emarketer after the crunch-how credit card issuers market to consumers online

7/31/2019 eMarketer After the Crunch-How Credit Card Issuers Market to Consumers Online

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Digital Intelligence Copyright 2011 eMarketer, Inc. All rights reserved

January2011

Executive Summary: Asthedustothefnancialcrisiscontinuestosettle,still-cautiousconsumersare

spendinglessandplacinghigherpriorityonpayingodebt.Asaresult,creditcardissuersarescrambling

ornewwaystopromotecardproducts,expandtheircustomerbaseandengagewithconsumers

throughonlinechannels.

118386

Emailcampaigns,searchanddisplayadvertising,and

customer-ocusedwebsitescontinuetobethemosteective

onlinemarketingtacticsusedbycardissuerstoattract

andinteractwiththeircustomers.Manyissuersareurther

broadeningtheironlinemarketingchannelstoincludesocial

mediainitiativesbyestablishingapresenceonFacebookand

Twitteraswellasonvideoandshoppingsites.

TheCreditCardAccountability,ResponsibilityandDisclosure

(CARD)Acthashadaprooundimpactontheindustrysoperations

Ithasredefnedthewaycreditcardissuerscanchargeconsumers

andhasorcedthesecompaniestodevelopnewproductsandrethinkhowtheymarkettoconsumers.Theseincludeincreasing

ocusoncreditworthyconsumersegmentsandoeringmore

onlinefnancialmanagementandeducationtools.

Rewardshavebecomeacriticaltoolorcreditcardissuersto

buildandmaintaindeep,sustainablecustomerrelationships.

Nearlysixin10consumersconsiderrewardsadecisiveactor

inchoosingaparticularcardproduct.Programsthatoercash

backandrewardspointsandhaveavastarrayoredemption

optionsarethemostpopularwithtodaysvalue-consciousset.

Key Questions

Howarecreditcardissuersusingonlinemarketingtoattract

andretaincustomers?

HowhastheCARDActaectedonlinemarketinginthecredit

cardindustry?

Whatonlineeaturesdoconsumerswantortheircreditcards?

Howarecreditcardcompaniesusingsocialmediaand

ecommercetoengagewithcustomers?

% of US internet users*

Reasons for Obtaining a Credit Card Through aSpecific Company, March 2010

The rewards program

53%

58%

46%

Good interest rate

10%

23%

24%

Friend/family recommendation10%

23%

3%

Good product/service reviews

8%

12%

4%

Balance transfer option

6%

15%

6%

Offered the right amount of credit

3%8%

16%

Definitely Pretty sure No

Note: *who recently opened a new credit card accountSource: Epsilon, "Recharging Credit Card Marketing to Meet EvolvingConsumer Expectations," July 20, 2010

118386 www.eMarketer.com

Elisa Tavilla

[email protected]

Report ContributorsLauren McKay, Stephanie Spady

Ater the Crunch:

How Credit Card Issuers Market toConsumers Online


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Ater the Crunch Copyright 2011 eMarketer, Inc. All rights reserved. 2

The eMarketer View

Credit card issuers are increasing budgets or

online and ofine marketing. Traditionaloinemedia

channels(suchasdirectmail)andonlinevenues(such

asemailcommunications,onlineadvertisingandwebsite

unctionality)continuetobecreditcardmarketerstacticso

choice.Issuerssentmoredirectmailcreditcardoersin2010

thanin2009.Theyarealsoinvestingmoreinneweronline

channels,includingsocialmediaandmobileapps,toincrease

interactionandstrengthenrelationshipswiththeircustomers.

The CARD Act has wrought changes in how card

issuers do business, but has had less impact on

marketing initiatives. Thelegislationrequiresgreater

disclosureotermsandconditions,prohibitsincreasesininterest

ratesdeemedunairandeesconsideredexcessive,andrequires

changesinapplicationandtimingopayments.Whilethenew

regulatoryenvironmenthasinuencedthecardindustrysbusiness

structureandrevenuestrategy,ithasnothadassignifcant

aneectonmarketing.Manycardissuershaveincorporated

legislationrequirementsintonewproductsandmarketedthemas

valuablecardholderbenefts.Theyalsocontinuetooercardswith

introductoryratesandnoannualees.

Online, consumers preer websites and email

or credit card product and account inormation.

Consumersusecardissuerswebsitesasatopresourceto

researchproductsandasaavoredchanneltoapplyornew

accounts.Theypreertoreceiveinormationabouttheircredit

cardsthroughemailandrespondtorelevant,personalized,

targetedandcustomizedmessagesromtheirissuers.

Rewards are a critical marketing tool or credit

card issuers. Alargepercentageoconsumersconsiderrewardsadeterminingactorinchoosingacreditcard.

Thevarietyorewardsoptions,easeogettingcashback,

andaccumulationandredemptionopointsandmilesare

mostimportanttocardholders.Asaresult,cardissuersare

dierentiatingtheirprogramsbyoeringmoregenerous

optionsandawiderarrayorewardscategoriesthrough

enhancedonlinechannels.

