I go online at a Tully's coffee shop every few weeks, but I don't recall ever being pitched something outside the usual Costa Rican blend when logging in to its free Internet connection.

But today, Charles Schwab owned the Tully's landing page, with three banners running across the page touting its High Yield Investor Checking among other things (see below). The two on the right have financial questions that, when clicked, take the user to an article on the Schwab.com site (see last screenshot).

The banner lower-left is more interesting. Little squares scroll across the banner in a very Web 2.0 way and, when clicked, additional info is delivered directly within the banner. Users stay on the Tully's page unless they click the Open an Account Today button.

The three scrolling graphics include:

• ATM fee graphic leads to an ATM calculator (see below)
• The High Yield Investor Checking graphic (not shown) leads to a description of that product
• The map leads to a short animated audio visual piece promoting ATM access and the High Yield account

Comment: This type of grassroots marketing can be done by financial institutions of all sizes. Just find a local coffee shop or cafe and see if they'd like a little cash to subsidize that bandwidth each month.

Schwab banner ads on Tully's landing page displayed after logging in to free WiFi at a coffee shop (Seattle, 3 PM, Friday, 5 Dec 2008)

Clicking on How much do ATM fees cost you? in the banner above opens the following tool in the window. >>>

Users can move to the slider to calculate the cost of a foreign ATM.

Schwab landing page after clicking on question in right-hand banners
(link, 5 Dec 2008)

I never thought I'd see the day that Charles Schwab featured a checking account on its homepage (see note 1). Even Schwab, that built its business catering to do-it-yourself individual investors, wants a piece of those cash balances sitting in non-interest checking or low-rate checking/savings accounts.

With many major banks still paying next to nothing on deposits (as low as 0.10% annually on savings, see note 2), direct banks and other non-traditional outlets are still looking to grab deposit share even though most have dropped their promotional rates below the magic 5% mark (previous coverage here). 

Schwab.com homepage (18 Oct. 2007, 11 a.m. Pacific)

Schwab login page (18 Oct. 2007, 11 a.m. Pacific)

Note:

1. The bank promotion is on Schwab's main site, NOT a special landing page or Schwab Bank page.

2. Memo to US Bank: Don't you think it's time to raise your savings account rates? I have my checking account at US Bank and was thinking of parking some cash for a few weeks in an interest-bearing account. But I was shocked when I looked at the rates. There is nothing I could apply for online that would pay more than 0.40% and most paid just 0.10% (see inset).  

That's no typo; one-tenth of one percent on savings accounts across all balance levels. That's less than a $1 per month on a $10,000 balance! Pre-tax.

There's only one deposit account that cracks the 1% mark, Maximum Money Market, which pays 2% to 2.5% for balances greater than $10,000. But you can't even apply for that one online, you have to visit a branch. 

I don't care how much you make on the so-called lazy money, a rate page that looks like US Bank's (see screenshot above) is a marketing and PR disaster.  

The social networking phenomena has left financial services mostly behind. Aside from a few banner ads here and there (see E*Trade's clever animated ad on MySpace here), financial institutions have stayed away. The risks of a poor brand association have so far outweighed the benefits of putting the bank name in front of millions of younger users. An added problem: Do banks have enough street cred on these sites to make even a small advertising investment pay off?

Wells Fargo is the only major U.S bank to dare try. With four blogs, a MySpace page, an early Second Life presence, and even a placeholder on Twitter, the bank is dipping its toes in social media (see coverage here). 

But not all social networks are about music and dating. Gather.com, the self-proclaimed "leader in social media for adults," boasts 210,000 members across nine channels: books, food, health, movies, music, news, politics, travel, and last but not least, money. The money channel, where I became member number 9,619 yesterday, has member posts in the usual areas: personal finance, investments, real estate, taxes and so on.   

Last month, the company announced strategic advertising partnerships with five companies including Starbucks, Sony and Charles Schwab who implemented an impressive branding of the website's Money channel <money.gather.com> (see screenshot below). 

Analysis
According to Compete, more than 11% of the nation's online time is now logged at MySpace. Let me repeat: across all 200 million or so U.S. Internet users, more than 11% of the time is spent at MySpace. In terms of pageviews, it's even more dramatic, with the site accounting for 16% of all pageviews in December.

That level of usage is astounding. It's more than the combined total of eBay, Amazon, Google, MSN, AOL, and YouTube. Only Yahoo has anything close, with just under 9% share of time online. The only financial company cracking the top-20 was Bank of America, number 15 with 0.34% (see the full table at Compete's blog here).

Top 5 Websites in Attention
% of total time spent online in United States (Jan 2007)

1. 11.3 % myspace.com  
2. 8.6% yahoo.com   
3. 3.5% ebay.com
4. 3.4% msn.com
5. 2.1% google.com

Source: Compete.com, Feb. 2007

There is no way that advertisers will ignore this much traffic. Financial institutions will eventually jump into social media sponsorships, especially as specialized areas are developed, such as Gather's Money channel. Advertising dollars follow the eyeballs so long as there is a viable advertising platform. And you can bet the large media companies that own the social networks will make sure they "monetize" the attention as effectively as possible.  

