The CardLinx Association is working with its members to form standards to measure the link between advertising and marketing campaigns and payments performance.
"The challenge is the banking and payments industries, and the digital media and publishing industries. These industries should work together, but historically they have not worked together," says Silvio Tavares, CEO and president of the CardLinx Association, whose members include Microsoft, Bank of America, First Data, Cardlytics, Facebook and others.
CardLinx's new Hummingbird Standard, which the group expects to finish by early February, will include performance metrics such as customer incrementality (a measurement of purchase behaviors that follow a marketing campaign), overspend and repeat spending versus new customer spending. MasterCard is includes First Data, Bank of America and Living Social are part of the working group building the standard.
CardLinx is also developing standards for card-linked insertion orders (Boar), fraud reporting and prevention (Chameleon) and priority of offer redemption (Cobra).
"Given the multi-channel or omnichannel trend that people are talking about, where you shop at home on a laptop then move to a tablet or smartphone and take that with you into a store to check out, that is hard to measure," says Dom Morea, a senior vice president at First Data.
The goal of the standards is to find a way to track a payment back to where a consumer viewed a card-linked or loyalty offer. "It's an old problem in marketing," Morea says. "As John Wannamaker once said: 'Half of my advertising spending is wasted. I just don't know which half.'"
Once the standards are completed and released, merchants and issuers would be able to match consumer payments data to Web or mobile ads viewed by consumers.
"There is no medium right now where you can say an ad was viewed by one million people and that led to $3 million in added purchases," Tavares says.
Other measurements will include where consumers viewed ads or offers, and the payments activity that resulted, Tavares says. "You can know if your company's Facebook, Microsoft or Google ads performed better, so you can shift more card-linked offers to one over another, for example," he says.
The association's overall mission is to improve interoperability in the card-linked offers and loyalty market. There has been a growing interest in card-linked offers as companion to certain payment technology. For example, VeriFone and CardSpring allow shoppers to redeem digital coupons by swiping their cards at merchants that use VeriFone Payware Connect Gateway.
Other payment companies are also increasing their use of marketing data, particularly in digital channels. Cardlytics connects its rewards technology to Facebook to increase speed, and processors such as Global Payments and Heartland have partnered with digital marketing companies to provide card-linked offers. First Data provides the technology that underpins Foursquare's card-linked rewards program.
"There has been an increase in digital advertising, but the question that remains is whether digital offers actually produce incremental sales," Tavares says.
To determine the effectiveness of these offers, "what is required is some level of collaboration between digital publishers on the one hand, companies like Facebook and Microsoft; and payment networks and banks on the other side," Tavares says.
Collaboration is difficult because many card-linked offer programs are structured differently, and the emergence of mobile wallets over individual card accounts as an option to link marketing offers also complicates marketing performance measurement, says Richard Crone, a payments consultant.
However, "if you can have a standard set of reporting it makes it easier to convince those that will be buying the promotion space of performance," he says.