The company’s VP of online advertising explains how the company retooled Schwab.com to reflect a shift in brand focus.

iMedia Connection: How will Schwab's new direction be extended to the company's various online efforts?

Lane: My group's job is to evolve the prospect experience on Schwab.com to demonstrate the products and services that will ultimately support the new direction of the company. This experience might start with an online advertisement or an offline resource that drives a potential client to our Website. From there, our Web pages will describe our products and services, such things as how to schedule an appointment at one of our local branch offices, how to become a better investor, or how to talk with an investment specialist. This prospect experience is not about our Website, it's about showing prospects what types of products and services and experiences they can expect as a customer.

iMedia Connection: How successful were your online advertising efforts in 2001, and what does that mean for 2002?

Lane: In 2001, Schwab had a number of relationships with companies like AOL and CBS MarketWatch. And while these relationships were successful in their own right, we're moving our emphasis from distribution deals on Websites to enhancing the prospect experience on Schwab.com. In the past, we were more interested in the self-directed prospect during a fast market who was happy to click on a banner, try the offer and then make up his or her own mind about opening an account or not. We spent all this time negotiating placement and pay-for-performance and not enough emphasis on what happens after prospects come to our Websites.

Now that the market's slower, we're targeting a prospect with more complex needs. We want our prospects to understand what it's like to be a Schwab customer and not what it's like to just use our Website. It's a thoughtful decision; a decision no longer about online trading. We need to do more things like talk about our advice products and services, and demonstrate what it's like to have a relationship with Schwab. We're moving away form merely demonstrating our online abilities and moving toward demonstrating our abilities online. You will see significantly less emphasis on money spent on third party Websites, and more money spent on adding value to those prospects who visit our Websites.

iMedia Connection: Why less emphasis on driving traffic?

Lane: Until enough of our work is completed, it doesn't make sense to drive large volume of traffic to the Website. In 2001 and earlier, prospects were fine to click on a banner, give us their names and addresses so we could send them an application. This year and beyond, Schwab is targeting a prospect with more complex needs and therefore we need to integrate more offline stuff in the prospect experience. It's definitely a work in progress, and there's no sense spending advertising dollars to drive traffic to a work in progress.

iMedia Connection: What sort of lessons can other traditional brands take from Charles Schwab?

Lane: When the market was running fast, Charles Schwab was good at online prospecting. But you have to know your business model and know what you should do once your users get to your Website. I can see what online advertising does-it delivers cool messages. But it's expensive to be out there. You've got to know what the heck you want to do in advertising and know what you want to do once your users click on your Website. Schwab.com was purposely held as a separate online channel, and people's habits and tendencies tend to stay within those channels. When the market moved, we realized the needs of our clients could not be met by strictly an online experience. Our Website has to be reflective of our overall company mission and not just our online mission.

iMedia Connection: Your company recently launched a new advertising campaign, and I've seen the TV commercials. Why was there no online effort?

Lane: That campaign was designed to be a brand campaign. The objectives were to help people shift their perspective as far as what Schwab could offer. We're not sure a banner ad or other online things can help in that respect the way a TV commercial can. We use media depending on the job that needs to be done. I'm not saying that we'll never use online advertising for branding, but at the end of the day when you're trying to move people from one perception to another, nothing works like television and print. At least, we don't feel it does.

iMedia Connection: Are you saying that until the online industry can prove brand awareness, you're not interested?

Lane: Online does a decent job of improving brand awareness, but that's generally something that most established brands don't have a problem with. We've got to make it easier for people to understand the impact on brand from online advertising. And not just brand awareness-even the simplest postcard can drive brand awareness-but detailed brand attributes. I don't really care that I run banner ads, and the rep says the number of people who know Schwab went from 52 percent to 57 percent. There isn't an investor who doesn't know Charles Schwab. But some of those investors may not think of us yet as a superior alternative to a full-commission brokerage company. And that's the message we want to convey. An online banner ad is not going to move that needle. And the online advertising industry has done nothing as an industry to help advertisers measure complex brand attributes.

iMedia Connection: How would you describe your company's current view of online advertising?

Lane: It can be an effective traffic builder and an effective component in a direct response/prospecting marketing mix. But the brand result is not there, yet. Or it may be there, but we don't put a value on it because we can't measure it. We spent a good amount of money in the past, but the days of doing buys of 30 to 40 sites per month are probably gone. You can fairly say we are not on more than 1 to 2 sites at this point. We're putting our emphasis more on enhancing our online experience before we drive more people.

iMedia Connection: The industry is still maturing. In addition to creating a mutually agreeable language, what are the steps that will help the industry reach a point at which it can compete with traditional marketing channels?

Lane: It may have to compete for dollars, but I don't think you can compete as an advertising vehicle with TV and print. The key word is compete. I can tell you what happens when we stop advertising on TV or print, but I can't tell you what happens when we stop advertising online. I think online advertising has to find its rightful place somewhere between direct marketing budgets and traditional TV/print budgets.

iMedia Connection: A recent study indicated 12 percent of people's media time is spent online. Yet less than one percent of the top 50 advertisers' marketing budgets are directed to online media. Why such a disconnect?

Lane: I'm not sure why anyone would want to connect media consumption with advertising expenditures. Money goes where you see results. I get the sense that people in online advertising have this sense of entitlement. Just because one independent event (online media consumption) is increasing doesn't necessarily mean advertisers should immediately shift their spending habits.

I do believe there are people in the online industry who will look at this study and say 'Hey! We're not getting our fair share.' Media consumption and advertising spending don't necessarily go hand-in-hand. Look at radio. Radio has more ear-balls than TV has eyeballs, but it doesn't get more money. The consumption is not the driving part of the equation. What does the advertising deliver towards marketer's results? If in fact the industry feels spending should be level with media consumption, I think it has to prove why and I think there are some obvious challenges that need to be resolved-everything from the definition of an impression to how the industry can help advertisers understand brand impact.