Nobody Listening To Online Brokers?

A new research report from Zona Research might make online brokerage officials wonder what, exactly, they're getting in return for their outsized marketing budgets.

The report reveals that 54 percent of the respondents surveyed couldn't name an online brokerage firm, despite the advertising now adorning bus stations, billboards and newspaper pages. The highest awareness of any particular firm was only 8 percent.

Online advertising may be a particularly effective way for Internet brokers to find new customers. One-third of respondents said that they found online brokerages using search engine results or by clicking through an online advertisement.

Marketing and advertising budgets at online brokerage firms have swollen as those companies have competed for the estimated 10 million individuals who use the Internet to make financial decisions but do not currently trade online. E*Trade is expected to continue to spend $85 million to $90 million per quarter on marketing and advertising, and Ameritrade has announced it will spend upward of $200 million on marketing and advertising next year.

The Zona report also offers up some unique demographic information about online traders. Fully 75 percent are males between the ages of 25 and 54. Nine percent of online traders are either unemployed or retired. Nearly one-quarter of online traders, 24 percent, make less than $35,000 per year, while 16 percent of online traders earn more than $100,000 annually.