Credit card issuers can signicantly boost

engagement with consumers through social media.

Thoughonlyasmallsegmentocardholdersareconnectedto

creditcardissuersviasocialmedia,itsimportanceisgrowing.

Creditcardissuersareincreasinglyusingsocialnetworks,

videosites,onlinecommunitiesandblogstointeractwith

consumers.Inadditiontoprovidinginormationabout

products,promotionaloersandcustomerservice,issuers

leveragesocialmediatopromotebrands,stimulatebuzzand

gaininsightabouttheirbrandandproductsinacandid,real-

time,interactiveenvironment.

Credit card issuers can drive more card usage

through ecommerce.Creditcardissuersarebroadening

theirmarketpresencetoincludeonlineshoppingsites.

Theyareexperimentingwithwaystoincreasespendingby

enhancingtheonlineshoppingexperiencewithpromotions,

discounts,couponsandsocialshopping.Severalissuershave

launchedsitesandmobileappsthatdynamicallycombine

socialnetworking,socialshoppingandsocialgaming.


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Industry Overview

Credit Card Networks Deconstructed

American Express, Discover, MasterCard and Visa are

the our major payment card networks in the US. While

American Express and Discover both market and issue

their products directly to consumers, MasterCard and

Visa issue branded payment products through a network

o banks, credit unions and other fnancial institutionsworldwide. MasterCard and Visa typically ocus marketing

eorts at the brand level, while frms that issue

MasterCard and Visa products market to consumers.

From2005through2009,fnancialandregulatorypressures

causedmanyfnancialinstitutionstoslashtheirmarketing

budgets.Overalladspending(excludingdirectmail)oncredit

cardspeakedin2005at$2.17billionbutellto$1.40billion

in2009,accordingtoKantarMedia.Duringthesameperiod,

creditcardissuersalsoreducedmailingsandconsumers

receivedeweroersintheirmailboxes.

billions and % changeCredit Card Category Advertising Spending, 2005-2009

2005

$2.17

2006

$2.08(-4.1%)

2007

$1.80(-13.7%)

2008

$1.69(-5.9%)

2009

$1.40(-17.2%)

Note: consumer cards only; excludes direct mailSource: Kantar Media, "How Has Reform Legislation Affected Credit CardAdvertising?" June 14, 2010

121162 www.eMarketer.com121162

Astheeconomyhasbeguntoimprove,banksareonceagain

usingdirectmailandonlinemarketingchannelstoexpandtheir

customerbaseandpromotetheircardsasthetop-o-wallet

choice.Amongthesevenleadingfnancialmarketersthataccount

ormorethan85%ocreditcardadvertisingexpenditures,our

increasedtheiradbudgetsromQ42009toQ12010overthe

sameperiodayearbeore,accordingtotheJune2010Kantar

report.AmericanExpressandissuerJPMorganChasemorethan

tripledtheiradbudgets,whileVisaandissuerBankoAmericaonly

slightlyincreasedtheirspending.

millions & % change

Credit Card Advertising Spending, by Advertiser, Q42008-Q1 2009 & Q4 2009-Q1 2010

Q4 2008-Q1 2009

Q4 2009-Q1 2010

%change

American Express $109.9 $335.1 204.9%

JPMorgan Chase $48.9 $164.2 235.7%

Visa USA $116.0 $130.5 12.5%

MasterCard $115.5 $73.2 -36.6%

Capital One Financial $92.7 $43.0 -53.6%

Bank of America $27.3 $36.6 34.0%

Citigroup $65.3 $12.0 -81.6%

Note: consumer cards only; excludes direct mailSource: Kantar Media, "How Has Reform Legislation Affected Credit CardAdvertising?" June 14, 2010


AccordingtoMintelComperemedia,approximately1.2billion

oersornewcreditcardswerereceivedbyconsumersin

Q32010,comparedwithonly391millioninQ32009.Asimilar

August2010studybySynovateMailMonitoroundthatUS

householdsreceivedabout2.25billioncreditcardoersby

theendo2010,a62%increaseoverthe1.39billionin2009.

IssuersChase,CitibankandDiscoverweretheleadingmailers

in2010.

We have increased our investment in onlinemarketing, but we have also then sought toincrease our exposure across multiple mediachannels, both online and ofine.Larisa Drake, VP of brand communications, Discover

Financial Services, in an interview with eMarketer,

November 2010
http://totalaccess.emarketer.com/Interview.aspx?R=6000435http://totalaccess.emarketer.com/Interview.aspx?R=6000435http://totalaccess.emarketer.com/Interview.aspx?R=6000435


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Credit Card Accountability,Responsibility and Disclosure(CARD) Act

ApprovedbyCongressin2009,theCARDAct

wentintoeectinFebruary2010.Thelawlimits

whenissuersoconsumercreditcardscanraise

interestrates,prohibitscertainees,andbansbillingandpaymentpracticesthattheFederal

Reservedeemsunairanddeceptive.

