There are two things that drive brokerage companies: new accounts and trading activity. E*Trade (NYSE:ET) recently announced a couple of initiatives aimed at growing the number of accounts.

One of the plans involves a new advertising campaign aimed at increasing the value of the online trading platform's brand equity. The slogan is "Challenge the Ordinary... Be E*traordinary." (You know, I get the feeling that if I submitted that myself, I'd be immediately rejected and made fun of, but because some slick ad person created it, then it's OK.) The company wants to link the concept of using E*Trade with being an investor of above-average intelligence. Television spots will include cultural luminaries such as Arthur Ashe, Bob Dylan, and Stephen Hawking (I'd love to believe that, right now, Mr. Hawking is putting a bid in for a stock: There's just something so cool about imagining that the great physicist is taking time out from black holes and space-time calculus to perform such an act).

The other scheme has to do with launching a fresh management system for individual investors, called E*Trade Complete. You can read all the details in the release, but basically it is a polished way of managing funds in different accounts via faster transfer methods, enhanced information presentation, and some usual suspects like debit cards and ATM privileges.

It's good that E*Trade is undergoing this branding campaign and product launch; as we all know, it's all about the brand and value-added services. With brokerages, though, the services can at times carry more weight due to the industry's utilitarian nature (put another way, this isn't PepsiCo marketing sugar water). A friend of mine is going through the process of selecting his first online broker, and although a big concern for him is the commission schedule, or frictional costs, in relation to the management tools, he is very focused on expenses -- notice I said nothing about brand. The higher the frictional costs, the higher the level of service offerings and handholding; each individual investor has a different set of handholding needs, and in my opinion, many are looking for a comfortable balance between things such as check-writing privileges and commission price. This puts companies like E*Trade, Schwab (NYSE:SCH), and Ameritrade (NASDAQ:AMTD) in a bind because they have to deal with the "I-want-it-all" mentality. Hey, I admit, I've got that too.

In my opinion, brokerages should aggressively focus on lowering the cost of "normal trading" (as opposed to providing lower commissions as a reward for trading 50 times a day), even at the expense of cutting back on services. Call it a gut feeling, but I think as time goes on, most individuals are going to become increasingly wary of frictional costs and their effect on returns. Obviously, free commissions don't work, and just as obviously, substantially lower commissions can affect a company's outlook. But going by my friend's comments, and considering that brokerages must collect as many new accounts as possible so that the next bullish upswing will serve the businesses well (something I've stated in a related article), I believe that it comes down to the cost of the trade, and not necessarily branding initiatives alone.

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Fool contributor Steven Mallas owns none of the companies mentioned.