NFL sponsorship doesn't stretch TD Ameritrade's budget: CEO
NEW YORK (Reuters) - TD Ameritrade Holding Corp's decision to become a National Football League sponsor increases its marketing effectiveness without constraining its budget, the top executive of the discount brokerage firm said Monday.
TD Ameritrade has prominently displayed the NFL shield on its website and other corporate identifications since announcing last week that it had become one of the league's 26 sponsors.
"It's the biggest sports franchise worldwide by far," TD Ameritrade President and Chief Executive Fred Tomczyk said, "(and) it wasn't as expensive as we thought it would be."
The Omaha-based firm, which also is a sponsor of the U.S. Olympic team, would not disclose the cost but Tomczyk said at a Barclays PLC conference that using the NFL's reflected glory will not increase its marketing budget or advertising spend.
TD Ameritrade is "finalizing our media buy" and other aspects of sponsorship activation, a spokeswoman said. The sponsorship extends through the 2016 football season.
In its 2013 fiscal year, which ended on Sept. 30, the firm spent $238 million on advertising and earned $675 million in profit.
An NFL sponsorship costs on average about $15 million annually and usually includes ancillary commitments such as buying advertising time, said Jim Andrews, senior vice president at IEG, a corporate sponsorship consultant. A retail brokerage firm would probably spend much less than the $40 million-plus commitments of larger consumer-oriented NFL sponsors such as Microsoft Corp, Nike Inc and Verizon Communications, he said.
Nationwide Insurance is the only other new retail financial service firm to sign up this year with the NFL.
In other comments to investors, TD Ameritrade clients markedly reduced their trading during the traditionally slow summer months, particularly at the end of August, Tomczyk said. TD Ameritrade, which is more dependent on active do-it-yourself traders than competitors such as Charles Schwab Corp and E*Trade Financial Corp, expects to report its August trading volume on Wednesday. Continued...