WhentheCARDActinitiallypassed,therewasanticipation

thatitsrequirementswouldhaveasignifcantnegativeeect

onthewaycreditcardissuersstructureandmarkettheir

products.Forexample,manyindustrywatchersearedthat

annualeeswouldresurace,lowteaserrateswoulddisappear

andrewardprogramswouldbecomelessgenerous.

Despitethesespeculations,noneotheseearly-stage

scenarioscametobear.Inact,MintelComperemediaoundthattheproportionocardoerswithannualeesactually

declined.InQ22010,only28%ooersornewcardscarried

anannualee,downrom33%ayearearlier.Further,themean

annualeeacrossallcardsellrom$93in2009to$68inQ1

2010,accordingtoSynovateMailMonitor.

Themajorityocardissuerscontinuetooeranintroductory

APR(typically0%)orbalancetransersandpurchases.InQ2

2010,56%omailoerspromotedteaserrates,uprom37%

inQ22009,Mintelound.Rewardsoptionshavealsoremained

plentiulandinsomecasesareevenmoregenerousas

issuerscompetetoattractandretainthemostvaluablecustomerswiththebestcreditprofles.

TheCARDActalsomandatedthatmonthlybillingstatements

providegreaterdisclosureofnancechargesandclearly

demonstratecostscenariosandsavingsrompayingobalances

atdierentrates.Someissuershavebeenabletocreatively

incorporatetheseregulationsintonewproductoerings

andmarketingcampaignsthathighlighttheadvantagesor

consumers.Forexample,ChaseintroducedBlueprint,anonline

toolthathelpscardholdersdevelopanindividualizedplanor

payingdownbalancesovertime.Theoeringisbeingpositioned

tohelpconsumerstakecontrolotheirfnancesandreducethe

totalinteresttheypayonrevolvingbalances.

Issuersarealsolaunchingproducts,bothonlineandoine,

thattargetthemostcreditworthyconsumers,asegmentthat

ismoreattractiveandproftabletoissuersunderthenew

legislation.ChasesSapphire,orinstance,isapersonalcredit

cardtargetedtoauentconsumers.Similarly,CapitalOneis

ocusingonthehigher-spendingcustomersegmentwithits

VentureandVentureorBusinesstravelrewardscards.

Email, Online Ads and Issuer Websites

Thoughtraditionalmediaandpostalmailare

stillthetopconsumersourcesorcreditcard

inormation,onlinemarketingchannelsare

becomingincreasinglyimportantorcreditcard

issuers.Theyareusingemail,onlineadsand

issuerwebsitestomarketproducts,promote

brands,strengthencustomerrelationships

anddrivecardusage.Morethan40%oUS

consumerssaidtheyrecalledcreditcard

productspresentedonlineviadisplayadvertising

oremail,accordingtoa2010ICOMstudy.

% of respondents

Advertising Sources from Which US Consumers RecallCredit Card Products, 2010

Note: numbers may not add up to 100% due to roundingSource: ICOM, "Finding the Right Channel Combination: What DrivesChannel Choice," Aug 24, 2010


Display ads19%

Email (brand)22%

Postal mail27%

TV ads33%

120320


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AMarch2010surveyconductedbyEpsilonoundthatemailis

USconsumerspreerredchannelorreceivinginormationabout

creditcards(66%orespondents),ollowedbypostalmail(40%)

andcompanywebsites(20%).Issuersuseemailtocommunicate

withcustomersabouttheiraccountsaswellastoalertthem

aboutnewoersandpromotions.Themostsuccessulmessages

aretargeted,withrelevantinormationinwhichcardholderssee

valueandpurpose,accordingtoEpsilon.

% of US internet users*

Preferred Channel for Receiving Credit CardInformation, March 2010

Email 66%

Postal mail 40%

Company website 20%

Product review website10%

Facebook6%

Mobile phone4%

SMS/text message1%

Note: *who recently opened a new credit card accountSource: Epsilon, "Recharging Credit Card Marketing to Meet EvolvingConsumer Expectations," July 20, 2010


We use email pretty aggressively becauseresults have shown our cardmembers liketo be communicated with via email.Larisa Drake, VP of brand communications, Discover

Financial Services, in an interview with eMarketer,

November 2010

Cardissuerscontinuetousetargetedonlinedisplayadvertisingtopromotecarduse.Discover,orexample,

oered5%cashbacktoitscardmembersorpurchasesat

restaurants,departmentstoresandclothingstoresduring

the2010holidayseason.Muchothecompanysdisplay

advertisingisocusedonencouragingcustomerstousetheir

Discovercardinrelevantplaces.

Searchenginesandissuerwebsitesarealsopreerred

destinationsorconsumersresearchingandapplyingorcredit

cards.Astudyby41pound.orgoundthatGooglesearches

orcreditcardstotaledabout1.5millionpermonth.Themost

recentCompetedata,romaDecember2009studyocredit

cardconsumertrends,indicatedthat42%oconsumersused

issuerwebsitestoresearchcardproductsand26%usedsearch

engines.Moreover,thestudyoundthat36%oconsumers

usedcreditcardissuerswebsitesand29%usedanafliated

companyssitetoapplyoranewcard.Though2010datahas

notyetbeenreleased,cardissuersincreasedinvestmentin

onlinechannelssuggeststhatwebsiteunctionalityandsearch

anddisplayadvertisingcontinuetobeimportantmarketing

tools,andhavenotbeenaectedbytheCARDAct.Company

websites,searchenginesandproductcomparisonwebsites,

suchasGoogleCreditCardComparisonAds(frsttestedin

November2010),remainkeyresourcesorcreditcardshoppers

andapplicants.

