January

2011

After the Crunch:

Elisa Tavilla etavilla@emarketer.com
Report Contributors Lauren McKay, Stephanie Spady

How Credit Card Issuers Market to Consumers Online

Executive Summary: As the dust of the financial crisis continues to settle, still-cautious consumers are spending less and placing higher priority on paying off debt. As a result, credit card issuers are scrambling for new ways to promote card products, expand their customer base and engage with consumers through online channels.
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Reasons for Obtaining a Credit Card Through a Specic Company, March 2010 % of US internet users*
The rewards program 53% 58% 46% Good interest rate 10% 23% 24% Friend/family recommendation 10% 23% 3% Good product/service reviews 8% 12% 4% Balance transfer option 6% 15% 6% Offered the right amount of credit 3% 8% 16% Denitely Pretty sure No

Email campaigns, search and display advertising, and customer-focused websites continue to be the most effective online marketing tactics used by card issuers to attract and interact with their customers. Many issuers are further broadening their online marketing channels to include social media initiatives by establishing a presence on Facebook and Twitter as well as on video and shopping sites. The Credit Card Accountability, Responsibility and Disclosure (CARD) Act has had a profound impact on the industrys operations. It has redefined the way credit card issuers can charge consumers and has forced these companies to develop new products and rethink how they market to consumers. These include increasing focus on creditworthy consumer segments and offering more online financial management and education tools. Rewards have become a critical tool for credit card issuers to build and maintain deep, sustainable customer relationships. Nearly six in 10 consumers consider rewards a decisive factor in choosing a particular card product. Programs that offer cash back and rewards points and have a vast array of redemption options are the most popular with todays value-conscious set. Key Questions
How are credit card issuers using online marketing to attract

and retain customers?

How has the CARD Act affected online marketing in the credit

Note: *who recently opened a new credit card account Source: Epsilon, "Recharging Credit Card Marketing to Meet Evolving Consumer Expectations," July 20, 2010
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card industry?
What online features do consumers want for their credit cards? How are credit card companies using social media and

ecommerce to engage with customers?

Digital Intelligence

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The eMarketer View

Credit card issuers are increasing budgets for online and offline marketing. Traditional offline media channels (such as direct mail) and online venues (such as email communications, online advertising and website functionality) continue to be credit card marketers tactics of choice. Issuers sent more direct mail credit card offers in 2010 than in 2009. They are also investing more in newer online channels, including social media and mobile apps, to increase interaction and strengthen relationships with their customers. The CARD Act has wrought changes in how card issuers do business, but has had less impact on marketing initiatives. The legislation requires greater disclosure of terms and conditions, prohibits increases in interest rates deemed unfair and fees considered excessive, and requires changes in application and timing of payments. While the new regulatory environment has influenced the card industrys business structure and revenue strategy, it has not had as significant an effect on marketing. Many card issuers have incorporated legislation requirements into new products and marketed them as valuable cardholder benefits. They also continue to offer cards with introductory rates and no annual fees. Online, consumers prefer websites and email for credit card product and account information. Consumers use card issuers websites as a top resource to research products and as a favored channel to apply for new accounts. They prefer to receive information about their credit cards through email and respond to relevant, personalized, targeted and customized messages from their issuers. Rewards are a critical marketing tool for credit card issuers. A large percentage of consumers consider rewards a determining factor in choosing a credit card. The variety of rewards options, ease of getting cash back, and accumulation and redemption of points and miles are most important to cardholders. As a result, card issuers are differentiating their programs by offering more generous options and a wider array of rewards categories through enhanced online channels.

Credit card issuers can significantly boost engagement with consumers through social media. Though only a small segment of cardholders are connected to credit card issuers via social media, its importance is growing. Credit card issuers are increasingly using social networks, video sites, online communities and blogs to interact with consumers. In addition to providing information about products, promotional offers and customer service, issuers leverage social media to promote brands, stimulate buzz and gain insight about their brand and products in a candid, realtime, interactive environment. Credit card issuers can drive more card usage through ecommerce. Credit card issuers are broadening their market presence to include online shopping sites. They are experimenting with ways to increase spending by enhancing the online shopping experience with promotions, discounts, coupons and social shopping. Several issuers have launched sites and mobile apps that dynamically combine social networking, social shopping and social gaming.

After the Crunch

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Industry Overview
Credit Card Networks Deconstructed
American Express, Discover, MasterCard and Visa are the four 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 of banks, credit unions and other financial institutions worldwide. MasterCard and Visa typically focus marketing efforts at the brand level, while firms that issue MasterCard and Visa products market to consumers.

