E*Trade Says Mktg Spending To Remain High In FY00 2Q
By GASTON F. CERON
(This article originally appeared late Monday)
NEW YORK -- A senior executive at E*Trade Group Inc. (EGRP) said the online brokerage hasn't scaled back its marketing and advertising efforts in the current quarter, as it continues to battle other brokers for new clients.
Michael Sievert, E*Trade's vice president of marketing, told Dow Jones Newswires that E*Trade's advertising spending in its second fiscal quarter is "likely to be our highest quarter compared to recent quarters." E*Trade's fiscal year ends in September.
The Menlo Park, Calif., company, spent $119.5 million in selling and marketing expenses in its first fiscal quarter. And it is likely to spend $160 million total on marketing in the current quarter, according to a research note issued Monday by Richard Repetto, an analyst at Lehman Brothers.
Along with other Internet brokerages, E*Trade is waging an intense advertising war for new customers. In the last three months alone, E*Trade has spent millions of dollars on such promotions as sponsoring the Super Bowl halftime show and a Tina Turner concert tour. And Sievert said the company has high hopes for its latest promotion, a stock-picking contest dubbed "E*Trade Market Madness."
The heavy spending has helped E*Trade and its rivals expand their client rosters, but it has also taken its toll on the bottom line. E*Trade, for example, is currently unprofitable and analysts don't expect it to be in the black until the third quarter of the fiscal year ending in September 2001, according to data from First Call/Thomson Financial.
Despite the advertising blitz, E*Trade has been selling some of its media space. Sievert said the company buys advertising well in advance of when its spots are actually aired or published, and so E*Trade sometimes ends up buying or selling extra advertising during the course of a given quarter. This time this is being done as a way "of redirecting some of the marketing spending to other things," although Sievert said the sales represent a "very small" percentage of the company's media budget. |