% of respondents

Resources Used During the Credit Card ShoppingProcess According to US Internet Users*, Dec 2009

Credit card company website

42%

Search engines

26%

Local bank branch

26%

Recommendations from family/friends

25%

Product comparison websites

22%

Direct mail

19%

Third-party reviews/consumer finance websites

12%

Phone with credit card company rep

12%

Mail with credit card company rep

10%

Online message boards/blogs

9%

Online newspapers/magazines

8%

Online consumer-generated reviews

8%

Hard copies of newspapers/magazines5%

Note: n=312; *prospective credit card customersSource: Compete, "Credit Card Consumer Trends," provided to eMarketer,April 1, 2010

http://totalaccess.emarketer.com/Interview.aspx?R=6000435http://totalaccess.emarketer.com/Interview.aspx?R=6000435http://totalaccess.emarketer.com/Interview.aspx?R=6000435http://totalaccess.emarketer.com/Interview.aspx?R=6000435


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Rewards

Rewardshavebecomeakeypointo

dierentiationinattractingthemostvaluable

customers,especiallythosewiththebestcredit

profles.Rewardsprogramscontinuetobethe

normorthecardindustry,accountingoreight

outo10oersin2010,upromonlysixin10in

2008,accordingtoMintelComperemedia.

ASeptember2010MintelOxygenreportaboutloyalty

marketingoundthat24%oconsumersactivelycompared

creditcardoersinordertoevaluaterewardsprograms,and

10%haveswitchedtoadierentprimarycreditcardinthe

pastbecauseoabetterrewardsprogram.

Thiscomparison-shoppingbehaviorhasintensifedasaresult

otheeconomiccrisis.Thoughcardholderswhoareless

inclinedtocarryrevolvingbalancestendtoseemorevaluein

rewardsprogramsthaninlowerinterestrates,value-conscious

consumersaredemandingmorecashback,morerewardpoints

andgreaterdiscountsortheirpatronage.

AndrewLight,directorotheInterContinentalHotelsGroup

partnershipatChaseCardServices,toldeMarketerthat

consumersviewrewardsasadditionalvalueorsomething

theywerealreadyplanningtodo.Itsmoneyyouregoingto

spendanyway,hesaid,andIthink,particularlyatthistime,

allconsumersarelookingorwaystomaximizevalue.

AstudybytheFederalReserveBankoChicagopublishedin

December2010oundthatcreditcardsoeringrewards,cash

backrewardsinparticular,enticeconsumerstoincreaseoverall

spendinganddebt.Forexample,ChicagoFedeconomistsound

thata1%cashbackrewardsprogram,whichyieldedanaverage

rewardo$25permonth,increasedmonthlyspendingby$68

andcreditcarddebtby$115.Whatsmore,thestudyrevealed

thatrewardsotendrivecardusageamongconsumerswith

otherwiseunderusedordormantaccounts.

Cashbackoersaccountedor41%oallrewardsoersinQ3

2010,comparedwith28%inQ32009,MintelComperemedia

ound.Inadditiontoprovidingcash,issuersalsorecognize

changesinconsumerspendingandarecreatingrewards

programsthatoermoregenerousreturnsoneverydayitems.Inastudyodirectmail,Minteloundthat45%ocreditcard

oersin2010mentionedthewordgroceriessomewherein

themailingtext,uprom20%in2008.

Mintelindicatedthatthequalityoarewardsprogramisoten

thedeterminingactorwhenconsumerschooseacredit

card.Theabilitytoinstantlyoreasilyredeempointsandbeing

oeredalargenumberoredemptionoptionswerecitedas

themostimportanteatures.

Interestingly,speedoredemptionotentrumpsredemptionvalue.

Givenachoice,44%oconsumerssaidtheypreerlower-value

rewardsthatcanberedeemedquickly(orexample,cashback,

rebatesappliedtomonthlybalancesorgitcards),accordingtoa

studyreleasedinJune2010bySynergisticsResearch.Another16%

optedtoaccumulatepointstowardhigh-valueorbig-ticketitems

(suchasairlinetravel).

Enhancing Rewards Programs Online

A number o large credit card issuers that recognize the

heightened importance o rewards are oering their

customers greater exibility and broader options in

online reward redemption, and additional opportunities

to earn bonus points and discounts.

Chase has added an auction capability to its Ultimate

Rewards website to attract customers interested in

redeeming rewards at lower point thresholds. Chase

cardholders can bid on unique and exclusive events with

points or, in some cases, pay with their Chase card. In

addition, Ultimate Rewards eatures seasonal promotions

rom the programs merchant partners, which include

AMC Theatres, Best Buy, Target and others. Chase also

launched a public version o its Ultimate Rewards site,

which allows non-cardholders to explore current oers,

redemption point levels and partners.

