E-Loan Tweaks Its Media To Get Its Message Across.

For the past few years E-Loan Inc. has been engaged in some high-profile consumer advocacy campaigns on the issue of privacy.

But the company says those efforts have not resonated well enough with consumers, so it is putting together a multimedia image-oriented campaign set to kick off in early April. One goal is to promote practices that E-Loan believes are more pro-consumer than those of its rivals.

At the same time, E-Loan is cutting prices on some home equity lines to prime borrowers to gain share in that popular market.

On Jan. 5 the Pleasanton, Calif., company announced the hiring of a new advertising firm, Merkley & Partners of New York, whose clients include Jet Blue, Mercedes-Benz, and Pfizer. The same day it announced it had hired a media consultant, Hill, Holliday, a Boston unit of Interpublic Group of Cos. Inc.

Chris Larsen, E-Loan's chairman (and until very recently its chief executive as well), said in an interview last week that the company has "always had an incredibly strong core culture of being radically pro-consumer ... but people don't quite get that from the ads. I don't think we've ever nailed the messaging."

E-Loan plans to spend $58 million on the campaign, which will use television, radio, the Internet, and billboards.

Mark Lefanowicz, to whom Mr. Larsen handed the CEO reins on Feb. 17, said one practice the campaign will highlight is that E-Loan does not compensate its salespeople according to the interest rate they charge consumers for home, auto, and other loans.

Mr. Larsen said Progressive Casualty Insurance Co. and Charles Schwab & Co. Inc. have done a good job of calling attention to their efforts to protect consumer rights.

Mr. Lefanowicz said one way E-Loan will try to do that is by buying longer television spots (currently 15 seconds) and using the Internet and satellite radio extensively.

It plans to spend $3.7 million on search-word advertising this quarter alone, he said. This type of advertising has been effective for E-Loan, he said.

The company has also partnered with auto research Web sites. Mr. Lefanowicz said 75% of car shoppers use the Internet in their search.

"If you're around when they're doing that, you have a chance to give them a loan," he said.

In December, E-Loan became the primary provider of auto loans for Edmunds.com and began offering car loans through eBay Inc.

E-Loan says eBay Motors is the top automotive Web site by annual gross merchandise volume.

Last week E-Loan lowered rates on home equity lines of credit for the most creditworthy borrowers -- starting at the 740 to 760 FICO score range -- to prime minus 62.5 basis points. He said the old rate was prime minus 50 basis points and that the company is considering lowering its rate to prime minus 75 basis points on loans with higher balances.

Mr. Larsen, who freed himself from day-to-day responsibilities by making Mr. Lefanowicz his CEO, said, "Every lender has gotten so cynical. Their attitude is " 'Bring them in, and we'll screw you any way we can,' " he said.

"There are a lot of people that are completely being ripped off."

Mr. Lefanowicz said that thanks to the new consumer advocacy campaign and the revamping of its capital markets operations last year, E-Loan still has plenty of room to grow.

Its fourth-quarter net income soared 81%, to $1.04 million, or 2 cents a share, from a year earlier. Analysts had been expecting another break-even quarter.

Copyright 2005 Thomson Media Inc. All Rights Reserved. http://www.thomsonmedia.com http://www.americanbanker.com