Schwab ads aim at keeping it on top in Britain

Charles Schwab Corp. is breaking ad campaigns in Britain and in Latin America for the first time.

This nation’s No. 1 discount broker seeks to dominate the budding online trading business overseas much as it does in the market here, where, according to U.S. Bancorp Piper Jaffray, it claims 3 million of the 12 million online brokerage customers.

In March, the San Francisco company plans to open its British campaign. The ads, from newly selected agency Abbott Mead Vickers BBDO, will tout Schwab’s access via the Internet, branches and the telephone.

The approach is intended to quell British consumers’ fears of stock investing, especially online, says London-based Russ Shaw, senior VP for international marketing at Charles Schwab Europe.

Britain is Schwab’s priority overseas market this year, says Len Short, executive vice president of advertising and brand management for Schwab’s retail, institutional and international divisions.

no.1 in blighty

Already, Schwab.com ranks as Britain’s largest online broker, with about half of the 100,000 investors online. The market there is fast becoming the most competitive in Europe, says John Payne, an analyst at Boston-based Cerulli Associates.

Established banks like Barclays PLC are offering online trading and DLJdirect, E*Trade Group Inc. and TD Waterhouse Group Inc. entered the fray last year.

“One of the messages we want to get across is that with a bit of homework and preparation, it’s not as difficult as you think [to invest independently],” Mr. Shaw says.

Schwab ads in Britain will run on the Internet, in print and — for the first time — on the telly. Schwab will also conduct, at its offices in London, Birmingham and Milton Keynes, seminars instructing customers in how to use its website.

The company also will develop segmented services, similar to U.S. programs like Signature Services (for well-heeled customers), as the market matures, Mr. Shaw says.

Schwab is planning its first ad campaign in Latin America, the fastest-growing market for Internet services in the world. The number of Internet users in the region is predicted to grow to 34 million by 2001, from the current 8 million, according to Jupiter Communications in Brazil.

Latin America is also the fastest-growing region for Schwab International, which offers trading in U.S. markets to residents in the Latin region and the Caribbean.

Schwab is facing competition from banks, especially Brazil’s giant financial institutions, as well as aggressive start-up financial websites such as Patagon.com and ZonaFinanciera.com that plan to offer trading in multiple Latin America markets.

To be different, Schwab’s upcoming campaign will position the company as a full-service broker, targeting affluent investors with long-term services such as retirement planning and advice, says Lee Moran, the company’s Coral Gables, Fla.-based director of international marketing in the Latin American/ Caribbean region.

“We’re going for a much softer appeal emotionally — one that builds a sense of stability and long-term commitment,” he says.

Along those lines, Schwab will emphasize its Portuguese- and Spanish-speaking customer service representatives to appeal to Latin Americans’ desire for stability.

“We’ll have print ads with a phone number so [clients] can get in touch with us in their own language — it’s important to stress that,” says Luis Souto-Major, Schwab’s international region manager for Brazil, who is also in based in Coral Gables, Fla.

The campaign will include ads in the Wall Street Journal Interactivo and CNN en Espanol as well as web ads through a partnership with StarMedia Network. Schwab does most of its Latin American advertising in-house, but works with Puerto Rican agency Marti Flores Prieto & Wachtel for specific Puerto Rico pieces. It recently named Miami-based Visualcom for its Latin region web ads.

million uses in asia

At the same time, Schwab is gearing up for the relatively new Asian online market. U.S. research outfit Meridien Research predicts online trading accounts in Asia will exceed 1 million by the end of 2000.

In Hong Kong, where Schwab has operated for several years, the broker hasn’t run many ads yet, since most customers come from referrals, says a Schwab spokesman. Most of Schwab’s Hong Kong customers are savvy, active traders who do 80% of their trades online.

The few ads so far created by Hong Kong agency Ludgate Asia have positioned Schwab as a full-service broker, placing emphasis on its branch office. “Schwab will have to position itself as a middle- to upper-market brand because the discount end of the market is saturated,” notes Ramin Marzbani, principal analyst at Sydney-based www.consult.

Elsewhere in Asia, Schwab only recently announced partnerships in Japan and Australia. Other U.S. online brokers, including TD Waterhouse and E*Trade, have moved into Japan and Hong Kong, and local companies such as Japan’s Nomura Securities are long-established.

Japanese marketing plans are still being decided but are likely to emphasize the financial stability of Schwab’s local partner, Tokio Marine and Fire Insurance Ltd., and educate people about investing and the stock market, says a Schwab spokesman in San Francisco.

Schwab already operates a Japanese website that provides information to potential investors.