As the economy has begun to improve, banks are once again using direct mail and online marketing channels to expand their customer base and promote their cards as the top-of-wallet choice. Among the seven leading financial marketers that account for more than 85% of credit card advertising expenditures, four increased their ad budgets from Q4 2009 to Q1 2010 over the same period a year before, according to the June 2010 Kantar report. American Express and issuer JPMorgan Chase more than tripled their ad budgets, while Visa and issuer Bank of America only slightly increased their spending.
Credit Card Advertising Spending, by Advertiser, Q4 2008-Q1 2009 & Q4 2009-Q1 2010 millions & % change
Q4 2008Q1 2009 American Express JPMorgan Chase Visa USA MasterCard Capital One Financial Bank of America Citigroup $109.9 $48.9 $116.0 $115.5 $92.7 $27.3 $65.3 Q4 2009Q1 2010 $335.1 $164.2 $130.5 $73.2 $43.0 $36.6 $12.0 % change 204.9% 235.7% 12.5% -36.6% -53.6% 34.0% -81.6%

From 2005 through 2009, financial and regulatory pressures caused many financial institutions to slash their marketing budgets. Overall ad spending (excluding direct mail) on credit cards peaked in 2005 at $2.17 billion but fell to $1.40 billion in 2009, according to Kantar Media. During the same period, credit card issuers also reduced mailings and consumers received fewer offers in their mailboxes.
Credit Card Category Advertising Spending, 2005-2009 billions and % change
$2.17 $2.08 (-4.1%)

Note: consumer cards only; excludes direct mail Source: Kantar Media, "How Has Reform Legislation Affected Credit Card Advertising?" June 14, 2010
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$1.80 (-13.7%)

$1.69 (-5.9%)

$1.40 (-17.2%)

According to Mintel Comperemedia, approximately 1.2 billion offers for new credit cards were received by consumers in Q3 2010, compared with only 391 million in Q3 2009. A similar August 2010 study by Synovate Mail Monitor found that US households received about 2.25 billion credit card offers by the end of 2010, a 62% increase over the 1.39 billion in 2009. Issuers Chase, Citibank and Discover were the leading mailers in 2010.

2005

2006

2007

2008

2009

Note: consumer cards only; excludes direct mail Source: Kantar Media, "How Has Reform Legislation Affected Credit Card Advertising?" June 14, 2010
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We have increased our investment in online marketing, but we have also then sought to increase our exposure across multiple media channels, both online and offline.
Larisa Drake, VP of brand communications, Discover Financial Services, in an interview with eMarketer, November 2010

After the Crunch

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Credit Card Accountability, Responsibility and Disclosure (CARD) Act

Approved by Congress in 2009, the CARD Act went into effect in February 2010. The law limits when issuers of consumer credit cards can raise interest rates, prohibits certain fees, and bans billing and payment practices that the Federal Reserve deems unfair and deceptive.
When the CARD Act initially passed, there was anticipation that its requirements would have a significant negative effect on the way credit card issuers structure and market their products. For example, many industry watchers feared that annual fees would resurface, low teaser rates would disappear and reward programs would become less generous. Despite these speculations, none of these early-stage scenarios came to bear. In fact, Mintel Comperemedia found that the proportion of card offers with annual fees actually declined. In Q2 2010, only 28% of offers for new cards carried an annual fee, down from 33% a year earlier. Further, the mean annual fee across all cards fell from $93 in 2009 to $68 in Q1 2010, according to Synovate Mail Monitor. The majority of card issuers continue to offer an introductory APR (typically 0%) for balance transfers and purchases. In Q2 2010, 56% of mail offers promoted teaser rates, up from 37% in Q2 2009, Mintel found. Rewards options have also remained plentifuland in some cases are even more generousas issuers compete to attract and retain the most valuable customers with the best credit profiles. The CARD Act also mandated that monthly billing statements provide greater disclosure of finance charges and clearly demonstrate cost scenarios and savings from paying off balances at different rates. Some issuers have been able to creatively incorporate these regulations into new product offerings and marketing campaigns that highlight the advantages for consumers. For example, Chase introduced Blueprint, an online tool that helps cardholders develop an individualized plan for paying down balances over time. The offering is being positioned to help consumers take control of their finances and reduce the total interest they pay on revolving balances. Issuers are also launching products, both online and offline, that target the most creditworthy consumers, a segment that is more attractive and profitable to issuers under the new legislation. Chases Sapphire, for instance, is a personal credit card targeted to affluent consumers. Similarly, Capital One is focusing on the higher-spending customer segment with its Venture and Venture for Business travel rewards cards.