Discovers rewards microsite, ItPaysToDiscover.com,

oers cardmembers access to all redemption options

in one place, including Cashback Bonus, git cards,

merchandise, charity donations, direct deposit and

statement credits.

American Express recently announced partnerships

with Amazon.com and social gaming company Zynga.

The deal with Amazon enables cardmembers to make

purchases on Amazon.com by linking their Membership

Rewards and Amazon accounts. Similarly, American

Express cardmembers can redeem Membership

Rewards points or virtual goods in Zyngas social

games, such as FarmVille and CityVille.

Citibank announced it is adding Zynga virtual git cards

to its Citi ThankYou Rewards program. Customers can

also redeem their points or other virtual rewards,

including digital music downloads, restaurant

certifcates, airline tickets, merchandise, cash rewards

and statement credits. Citibank customers can combine

points rom credit card purchases with points rom

eligible checking accounts and other banking activities.


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Social Media

Creditcardissuersareincreasinglyusing

socialmediatopromotetheirbrands,develop

andmarketnewproducts,andconnectwith

customers.Whileonlyasmallnumbero

consumersareconnectedtotheirfnancial

institutionsonsocialnetworks,thenumber

isgrowing.Cardissuersshouldnotoverlook

thepotentialosocialmediaasavaluableand

powerulmarketingchannel.

AmericanExpress,Discover,MasterCard,Visaandtheir

issuersuseavarietyosocialmediatopromoteproducts,

stimulateword-o-mouthconversationsandassesspublic

opinionotheirbrandsandproducts.Mostothelargest

playersintheindustryareattemptingtoengageconsumers

throughFacebook,Twitter,Myspace,YouTube,blogsandonlinecommunities.CustomerexperienceanalyticsfrmSerendios

November2010BankInsightconsumerbankingstudyound

thatcreditcardswereamongthemostpopulartopicsor

customersinvolvedinonlineconversationsaboutbanking

productsandservices.

% of mentions

Top 10 US Banking Products/Services Mentionedin Online Conversations, Q3 2010

1. Credit card 17.4%

2. Customer care 14.7%

3. Mortgage 13.4%

4. Fees and charges 12.3%

5. Bank employees 10.0%

6. Loan 9.8%

7. Overdraft 8.0%

8. Balance 6.0%

9. Online banking 5.4%

10. Debit card3.0%

Note: including social media, blogs and forumsSource: Serendio, "BankInsight for USAQ3, 2010," Nov 10, 2010


122066

Cardissuersarealsoleveragingsocialmediaorloyaltymarketing.

Accordingtoa2010ROIResearchstudy,50%oconsumerswho

hadconnectedwiththeirbankonasocialnetworksitesuchas

FacebookorTwitterdidsobecausetheywereloyalcustomers.

Aboutthreein10connectedwiththeirbankbecauseitmade

themeelvaluedorpartotheorganization.

% of respondents

Reasons that US Social Network Users Decidedto Become a Fan/Follower of a Financial ServicesCompany on Facebook or Twitter, 2010

Loyal customer of the bank/company

50%

Makes me feel like a valued customer

34%

Identify with the bank/company

32%Friends are fans

28%

A friend recommended I become a fan

27%

New product announcements

26%

Sales announcements

26%

Makes me feel connected to others with similar interests

22%

Coupons/discounts

18%

Note: n=101 who made a financial services purchase in the past sixmonths and follow a financial services company on Facebook or TwitterSource: ROI Research, "S-Net (The Impact of Social Media)" sponsored byPerformics, Sep 9, 2010


Creditcardissuershaveusedparticipatorymediatoalert

deal-seekingcustomerstopromotionsatselectretailers,

limited-timeoers,travelticketavailability,andaccessto

entertainmentandsportingeventssuchastheSuperBowl.

AnApril2010comScoreonlinebankingstudyrevealedthat

consumerswerelookingorwaystosaveviaexclusiveonline

shoppingpromotions(22%orespondents)andpromotionsat

selectretailers(also22%)throughsocialmediaengagementwiththeirbank.

% of respondents

Reasons US Internet Users Engage with Their Bankvia Social Media, April 2010

Exclusive online shopping promotions

22%

Exclusive promotions at specific retailers

22%

Online customer service related to your account

18%

Exclusive special promotions for opening new card accounts

14%

Tips for servicing your account online

14%

Credit help or financial advice

13%

Charity donations

10%

Source: comScore, Inc., "The State of Online Banking," May 12, 2010



8/12

After the Crunch Copyright 2011 eMarketer, Inc. All rights reserved. 8

Some credit card companies are using Facebook and, in

particular, Twitter as additional outlets for customer service.

Such initiatives include communicating changes in products

and rates, responding to general customer service inquiries

and introducing new products and offers. A September 2010

Corporate Insight study found that credit card companies top

Twitter account usages included providing commentary (36%),

customer service (25%) and marketing (14%).

