How Cardlytics got banking’s biggest rivals to collaborate on advertising

Cardlytics has added Wells Fargo & Co. to the list of banks using its card-linked offers platform after a successful pilot, joining JPMorgan Chase & Co. and Bank of America Corp., the latter of which has leaned on Cardlytics’ marketing service since 2012.

Notably, these rivals aren’t demanding exclusivity.

The fight to differentiate banking services has become less important than the critical mass of the audience Cardlytics provides for advertisers willing to dangle deals through credit and debit cards.

“In the early days, banks did worry about exclusivity with card-linked offers, but what we’ve all learned is that advertising requires scale, like what you see with a massive platform like Facebook,” said Lynne Laube, Cardlytics' COO and co-founder. Large banks can’t deliver that level of advertising alone, but by sharing a platform like Cardlytics, they each can draw more and better deals, she explained.

Cardlytics now serves 15 of the 20 largest banks, where advertisers provide offers based on payment card customers’ purchasing habits. Customers click on deals that appeal to them, and when they make the purchase, the savings flow to their account. Cardlytics also sells to smaller banks through processors including FIS, Fiserv and NCR. More than 2,000 banks use the platform, the company said.

Wells Fargo participated in a pilot with Cardlytics over six months in three cities, according to Laube. The pilot recently ended, and Wells Fargo will formally go live with the marketing program in the coming months.

Chase also signed with Cardlytics last spring and will go live soon, Laube said.

Banks still have some ways of customizing the consumer experience with Cardlytics, said Scott Grimes, the company’s CEO.

“Deals reflect how bank customers shop, so customers of different banks and combinations of accounts will see different offers,” Grimes said.

A typical deal is 10% off on a purchase at a national retailer; merchants fund the deals directly. Bank customers who routinely view deals on their mobile app or online banking portal typically spend 9% more on their cards, according to Grimes.

Laube likens the evolution of banks’ card-linked marketing programs to the way airline frequent flier rewards programs have evolved.

“Whoever was the first airline to offer frequent flier rewards had a unique advantage, but when all airlines adopted them it actually created more stability and marketing opportunities for the whole industry,” Laube said.

Cardlytics announced Tuesday that its total revenue was $35.6 million for the quarter ended June 30, up 8% over the same period a year earlier.

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