Email, Online Ads and Issuer Websites

Though traditional media and postal mail are still the top consumer sources for credit card information, online marketing channels are becoming increasingly important for credit card issuers. They are using email, online ads and issuer websites to market products, promote brands, strengthen customer relationships and drive card usage. More than 40% of US consumers said they recalled credit card products presented online via display advertising or email, according to a 2010 ICOM study.
Advertising Sources from Which US Consumers Recall Credit Card Products, 2010 % of respondents

Display ads 19%

TV ads 33%

Email (brand) 22% Postal mail 27% Note: numbers may not add up to 100% due to rounding Source: ICOM, "Finding the Right Channel Combination: What Drives Channel Choice," Aug 24, 2010
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After the Crunch

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A March 2010 survey conducted by Epsilon found that email is US consumers preferred channel for receiving information about credit cards (66% of respondents), followed by postal mail (40%) and company websites (20%). Issuers use email to communicate with customers about their accounts as well as to alert them about new offers and promotions. The most successful messages are targeted, with relevant information in which cardholders see value and purpose, according to Epsilon.
Preferred Channel for Receiving Credit Card Information, March 2010 % of US internet users*
Email Postal mail Company website 20% 10% 6% 4% 1% Product review website 40% 66%

Facebook Mobile phone

Search engines and issuer websites are also preferred destinations for consumers researching and applying for credit cards. A study by 41pound.org found that Google searches for credit cards totaled about 1.5 million per month. The most recent Compete data, from a December 2009 study of credit card consumer trends, indicated that 42% of consumers used issuer websites to research card products and 26% used search engines. Moreover, the study found that 36% of consumers used credit card issuers websites and 29% used an affiliated companys site to apply for a new card. Though 2010 data has not yet been released, card issuers increased investment in online channels suggests that website functionality and search and display advertising continue to be important marketing tools, and have not been affected by the CARD Act. Company websites, search engines and product comparison websites, such as Google Credit Card Comparison Ads (first tested in November 2010), remain key resources for credit card shoppers and applicants.
Resources Used During the Credit Card Shopping Process According to US Internet Users*, Dec 2009 % of respondents
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 nance 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/magazines 5% Note: n=312; *prospective credit card customers Source: Compete, "Credit Card Consumer Trends," provided to eMarketer, April 1, 2010
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Note: *who recently opened a new credit card account Source: Epsilon, "Recharging Credit Card Marketing to Meet Evolving Consumer Expectations," July 20, 2010
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We use email pretty aggressively because results have shown our cardmembers like to be communicated with via email.
Larisa Drake, VP of brand communications, Discover Financial Services, in an interview with eMarketer, November 2010
Card issuers continue to use targeted online display advertising to promote card use. Discover, for example, offered 5% cash back to its cardmembers for purchases at restaurants, department stores and clothing stores during the 2010 holiday season. Much of the companys display advertising is focused on encouraging customers to use their Discover card in relevant places.

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Rewards
Rewards have become a key point of differentiation in attracting the most valuable customers, especially those with the best credit profiles. Rewards programs continue to be the norm for the card industry, accounting for eight out of 10 offers in 2010, up from only six in 10 in 2008, according to Mintel Comperemedia.
A September 2010 Mintel Oxygen report about loyalty marketing found that 24% of consumers actively compared credit card offers in order to evaluate rewards programs, and 10% have switched to a different primary credit card in the past because of a better rewards program. This comparison-shopping behavior has intensified as a result of the economic crisis. Though cardholders who are less inclined to carry revolving balances tend to see more value in rewards programs than in lower interest rates, value-conscious consumers are demanding more cash back, more reward points and greater discounts for their patronage. Andrew Light, director of the InterContinental Hotels Group partnership at Chase Card Services, told eMarketer that consumers view rewards as additional value for something they were already planning to do. Its money youre going to spend anyway, he said, and I think, particularly at this time, all consumers are looking for ways to maximize value. A study by the Federal Reserve Bank of Chicago published in December 2010 found that credit cards offering rewards, cash back rewards in particular, entice consumers to increase overall spending and debt. For example, Chicago Fed economists found that a 1% cash back rewards program, which yielded an average reward of $25 per month, increased monthly spending by $68 and credit card debt by $115. Whats more, the study revealed that rewards often drive card usage among consumers with otherwise underused or dormant accounts. Cash back offers accounted for 41% of all rewards offers in Q3 2010, compared with 28% in Q3 2009, Mintel Comperemedia found. In addition to providing cash, issuers also recognize changes in consumer spending and are creating rewards programs that offer more generous returns on everyday items. In a study of direct mail, Mintel found that 45% of credit card offers in 2010 mentioned the word groceries somewhere in the mailing text, up from 20% in 2008. Mintel indicated that the quality of a rewards program is often the determining factor when consumers choose a credit card. The ability to instantly or easily redeem points and being offered a large number of redemption options were cited as the most important features.
After the Crunch