% of total

Types of Twitter Accounts Used by US Bankand Credit Card Companies, Sep 2010

Source: Corporate Insight, "To 'Friend' Is the Trend: Social Media andFinancial Services Today," Oct 1, 2010


Multiple use11%

Recruitment7%

Firm/website

info7%

Marketing andpromotion14% Customer service

25%

Commentary36%

123012

Top Card Brands Harness Facebook and Twitter

American Express Facebook page, with more than

311,000 likes, enables current and prospective

cardmembers to engage in discussions with and provide

feedback on posts by the American Express team.

Cardmembers can also nd information about new

offers and products on the page.

The @AskAmex Twitter account offers cardmembers an

additional customer service option. American Express

answers general inquiries via Twitter so its followers can

receive and benet from the tweets. However, customers

must ask specic card-level questions via email or phone,

a policy that holds true for most nancial institutions

because of privacy issues and legal limitations.

Discover is making a similar push on the top social

networks. Larisa Drake, VP of brand communications at

Discover, told eMarketer that the company is exploring

more social media use and is taking a more active role

than in the past to engage with customers and prospects.

Weve got a presence on Facebook and onTwitter where we can communicate with ourcustomers about news, ways they can earnextra Cashback Bonus, our sweepstakes,where they can win prizes, and newinformation about features and benets.Larisa Drake, VP of brand communications, Discover Financial

Services, in an interview with eMarketer, November 2010

Discovers Facebook page, with more than 26,000 likes,

promotes the companys sponsorship of the Orange Bowl

with videos and exclusive ticket offers for cardholders. Its

Facebook wall includes posts about events, photos and fan

comments. Similarly, Discover is using Twitter to alert its

customers to promotional offers and send reminders for

ways to earn additional Cashback dollars.

MasterCard has more than 26,000 Facebook likes and

uses the social network in several ways. Cardholders can

share their priceless moments, participate in PricelessTrivia to win prizes, and nd out about the latest offers

and experiences available through the MasterCard

MarketPlace, the card companys online mall on Facebook.

MasterCard has two Twitter channels: one designed for

consumers and one for corporate users.

Through our consumer-focused MasterCard

News Twitter channel, we provide real-timecommunications about discounts, offersand promotions, and communicate withMasterCard cardholders about the value our

brand can deliver to them.Cheryl Guerin,SVP of global digital marketing, MasterCard Worldwide,

in an interview with eMarketer, December 2010

The company has been tweeting alerts about

overwhelming offers, which are time-sensitive deals

offered daily on MasterCard MarketPlace.

For its part, Visa has a Facebook presence for its Visa

Signature products (with more than 50,500 likes). As a

marketing strategy during the World Cup in South Africa

in 2010, where Visa was a sponsor, the company lauched

Visa Match Planner, a social media application. The app

enabled users to create customizable viewing schedulesto share, organize viewing parties, chat with friends, track

tournament scores and standings, and obtain offers from

merchants. Visa currently does not have a Twitter account.

Many bank issuers are looking for ways to offer a more

personalized and human voice on Twitter, rather than

a generic corporate voice. Citi, for instance, makes sure

members of its social media team have individual Twitter

accountsall with a Citi labelso customers can interact

with a specic representative instead of the less personal

@AskCiti account. Bank of America provides live customer

service via Twitter, but is not using social media to market itscredit and debit cards.

Some card networks are also leveraging online video sites,

such as YouTube, to engage with customers and encourage

card usage. For example, MasterCard has three YouTube

channels, and Visa used YouTube to promote its sponsorship

of the World Cup tournament in South Africa in 2010.
http://totalaccess.emarketer.com/Interview.aspx?R=6000435http://totalaccess.emarketer.com/Interview.aspx?R=6000435http://totalaccess.emarketer.com/Interview.aspx?R=6000435http://totalaccess.emarketer.com/Interview.aspx?R=6000435http://totalaccess.emarketer.com/Interview.aspx?R=6000435


9/12


Online Communities

Onlinecommunitieshelpcreditcardissuersfndtheright

targetaudience,gaininsightintowhatconsumersthink

abouttheirbrands,andoercluesonhowtoimprovetheir

productsandprograms.Otentimesthistakestheormo

crowdsourcing,whenacompanylistenstoitscustomersand

ansornewideasandimprovements.

Aull80%obankingandfnancialinstitutionsusedonline

communitiesandcrowdsourcingtodevelopandlaunchnewproductsandprogramsin2010,uprom63%in2009,

accordingtoaNovember2010reportromComBlu.

% of US branded communities

Branded Community Integration with Social Media,by Industry, 2009 & 2010

2009 2010

Travel/hospitality 0% 100%

Entertainment 67% 90%

Packaged goods 69% 86%

Auto 85% 83%

Gaming 0% 83%

Insurance 0% 83%Banking/financial services 63% 80%

Technology 63% 78%

Retail 53% 78%

Telecommunications 69% 67%

Healthcare/pharmaceuticals 100% 20%

Source: ComBlu, "The State of Online Branded Communities," provided toeMarketer, Nov 9, 2010


Crowdsourcing or New Products

American Express launched its frst youth-targeted ZYNC

card in December 2009, developed using direct customer

input via an online community, ZYNC Tank. American

Express targeted the new card to consumers between

ages 18 and 29, a group that has annual buying power

estimated at $625 billion, according to the card issuer.

