ING Direct, the online bank best known for the orange ball tossed around in its commercials, has gained a profitable foothold in the US by wooing customers fed up with the minuscule interest rates offered by most banks.
Next week, ING Direct will introduce a US$50 million fine-tuning of that approach from Bartle Bogle Hegarty, as it attempts to convince skittish stock market investors that its savings accounts would also make a fine investment option.
PHOTO: NY TIMES
ING Direct, a subsidiary of the Dutch financial services company ING, wants to add 500,000 new customers this year, to go with the the 1 million it has acquired since entering the US market in September 2000.
But the online bank's inroads into the US market could run into some obstacles. If the stock market's fortunes rise, or the traditional banks increase their interest rates, ING Direct's key selling point could lose some of its attraction.
ING Direct executives do not seem too worried. The online bank's products have become increasingly attractive as investors bail out of the declining stock market only to be underwhelmed by the interest rates banks are paying on savings accounts or money-market funds.
"Its financial instruments are as safe as a bank and safer than the stock market," said Jerry Silva, an analyst with TowerGroup, a Needham, Mass.-based research company that is part of Reuters. "And it gives you flexibility and doesn't lock you in the way a traditional CD would."
As of Jan. 31, ING Direct's annual interest rate on its savings account, the only account it offers, will be 2.3 percent. Currently, the average savings account interest rate is 0.80 percent, while the average money market account pays an interest rate of 0.73 percent, according to Bankrate.
ING Direct has used this spread to become the 95th largest bank in the US in less than three years of operation, according to the latest rankings from American Banker. The bank is already profitable, posting a nine-month net profit of US$21.5 million through Sept. 30, compared to a US$32.5 million net loss in the same period the previous year.
ING Direct has avoided the fate of a number of other Internet banks by keeping its costs and offerings to a minimum. Customers can bank either online or by phone. And ING Direct does not offer checking accounts or impose any fees, service charges or minimum requirements on its products.
To maintain its momentum, ING Direct is tweaking its approach. It dropped its original agency, Howard, Merrell & Partners, of Raleigh, North Carolina, and is boosting its spending by US$15 million from last year and more than doubling the US$22 million it spent in 2001.
David Lewis, ING Direct's chief marketing officer, said the bank's original ads were directed at "value-conscious, savvy, thrifty, well-informed consumers who like finding a good deal."
He said the new ads are aimed at these customers, as well as at individuals who would normally not view a savings account as a good place for their funds.
This group would be more likely to use money-market funds, scoffing at savings accounts as unsophisticated and a poor investment, with a low yield, he said. "The new campaign is meant to expand the category, to show that the account has a great yield and can be looked at as liquid," he said.
The campaign's two TV commercials, which will debut Feb. 3 and 17, combine film and animation, and retain the orange ball. The first spot shows a disheveled man roaming through his home while his animated money dances around the rooms. Fed up with the money's aimless activity, he sits down at his computer and signs up for the company's "orange" savings account.
The second spot depicts money rushing out of a bank vault, through the streets of a city, to a car dealership, where its owner is considering the purchase of a vintage car.
"We wanted the spots to be about people's relationship to money," said Kevin McKeon, executive creative director of the New York office of Bartle Bogle Hegarty, which is 49 percent owned by the Publicis Groupe.
Ian Rubin, research director of Financial Insights, a subsidiary of International Data Corp, a Framingham, Massachusetts-based consulting firm, said: "I think the message is great. They're saying `This can be fun, it doesn't have to be stodgy.' If it gets people thinking about savings accounts and CDs who wouldn't think twice about them, it can drive a lot of people to look at ING as an option."
The domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Singapore-based ride-hailing and delivery giant Grab Holdings Ltd has applied for regulatory approval to acquire the Taiwan operations of Germany-based Delivery Hero SE's Foodpanda in a deal valued at about US$600 million. Grab submitted the filing to the Fair Trade Commission on Friday last week, with the transaction subject to regulatory review and approval, the company said in a statement yesterday. Its independent governance structure would help foster a healthy and competitive market in Taiwan if the deal is approved, Grab said. Grab, which is listed on the NASDAQ, said in the filing that US-based Uber Technologies Inc holds about 13 percent of
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday received government approval to deploy its advanced 3-nanometer (3nm) process at its second fab currently under construction in Japan, the Ministry of Economic Affairs said in a news release. The ministry green-lit the plan for the facility in Kumamoto, which is scheduled to start installing equipment and come online in 2028 with a monthly production capacity of 15,000 12-inch wafers, the ministry said. The Department of Investment Review in June 2024 authorized a US$5.26 billion investment for the facility, slated to manufacture 6- to 12nm chips, significantly less advanced than 3nm process. At a meeting with
Taiwan’s food delivery market could undergo a major shift if Singapore-based Grab Holdings Ltd completes its planned acquisition of Delivery Hero SE’s Foodpanda business in Taiwan, industry experts said. Grab on Monday last week announced it would acquire Foodpanda’s Taiwan operations for US$600 million. The deal is expected to be finalized in the second half of this year, with Grab aiming to complete user migration to its platform by the first half of next year. A duopoly between Uber Eats and Foodpanda dominates Taiwan’s delivery market, a structure that has remained intact since the Fair Trade Commission (FTC) blocked Uber Technologies Inc’s
RSS