what the big-margin boys would have you believe. I know a bond trader who often espouses his most fundamental worldview: "People are basically stupid." The old financial powers -- on the Street and in the media -- still fear the average folk.

To be sure, fools are easily separated from their money, still. But some of those fools surely number among the 83% of fund managers who underperformed the

S&P 500

last year.

"Stuart isn't showing up in a yacht or a beach house," says Horst. "Brokerages may be held to a higher standard than, say, I might have been back when I worked at

General Mills

(GIS) - Get Report


U S West


. Even in our attempt to make people smile, I would still want to be conscious about creating any inappropriate impressions."

The viewing public is probably too smart for that, no matter what the critics spout. The success of Ameritrade's recent ad campaign suggests that the public is smart enough to get Stuart's wisecracking.

Indeed, the success of Ameritrade -- and of its competitors -- suggests that the Wall Street establishment has two big problems on its hands. The general public seems to believe in the Internet -- whether Wall Street is ready or not. And the general public seems ready to abandon traditional brokerages -- whether Wall Street is ready or not.




Who is the most consistent threat to the sanity of the markets?

A country-owning, truck-driving 300-pound online trader

A ditzy, mutual fund-owning soccer mom

A Generation-X, multipierced, copier-abusing and surely glue-sniffing investment adviser

Merrill Lynch Internet analyst Henry Blodget