Michael Katchen, Wealthsimple’s chief executive officer, is hoping to grow the company’s client base by splashing his brand to half of the country during Super Bowl L.Mark Blinch/The Globe and Mail
Online portfolio manager Wealthsimple is kicking off a new marketing campaign during this weekend's Super Bowl broadcast.
Since launching in 2014, the investment startup is now one of Canada's largest online investment managers with $400-million in assets under management (AUM) and 10,000 clients. Michael Katchen, Wealthsimple's chief executive officer, is hoping to grow those numbers by splashing his brand to half of the country this Sunday.
"It's the biggest opportunity to create broad awareness," Mr. Katchen says. "People actually tune into the game to watch the ads – a culture that doesn't exist with any other television event or programming."
Commonly referred to as robo-advisers, these Canadian players still have a long way to go to catch up to their U.S. counterparts – which, taken together, manage $21-billion (U.S.) in AUM, according to a July, 2015, report from research firm Corporate Insight. Growing assets is a daunting task for these robo-advisers as more competitors enter the industry, including Bank of Montreal last month.
In addition, the uptake of financial technology services among Canadians is lagging compared to other countries, with only 8.2 per cent of digitally active consumers using at least two fintech products within the past six months compared with 15.5 per cent globally, according to the Ernst & Young LLP's recently released FinTech Adoption Index.
The biggest reason cited behind the low adoption rate is Canadians not knowing what products and services are available. To gain market share, Canadian robo-advisers need to be spending big marketing dollars in order to draw the crowds and turn a profit.
For Mr. Katchen, the Super Bowl ad was a steal. In the United States, a 30-second ad campaign costs $5-million. That price tag drops to $170,000 (Canadian) for the Canadian networks.
CTV TV ratings numbers indicate that 55 per cent of all Canadians (19.3 million of 35.1 million) watched at least part of the Super Bowl telecast last year.
By comparison, 51 per cent of all Americans (161.3 million of 316.1 million) watched the game on NBC, according to statistics released by the NFL.
"A month ago, if you'd told me that we'd be advertising during the Super Bowl, I'd have said you were crazy," Mr. Katchen says. "Super Bowl ads are insanely expensive. If you know one thing about them, that's what you know. They're flashy, overpriced, and all about bragging rights – but not in Canada."
In Canada a $170,000 ad will have a cost, measured in cost per thousand viewers, of $18.48 – 58 per cent less than the United States, Mr. Katchen says.
"We get 2.4 times as many viewers in Canada for every dollar spent," he says. "That's literally more than twice the bang for your buck."
Reaching a mass audience is a strategy that online portfolio manager Nest Wealth started implementing last fall when it partnered with Metroland Media Group Ltd. – a subsidiary of Torstar Corp. that publishes more than 100 weekly newspapers in Ontario.
Nest Wealth received a $1.5-million cash investment from Metroland – as well as an undisclosed amount of advertising and marketing support. In return, Metroland became a minority shareholder in Nest Wealth (the exact percentage is undisclosed).
"We believe that you can't build a great and trusted financial brand for millions of Canadians today and ignore traditional media," says Randy Cass, CEO of Nest Wealth. "There is a sense of credibility and permanence that still comes from a full-page newspaper ad that doesn't come from even the best digital ad."
In an attempt to raise awareness of lower-cost options for investors, Vancouver-based WealthBar turned to a recent investment survey when building its most recent marketing campaign.
The online portfolio manager set up a free coffee station in downtown Vancouver to highlight the cost of mutual-fund fees. According to a financial security survey by Statistics Canada, the average Canadian mutual fund investor pays the equivalent of three cups of coffee a day in fees. (Based on 2.2 per cent average balanced mutual fund MER and a $1.57 medium Tim Hortons coffee.)
The company handed out the statistic on branded coffee cups and plans to use a similar marketing strategy across Canada.
For Mr. Katchen, his smart marketing move will be a one time deal as the Canadian Radio-television and Telecommunications Commission announced next year "simultaneous substitution" (replacing U.S. spots with Canadian ads) will no longer be allowed during the Super Bowl. Therefore, Canadian viewers will see the same ads as American viewers – and which effectively means the price tag for Canadian companies to advertise will no longer be seen as a bargain at U.S. rates.
Clare O’Hara