Interestingly, speed of redemption often trumps redemption value. Given a choice, 44% of consumers said they prefer lower-value rewards that can be redeemed quickly (for example, cash back, rebates applied to monthly balances or gift cards), according to a study released in June 2010 by Synergistics Research. Another 16% opted to accumulate points toward high-value or big-ticket items (such as airline travel). Enhancing Rewards Programs Online
A number of large credit card issuers that recognize the heightened importance of rewards are offering their customers greater flexibility 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 features seasonal promotions from the programs merchant partners, which include AMC Theatres, Best Buy, Target and others. Chase also launched a public version of its Ultimate Rewards site, which allows non-cardholders to explore current offers, redemption point levels and partners. rewards microsite, ItPaysToDiscover.com, offers cardmembers access to all redemption options in one place, including Cashback Bonus, gift cards, merchandise, charity donations, direct deposit and statement credits. 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 for virtual goods in Zyngas social games, such as FarmVille and CityVille. announced it is adding Zynga virtual gift cards to its Citi ThankYou Rewards program. Customers can also redeem their points for other virtual rewards, including digital music downloads, restaurant certificates, airline tickets, merchandise, cash rewards and statement credits. Citibank customers can combine points from credit card purchases with points from eligible checking accounts and other banking activities.

Discovers

American

Citibank

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Social Media
Credit card issuers are increasingly using social media to promote their brands, develop and market new products, and connect with customers. While only a small number of consumers are connected to their financial institutions on social networks, the number is growing. Card issuers should not overlook the potential of social media as a valuable and powerful marketing channel.
American Express, Discover, MasterCard, Visa and their issuers use a variety of social media to promote products, stimulate word-of-mouth conversations and assess public opinion of their brands and products. Most of the largest players in the industry are attempting to engage consumers through Facebook, Twitter, Myspace, YouTube, blogs and online communities. Customer experience analytics firm Serendios November 2010 BankInsight consumer banking study found that credit cards were among the most popular topics for customers involved in online conversations about banking products and services.
Top 10 US Banking Products/Services Mentioned in Online Conversations, Q3 2010 % of mentions
1. Credit card 2. Customer care 3. Mortgage 4. Fees and charges 5. Bank employees 6. Loan 7. Overdraft 8. Balance 9. Online banking 3.0% 6.0% 5.4% 10. Debit card 8.0% 10.0% 9.8% 17.4% 14.7% 13.4% 12.3%

Reasons that US Social Network Users Decided to Become a Fan/Follower of a Financial Services Company on Facebook or Twitter, 2010 % of respondents
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 nancial services purchase in the past six months and follow a nancial services company on Facebook or Twitter Source: ROI Research, "S-Net (The Impact of Social Media)" sponsored by Performics, Sep 9, 2010
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Credit card issuers have used participatory media to alert deal-seeking customers to promotions at select retailers, limited-time offers, travel ticket availability, and access to entertainment and sporting events such as the Super Bowl. An April 2010 comScore online banking study revealed that consumers were looking for ways to save via exclusive online shopping promotions (22% of respondents) and promotions at select retailers (also 22%) through social media engagement with their bank.
Reasons US Internet Users Engage with Their Bank via Social Media, April 2010 % of respondents
Exclusive online shopping promotions 22% Exclusive promotions at specic 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 nancial advice 13% Charity donations 10% Source: comScore, Inc., "The State of Online Banking," May 12, 2010
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Note: including social media, blogs and forums Source: Serendio, "BankInsight for USAQ3, 2010," Nov 10, 2010
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Card issuers are also leveraging social media for loyalty marketing. According to a 2010 ROI Research study, 50% of consumers who had connected with their bank on a social network site such as Facebook or Twitter did so because they were loyal customers. About three in 10 connected with their bank because it made them feel valued or part of the organization.