Schwab "owns" the main Money page at Gather.com 

Note:

1. For those of you who haven't looked at the company financials recently, Schwab has about 7 million accounts and 300 branches. Here's the details from the press release (here):

The Charles Schwab Corporation (Nasdaq: SCHW) has more than 300 offices and 6.8 million client brokerage accounts, 570,000 corporate retirement plan participants, 149,000 banking accounts, and $1.3 trillion in client assets as of January 31, 2007.

Yesterday, I noted that TD Waterhouse was giving away iPod nano's for new accounts. Well, it turns out that is nothing in the high-stakes game of bagging higher-balanced brokerage accounts.

In the middle of its homepage, Charles Schwab <schwab.com> is offering a night on the town in NYC, including 2 or 4 Broadway show tickets, dinner, and even a night in a luxury hotel. What's the  catch you ask?

Just $100k, $250k, or $750k in new money depending on just what level of "free" you'd like (click on inset for details). The deposit does NOT have to made to a new account, but like TD, all retirement and institutional account are excluded. (Click to view the homepage screenshot, links do not work)

Start saving your pennies, you've got until March 15, 2006 to qualify. 

--JB

Don’t put off ‘til tomorrow what you can do overnight.

                       — Teaser copy on Schwab direct mail to clients

One of the biggest challenges in financial services marketing is getting customers to follow through and transfer their assets to your financial institution. Full-service brokers handle the process on behalf of the customer, diligently pushing the transaction forward so the individual broker can begin earning commissions.

But how do you get customers to act without a high-paid salesperson manually handling the transfer?

Charles Schwab (San Francisco, CA) came up with an innovative solution using Federal Express as the trusted courier. In a direct mail package to prospective clients, Schwab provided the following:

• short introductory letter from Melinda Pahl, VP Marketing
• instructions
• asset transfer form*
• prepaid FedEx overnight mailing label addressed to Schwab
• co-branded Schwab Overnight  6 x 9 inch envelope

All in all it’s an impressive strategy and worth considering for your asset gathering initiatives.

*A copy of the customer’s most recent statement from the other financial institution was also needed.

Charles Schwab

www.schwab.com

Sony Corp. is contemplating a move into the online brokerage industry for the Japanese market, using Schwab (San Francisco, CA; 1.7 million active online accounts) as a joint venture partner. Sony already owns an insurance company. (Source: Reuters, 9/22/98, www.sjmercury.com/business/tech/docs/079882.htm )

Charles Schwab

www.schwab.com

Hoping to cash in on the Internet stock hysteria, Charles Schwab (San Francisco, CA) released figures comparing its e-commerce impact to other Internet players. Schwab has seen its market value fall by $2.5 billion (25% decline) in the past 90 days while AOL, Dell and Amazon.com gained a combined $35 billion.

Source: Schwab, Online Banking Report, 6/20/98

Despite its industry-high price of $29.95 per trade, Schwab continues to have more online users than any financial services company, bank or brokerage. As of May 31, Schwab reported 1.74 million active online accounts, an increase of 500,000 compared to 1.24 million at the beginning of the year. If they were to continue that pace, its account total would be 2.8 million by year-end.

Source: company reports

Schwab’s interbank transfer (demo) screen at www.schwab.com/Trading/demo/html/mainmenu.html Choose an account, enter the amount and date in the screen below and press enter.

MoneyLink screen #2.

In a sign of things to come, Schwab is one of just a handful of major financial institutions that makes it simple and easy to transfer funds to and from other banks. Its MoneyLink Transfer feature allows users to establish current and future-dated transfers by simply checking a box, entering the dollar amount, date and pressing enter.

We understand why you might drag your feet on this, what’s the business case for making it easier to take money out of your bank? But five years from now every online banking program will offer this feature. It might pay off to be first, encouraging account consolidation with in-bound transfers.

Contact: Beth Sawi is EVP Electronic Brokerage, (415) 627-7000.

Charles Schwab (San Francisco, CA; $270 billion; 4.2 million accounts) reported that its online account base grew to 712,000 active accounts in February, an increase of nearly 100,000 accounts during the first two months of the year. In comparison, account growth averaged 23,000 accounts per month during 1996. Total assets in online accounts topped $50 billion in February, a gain of $8.3 billion YTD.

Schwab claims a 50% share of the online investment market. Schwab, which pioneered the discount brokerage industry in 1974, has offered online trading since 1984. Web-based trading began last summer. Schwab serves its 4.2 million active investor accounts primarily through telephone and PC trading. Although its 236-branch network is critical for asset gathering and credibility. Last year Schwab said that 60% of its calls and 36% of trades were handled by automated voice response or computer.