In an effort to build demand for their services, two high-profile Internet technology companies are mounting mainstream advertising campaigns.
E-Trade Group and Cybercash Inc. both will run ads on television and in a variety of print publications. Palo Alto, Calif.-based E-Trade has allocated about $25 million for a yearlong campaign that starts today. Reston, Va.-based Cybercash declined to discuss the cost of its ads, which have been running for a few weeks and will continue through the fall.
The emergence of these campaigns is one example of Internet-based financial services trickling into mainstream culture.
Further, the willingness of E-Trade and Cybercash to spend more on marketing shows the eagerness of Internet-based companies to break out of their nascent development stages.
"Now is the time to go to mainstream America," said Christos Cotsakos, E-Trade's president and chief executive officer. "We are ready to rock and roll."
E-Trade and Cybercash are similar in many ways. Both went public last year, and both help consumers use the Internet for financial transactions. However, their fortunes in the market have been strikingly different in recent months.
Cybercash's stock benefited last year from investors' infatuation with anything Internet-related but has since fallen on hard times, dropping 18% since the beginning of this year, to $18.25 midday Friday.Meanwhile, E- Trade's stock has caught fire.
The price of the company's shares has risen 210% since the beginning of the year, to $35 midday Friday.
Executives from both companies said their ads are aimed at getting the a wider base of users interested in their products.
E-Trade, which provides on-line brokerage services, is selling the idea that "Someday we will all invest this way" through its ads.
The television and print spots target people 25 and older, according to Mr. Cotsakos. E-Trade currently processes about 12,000 stock trades a day, charging $14.95 per transaction.
Cybercash, which makes software for secure financial exchanges using the Internet, is targeting merchants, billers, and banks with its campaign.
"We are taking it to the next level," said Richard Crone, vice president and general manager at Cybercash. "Up until this point we have been educating the market. Now's the time to build demand."
The recent spike in E-Trade's stock price has been fueled in part by recent speculation that a large bank would buy it.
Mr. Cotsakos said he is not shopping the company, but he is open to creating alliances and cobranding relationships with financial institutions. "We have spoken to a lot of key players at big banks, and they are very excited and interested in seeing if we can work out some sort of cooperative deal," Mr. Cotsakos said. "Fifteen months ago most banks wouldn't even talk to me."
Mark Wolfenberger, analyst at Deutsche Morgan Grenfell in New York, said any deal between E-Trade and a bank would be a defensive move on the bank's part.
"If you were a bank, you would want to co-opt an E-Trade," he said, because "the world has moved so dramatically away from your franchise."