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After the Crunch

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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%).
Types of Twitter Accounts Used by US Bank and Credit Card Companies, Sep 2010 % of total
Firm/ website info 7% Recruitment 7% Multiple use 11% Commentary 36% Marketing and promotion 14% Customer service 25% Source: Corporate Insight, "To 'Friend' Is the Trend: Social Media and Financial Services Today," Oct 1, 2010
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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 Priceless Trivia to win prizes, and find 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-time communications about discounts, offers and promotions, and communicate with MasterCard 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 schedules to 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.

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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 find 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 benefit from the tweets. However, customers must ask specific card-level questions via email or phone, a policy that holds true for most financial 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 on Twitter where we can communicate with our customers about news, ways they can earn extra Cashback Bonus, our sweepstakes, where they can win prizes, and new information about features and benefits.
Larisa Drake, VP of brand communications, Discover Financial Services, in an interview with eMarketer, November 2010

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 specific 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 its credit 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.

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Online Communities Online communities help credit card issuers find the right target audience, gain insight into what consumers think about their brands, and offer clues on how to improve their products and programs. Oftentimes this takes the form of crowdsourcing, when a company listens to its customers and fans for new ideas and improvements. A full 80% of banking and financial institutions used online communities and crowdsourcing to develop and launch new products and programs in 2010, up from 63% in 2009, according to a November 2010 report from ComBlu.
Branded Community Integration with Social Media, by Industry, 2009 & 2010 % of US branded communities
2009 Travel/hospitality Entertainment Packaged goods Auto Gaming Insurance Banking/nancial services Technology Retail Telecommunications Healthcare/pharmaceuticals 0% 67% 69% 85% 0% 0% 63% 63% 53% 69% 100% 2010 100% 90% 86% 83% 83% 83% 80% 78% 78% 67% 20%

Crowdsourcing for New Products

American Express launched its first 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 feedback and hold discussions with ZYNCs marketing and product development team. They also have the opportunity to customize their ZYNC card with bundles of benefits and rewards, called ZYNC Packs, tailored to specific lifestyle needs and spending habits. American Express continues to use ZYNC Tank to identify additional passion areas that can shape new rewards. It recently launched four new ZYNC Pack offerings that were created based on customer suggestions from the online community.

Source: ComBlu, "The State of Online Branded Communities," provided to eMarketer, Nov 9, 2010
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While some cards allow people to personalize the outside of the card by choosing a design or adding a picture, ZYNC empowers cardmembers to design whats inside their card so the benefits fit their lifestyle and the things they enjoy mostwhether its fashion, fitness or food. Mary Hines, VP of ZYNC product management
at American Express, in a statement, November 2010
Chase Card Services and InterContinental Hotels launched the Priority Club Select Visa card, designed by frequent travelers. The two companies partnered with Communispace to create a private online community comprising members of InterContinental Hotels Priority Club Rewards loyalty program, who were also Priority Club Rewards Visa Signature cardholders. Through the online forum, Chase and InterContinental Hotels had ongoing, real-time conversations with customers during the entire development process for the Priority Club Select card. Members of the online community provided insight on benefits and services that would deliver the most value in a travel credit card program. This resulted in a product that offers such benefits as an annual free hotel night certificate, a 10% rewards rebate and no foreign transaction fees.

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Ecommerce
Credit card issuers want to make sure that their brands are top-of-mind during online shopping and the checkout process. To accomplish this, they offer exclusive discounts, fraud protection and convenient online shopping tools.
We focused on online shopping because thats where our cardmembers want to use their card. Larisa Drake, VP of brand
communications, Discover Financial Services, in an interview with eMarketer, November 2010
MasterCards Guerin told eMarketer that the company is focused on enhancing the ecommerce value and experience. Offer consumers a better shopping experience with greater safety and convenience, she said. Provide merchants with access to new customers, incremental sales from existing customers and reduce the abandonment of online shopping carts. And enable card issuers to have a stronger link with their cardholders and increase spend volumes. The company launched MasterCard MarketPlace, an online mall for cardholders. The program aims to distinguish itself by building on the buying patterns identified by ecommerce partner Next Jump. MasterCard MarketPlace offers consumers the ability to personalize and socialize their online shopping experience by setting preferences and email notifications from specific merchants. It also enables cardholders to post feedback to Facebook and Twitter. The site is available to all MasterCard cardholders and requires customers to actively, rather than automatically, enroll. Retailers are not given specific customer names, contact information or other personally identifiable information. Instead, they receive information about broader shopper demographics in order to tailor promotional offerings. As part of its offerings, Visa launched Rightcliq, an ecommerce solution that helps customers browse and compare products, check out on merchant websites and track package delivery status. Rightcliq features the Wishspace wish list, which allows consumers to collect, organize and share images of products they are considering purchasing. Other key features let consumers browse merchant offers from popular brands, solicit advice from friends and store credit card information (both Visa and other brands) in a virtual wallet.