On its ZYNC Tank website, cardmembers can provide

eedback and hold discussions with ZYNCs marketing

and product development team. They also have the

opportunity to customize their ZYNC card with bundles

o benefts and rewards, called ZYNC Packs, tailored to

specifc liestyle needs and spending habits. American

Express continues to use ZYNC Tank to identiy

additional passion areas that can shape new rewards.

It recently launched our new ZYNC Pack oerings that

were created based on customer suggestions rom the

online community.

While some cards allow people topersonalize the outside o the card by

choosing a design or adding a picture,ZYNC empowers cardmembers to designwhats inside their card so the benets ttheir liestyle and the things they enjoy

mostwhether its ashion, tness orood.Mary Hines, VP of ZYNC product managementat American Express, in a statement, November 2010

Chase Card Services and InterContinental Hotels

launched the Priority Club Select Visa card, designed

by requent travelers. The two companies partnered

with Communispace to create a private online

community comprising members o InterContinentalHotels Priority Club Rewards loyalty program, who were

also Priority Club Rewards Visa Signature cardholders.

Through the online orum, Chase and InterContinental

Hotels had ongoing, real-time conversations with

customers during the entire development process or

the Priority Club Select card. Members o the online

community provided insight on benefts and services

that would deliver the most value in a travel credit card

program. This resulted in a product that oers such

benefts as an annual ree hotel night certifcate, a 10%

rewards rebate and no oreign transaction ees.


10/12


Ecommerce

Creditcardissuerswanttomakesurethattheir

brandsaretop-o-mindduringonlineshopping

andthecheckoutprocess.Toaccomplishthis,

theyoerexclusivediscounts,raudprotection

andconvenientonlineshoppingtools.

We ocused on online shopping becausethats where our cardmembers want

to use their card.Larisa Drake, VP of brandcommunications, Discover Financial Services,

in an interview with eMarketer, November 2010

MasterCardsGuerintoldeMarketerthatthecompanyis

ocusedonenhancingtheecommercevalueandexperience.

Oerconsumersabettershoppingexperiencewithgreater

saetyandconvenience,shesaid.Providemerchantswith

accesstonewcustomers,incrementalsalesromexisting

customersandreducetheabandonmentoonlineshopping

carts.Andenablecardissuerstohaveastrongerlinkwith

theircardholdersandincreasespendvolumes.

ThecompanylaunchedMasterCardMarketPlace,anonline

mallorcardholders.Theprogramaimstodistinguishitsel

bybuildingonthebuyingpatternsidentifedbyecommerce

partnerNextJump.MasterCardMarketPlaceoersconsumers

theabilitytopersonalizeandsocializetheironlineshopping

experiencebysettingpreerencesandemailnotifcations

romspecifcmerchants.Italsoenablescardholdersto

posteedbacktoFacebookandTwitter.ThesiteisavailabletoallMasterCardcardholdersandrequirescustomersto

actively,ratherthanautomatically,enroll.Retailersarenot

givenspecifccustomernames,contactinormationorother

personallyidentifableinormation.Instead,theyreceive

inormationaboutbroadershopperdemographicsinorderto

tailorpromotionaloerings.

Aspartoitsoerings,VisalaunchedRightcliq,anecommerce

solutionthathelpscustomersbrowseandcompareproducts,

checkoutonmerchantwebsitesandtrackpackagedelivery

status.RightcliqeaturestheWishspacewishlist,which

allowsconsumerstocollect,organizeandshareimagesoproductstheyareconsideringpurchasing.Otherkeyeatures

letconsumersbrowsemerchantoersrompopularbrands,

solicitadviceromriendsandstorecreditcardinormation

(bothVisaandotherbrands)inavirtualwallet.

VisarecentlyteamedupwithTheGaptolaunchatext

message-basedpersonalizedmarketingcampaignthatuses

transactionhistorytoidentiysuitableoers.Visaisalso

sponsoringFreeDealDayonLivingSocial,adailydealsite.

Customerscanpurchaseoneormultipledealvouchers

duringaVisaDealDaywithavalidUS-issuedVisacard.They

alsoreceiveonecomplimentarydealvoucherorthesame

merchanttogivetoariend.

We have signicantly increased our digitalmedia spend over the past couple o yearsand custom programs are an importantpart o our media plan as they reachconsumers when they are engaging with

transactions. Amy Michael, head of globalecommerce marketing at Visa, in an article in Marketing

Daily, November 2010

AmericanExpressinSiteisanonlineshoppingtoolthat

aggregatesanddeliversmembershipbonuspoints,reeshipping

andotherbeneftstocardmembersastheyshoponline.inSites

goalistomakedealhuntingeasieroritsmembers.Thesite

alertscustomersaboutdiscounts,reeshipping,bonuspoints

andotherspecialoers.Theprogramisavailabletomembers

oAmericanExpressMembershipRewardsonitsPlatinum,

Gold,Green,ZYNCandBluecards.AmericanExpresshasbeen

promotinginSiteprimarilythroughonlinechannels,including

email,onlinenewslettersandsocialmedia.

