Major credit card banks are boosting their spending on advertising, asserting their identities and strategies in ways that may set them apart from MasterCard and Visa.

Seeking benefits other than the ones they get from those associations' generic advertising, which their membership fees nevertheless help to pay for, card issuers are increasingly intent on highlighting their own products and in many cases their own brand names.

Citigroup, the perennial leader among bank card issuers, has been the most prominent in this regard. Though Citigroup's branding priorities sparked a high-profile dispute with Visa U.S.A., leading the New York banking company to shift its allegiance to MasterCard, other issuers are aggressively going after credit card growth, among them Bank One Corp. and Chase Manhattan Corp.

Chase, Bank One's First USA division, Capital One Financial Corp., and Wachovia Corp. each more than doubled its annual spending on television ads last year, according to the newsletter publisher Faulkner & Gray.

"Ad spending at the issuer level has increased dramatically," said William Keenan, president of De Novo Corp. in Wilmington, Del., a firm that offers advertising and other consulting services to card issuers. "Barely a month goes by when there is not some credit card television campaign going on."

Citigroup spent $32.3 million on television spots for credit cards in 1998, up from $14.5 million in 1997, said Faulkner & Gray, a unit of Thomson Financial, as is American Banker.

"You're going to see a lot more Citibank commercials," said Susan Weeks, a Citigroup spokeswoman. "We want to be a global financial services brand, and one of our leading products is credit cards. ... We want to make our card distinct."

Citigroup's Citibank subsidiary is still remembered for commercials several years ago with the tag line, "Not just Visa, Citibank Visa."

The company's co-chairman, John S. Reed, more recently crusaded for more freedom to assert the Citi identity on cards, leading to the rift with Visa and his resignation this year from the Visa board. Both bank-owned associations have since gotten flexible about where the logos go on cards: Visa is permitting its name to go on the back of some debit cards on a pilot basis. MasterCard has gone further, officially giving issuers the option of putting its logo on the backs of credit cards.

Historically, banks have been more than happy to see MasterCard and Visa advertise in different ways. The competition was viewed as healthy, in the process emphasizing that the brands had mass-market appeal and were widely accepted by merchants. The communal advertising budgets are now seen as especially beneficial to community banks, which typically spend very little themselves on advertising.

At larger banks, credit cards often competed for advertising dollars with other products such as mutual funds, and with MasterCard and Visa prominent on the airwaves, marketers were content to focus on direct-mail promotions.

Some of those bigger banks are getting into the same big advertising leagues that the associations have long been part of.

According to Competitive Media Reporting of New York, Visa spent $225.8 million on television advertisements in 1998, down from $242.2 million in 1997. MasterCard spent $155.6 million, up from $107.9 million.

American Express Co.'s comparable figure for card products was $173.2 million, down from $193.2 million. Morgan Stanley Dean Witter & Co.'s Discover card unit spent $75.4 million last year, down from $98.7 million.

All four major brands increased ad spending in the first quarter of 1999 compared with the first quarter of 1998. Their combined spending was $172.3 million, versus 154.4 million last year.

These budgets are now looking more modest in light of what individual issuers are doing. Richard Vague, chairman and chief executive officer of First USA, told an electronic commerce conference sponsored in May by Forrester Research that his company's annual marketing budget was $1 billion.

Capital One said it plans to spend $80 million to $100 million on global brand advertising between now and yearend 2000. In April, it hired a new advertising agency, D'Arcy Masius Benton & Bowles, a subsidiary of MacManus Group.

Spun off from Signet Banking Corp. four years ago, Capital One wants to become a "world-class marketing company," said Richard D. Fairbank, chairman and chief executive officer. "It's only natural for us to move forward by developing a winning global brand strategy," he said in a statement announcing his company's ad agency choice.

Capital One spent $15.5 million on television ads in 1998, up from $100,000 in 1997, according to Faulkner & Gray. Last year's spots were for a new 9.9% fixed-interest-rate card that the Falls Church, Va., company said would mean "no more rate-hopping" for consumers.

Capital One said its total 1998 marketing budget was $446 million, which included print advertising and direct mail. The company's newfound aggressiveness is due to the fact that "now we have resources in our arsenal to do it right," said a spokeswoman.

The current wave of individual bank advertising began with the cobranding phenomenon in the early 1990s, spearheaded by Household International's General Motors card and the AT&T Universal Card, now owned by Citigroup.

What followed was a rise in local or regional advertising that complemented direct mail campaigns and the MasterCard and Visa efforts. Ad budgets would wax and wane, depending on the health of the business.

One ad-dollar decline occurred in 1997, according to John Almash, president of Stratcom, a subsidiary of De Novo Corp. that provides competitive intelligence for card issuers. When profits decline, the first thing to be cut is the marketing budget, he said.

More recently, delinquency rates have steadied, and lenders say losses are under control.

But marketing experts say more forces are at work today than merely a cyclical surge in ad spending-notably industry consolidation and the desire of the biggest banks to have bigger brands. They are also fighting against the glut of direct mail that has led marketers to seek new promotional avenues such as the Internet.

"People need to receive stimulus from a variety of channels to get it to register today," said Mr. Keenan of De Novo.

Even credit unions, which usually stay "below the radar screen" when it comes to advertising, have "ramped up significantly over the past 18 to 24 months," Mr. Keenan said. "They feel threatened and want to make sure they preserve their position."

At some banks, regional television advertising for credit cards has increased dramatically.

Bank of America spent $2.2 million on televised card ads in 1998, up from $1.6 million in 1997, said Faulkner & Gray. Chase Manhattan's spending surged to $5.6 million from $800,000.

Some banks rely on television ads but not for specific products. First Union Corp., which began a major branding campaign on television last year, said it wants to promote the idea of the "total banking relationship."

"The idea is to have the customer consider the credit card as an extension of that relationship," said Scott Carter, vice president of credit card marketing at First Union. It does, however, run national newspaper ads for a Visa card that lets consumers earn air-mile points.

Steven J. Smith, president of S.J. Smith & Associates, said issuers still consider Visa and MasterCard advertising a mainstay, and use their own commercials to highlight special products and features. The associations' ads tend to emphasize the cachet and flexibility of credit cards in general.

Cobranded card advertising is different, said Frances Dale, president of Entandem, a credit card consultancy in Sterling, Va. The cobranding partner usually shares advertising costs and contributes its own prominent name.

MBNA Corp., which issues cards on behalf of hundreds of colleges, nonprofit organizations, and affinity groups, relies "on the identity that our customers have with the group," said Brian Dalphon, senior executive vice president of the Wilmington, Del., monoline company.

Ms. Dale questioned the value of television advertising for credit card companies not promoting cobranded or affinity cards. "The only thing that has been proven for the industry is direct mail," she said. "The jury is still out on whether (television is) an efficient use of your marketing dollars."

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