Visa recently teamed up with The Gap to launch a text message-based personalized marketing campaign that uses transaction history to identify suitable offers. Visa is also sponsoring Free Deal Day on LivingSocial, a daily deal site. Customers can purchase one or multiple deal vouchers during a Visa Deal Day with a valid US-issued Visa card. They also receive one complimentary deal voucher for the same merchant to give to a friend.

We have significantly increased our digital media spend over the past couple of years and custom programs are an important part of our media plan as they reach consumers when they are engaging with transactions. Amy Michael, head of global
ecommerce marketing at Visa, in an article in Marketing Daily, November 2010
American Express inSite is an online shopping tool that aggregates and delivers membership bonus points, free shipping and other benefits to cardmembers as they shop online. inSites goal is to make deal hunting easier for its members. The site alerts customers about discounts, free shipping, bonus points and other special offers. The program is available to members of American Express Membership Rewards on its Platinum, Gold, Green, ZYNC and Blue cards. American Express has been promoting inSite primarily through online channels, including email, online newsletters and social media. American Express also has its Daily Wish online marketplace, which has a flash sales-like model and offers limited-time deals to customers on select days of the week, typically Tuesday through Thursday. Items offered on Daily Wish are available at greatly reduced prices on a first-come, first-served basis. When the marketplace opens, a handful of items go on sale at a predetermined time, publicized the morning of the sale. A small group of customers who are the first to click the I WANT IT button becomes eligible to purchase the product.

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10

Mobile Applications
Credit card issuers realize the importance of the mobile channel to marketing, customer service and ecommerce. As a result, many have launched mobile apps for account-related functions, such as bill payment, managing accounts and payments. Recently, American Express and Visa broadened the scope of their mobile financial offerings and launched innovative apps that create dynamic social experiences for customers.
Social Apps Combine Shopping, Networking and Gaming
American Express partnered with Federated Media in September 2010 to launch a mobile app, Social Currency, based on foursquare technology. The app complements American Express Currency, a website that gives financial advice to young people. Social Currency invites users to shop with their friends regardless of physical location. Users can share details (including photos), prices, information about retailers and their purchases. Users play Social Currency with friends and every action results in points and unlocking badges. They can earn Thrifty Spender or Super Shutterbug badges, similar to ones on foursquare. While participants do not have to be American Express cardmembers to use Social Currency, the app is creating buzz about the brand and offers American Express valuable insight about consumer purchase behavior. Visa and mobile money solutions provider Monitise released the Visa Mobile application for iPhone and BlackBerry, which makes use of location-based technology, in December 2010. The app enables Visa cardholders to receive customized offers 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 offers. Visa Signature cardholders receive exclusive offers in addition to those available to all Visa cardholders.

Conclusions
Successful credit card marketing initiatives make use of new technologies to deliver personalized and relevant information to consumers and foster deeper and more sustainable relationships. Through targeted and interactive online communication, card issuers can increase engagement with customers and drive increased card usage and spending.
Online advertising and email will remain prominent digital marketing channels. Consumers prefer using credit card company websites as a primary resource to research product information and apply for new accounts. Email is consumers preferred channel of communication for credit card information. To offer the most value to time-strapped and value-conscious consumers, card issuers should focus on personalized and relevant messages. Cardholders want more rewards and savings. Rewards are a decisive factor for consumers selecting a credit card. Cardholders value cash back and discounts, particularly in todays challenging economic climate. To be successful, card issuers should offer opportunities to earn points or cash back, relevant promotions, a convenient online redemption process and a vast selection of redemption options. Consumers prefer a humanized social media experience. Whether it is to provide shopping promotions, product information or customer service, consumers appreciate a personal tone. Credit card issuers can leverage online social media channels, such as Facebook and Twitter, to engage in interactive dialogue with customers. Credit cards that are top-of-mind during the online shopping and checkout process will see the most use. Some features cardholders valued most include aggregating alerts on discounts, enabling consumers to share posts about purchases on social networks, tracking delivery status of packages and providing a secure payment portal. By offering enhanced shopping experiences via ecommerce sites, card issuers can encourage customers to keep their credit card as the top-of-wallet payment choice.

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