AmericanExpressalsohasitsDailyWishonlinemarketplace,

whichhasaashsales-likemodelandoerslimited-time

dealstocustomersonselectdaysotheweek,typically

TuesdaythroughThursday.ItemsoeredonDailyWishareavailableatgreatlyreducedpricesonafrst-come,frst-served

basis.Whenthemarketplaceopens,ahanduloitemsgoon

saleatapredeterminedtime,publicizedthemorningothe

sale.Asmallgroupocustomerswhoarethefrsttoclickthe

IWANTITbuttonbecomeseligibletopurchasetheproduct.
http://totalaccess.emarketer.com/Interview.aspx?R=6000435http://totalaccess.emarketer.com/Interview.aspx?R=6000435http://totalaccess.emarketer.com/Interview.aspx?R=6000435


11/12


Mobile Applications

Creditcardissuersrealizetheimportanceo

themobilechanneltomarketing,customer

serviceandecommerce.Asaresult,many

havelaunchedmobileappsoraccount-related

unctions,suchasbillpayment,managing

accountsandpayments.Recently,American

ExpressandVisabroadenedthescopeo

theirmobilefnancialoeringsandlaunched

innovativeappsthatcreatedynamicsocial

experiencesorcustomers.

Social Apps Combine Shopping, Networkingand Gaming

American Express partnered with Federated Media in

September 2010 to launch a mobile app, Social Currency,based on oursquare technology. The app complements

American Express Currency, a website that gives

fnancial advice to young people.

Social Currency invites users to shop with their riends

regardless o physical location. Users can share details

(including photos), prices, inormation about retailers

and their purchases. Users play Social Currency

with riends and every action results in points and

unlocking badges. They can earn Thrity Spender

or Super Shutterbug badges, similar to ones on

oursquare. While participants do not have to be

American Express cardmembers to use Social Currency,

the app is creating buzz about the brand and oers

American Express valuable insight about consumer

purchase behavior.

Visa and mobile money solutions provider Monitise

released the Visa Mobile application or iPhone

and BlackBerry, which makes use o location-based

technology, in December 2010. The app enables Visa

cardholders to receive customized oers that can be

redeemed in online or brick-and-mortar stores. It also

provides users with a map and directions to easily locate

nearby ATMs as well as retail outlets that redeem oers.

Visa Signature cardholders receive exclusive oers in

addition to those available to all Visa cardholders.

Conclusions

Successulcreditcardmarketinginitiativesmake

useonewtechnologiestodeliverpersonalized

andrelevantinormationtoconsumersand

osterdeeperandmoresustainablerelationships

Throughtargetedandinteractiveonline

communication,cardissuerscanincrease

engagementwithcustomersanddriveincreased

cardusageandspending.

Online advertising and email will remain prominent

digital marketing channels.Consumerspreerusingcredit

cardcompanywebsitesasaprimaryresourcetoresearch

productinormationandapplyornewaccounts.Emailis

consumerspreerredchannelocommunicationorcredit

cardinormation.Tooerthemostvaluetotime-strapped

andvalue-consciousconsumers,cardissuersshouldocuson

personalizedandrelevantmessages.

Cardholders want more rewards and savings.Rewards

areadecisiveactororconsumersselectingacreditcard.

Cardholdersvaluecashbackanddiscounts,particularlyin

todayschallengingeconomicclimate.Tobesuccessul,card

issuersshouldoeropportunitiestoearnpointsorcashback,

relevantpromotions,aconvenientonlineredemptionprocess

andavastselectionoredemptionoptions.

Consumers preer a humanized social media

experience.Whetheritistoprovideshoppingpromotions,

productinormationorcustomerservice,consumers

appreciateapersonaltone.Creditcardissuerscanleverage

onlinesocialmediachannels,suchasFacebookandTwitter,to

engageininteractivedialoguewithcustomers.

Credit cards that are top-o-mind during the online

shopping and checkout process will see the most use.

Someeaturescardholdersvaluedmostincludeaggregating

alertsondiscounts,enablingconsumerstosharepostsabout

purchasesonsocialnetworks,trackingdeliverystatuso

packagesandprovidingasecurepaymentportal.Byoering

enhancedshoppingexperiencesviaecommercesites,card

issuerscanencouragecustomerstokeeptheircreditcardas

thetop-o-walletpaymentchoice.


12/12


Related Inormation and Links

Related Links

Competehttp://www.compete.com

comScorehttp://www.comscore.com

Epsilon

http://www.epsiloninteractive.comKantar Mediahttp://www.kantarmedia.com

Mintel Comperemediahttp://www.comperemedia.com

Synovate Mail Monitorhttp://mailmonitor.synovate.com

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emarketer after the crunch-how credit card issuers market to consumers online

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