Cardlytics Steps Closer to Unlocking 'Big Data' of Payments

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The promise of unlocking some of the "big data" within payments is coming nearer, with new technology expanding the way consumer purchase data is used to shape marketing campaigns.

Cardlytics, which provides some of the nation's largest banks with card-linked offers, recently introduced software enabling marketers to target consumers more precisely—and through broader media channels—using data gathered from consumer credit and debit card purchases at 1,500 U.S. banks including Bank of America, Citibank and PNC.

The new service, an API called Cardlytics Platform Solutions, builds on Cardlytics Direct, its core card-linked offers product introduced in 2008, said Brandon Horne, director of bank marketing at the Atlanta-based company.

Whereas Cardlytics Direct uses anonymized consumer purchase data to design relevant offers for participating banks' customers, Cardlytics Platform Solutions for the first time enables marketers to harness that data for in-store, social/mobile, email, video and TV advertising, Horne said. Platform Solutions also provides tools to measure the effect of marketing campaigns using card purchase data, he said.

Several advertising agencies, a large national home-goods retailer and a television set-top box provider are among companies exploring Cardlytics' latest offering, which leverages several additional marketing tools to make the card purchase data useful in other media channels. One example is AddThis, a Vienna, Va.-based online marketing firm Oracle recently acquired, which is using Cardlytics' consumer purchase data to refine its target audience for specific campaigns.

What's more intriguing for banks: If Platform Solutions takes off, banks already participating in Cardlytics Direct will reap additional revenue, Horne said.

"Many retailers have a good handle on exactly what their customers are buying within their own stores, but we help them understand where else their customers are spending their money," he said. That, in turn, gives marketers better clues into which specific products to promote—including where, when and how to phrase messages—to improve results, Horne explained.

In addition to identifying prospective audiences ripe for specific marketing campaigns, Platform Solutions also provides measurement tools for campaigns by comparing actual purchase data with sales results in the wake of marketing campaigns, Horne said.

Cardlytics Direct, the service from which Cardlytics Platform Solutions evolved, captures consumer purchase data when users log in to participating banks' mobile and online banking sites, according to Horne. Customers' purchases are tracked via a cookie on the desktop or via a device ID, and the data is anonymized and used to shape relevant consumer offers. Banks pay nothing for Cardlytics Direct. When consumers redeem deals, marketers pay a fee that's shared between the bank and Cardlytics.

"Marketers saw great return on investment from using card purchase insights to reach likely buyers within banks' channels, and it became clear they could apply that same intelligence to other marketing efforts," he said.

Advancements in card-linked marketing tools may be a plus for marketers, but existing technology still falls short of the kind of personalization that big data could one day deliver for banks, according to Richard Crone, an analyst with Crone Consulting LLC.

"The key is incorporating machine learning algorithms that tailor offers to consumers in context with functionality that enhances the overall shopping experience," he said.

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