After spending the past year cutting back on direct mail solicitations, card issuers are retreating from one of their few remaining acquisition channels: online affiliate marketing.

The channel, which includes lead generation Web sites that let consumers browse several issuers' offerings at once, had been considered a relatively cheap and easy way to sign up cardholders. Issuers often pay the sites only for applications received that they approve, ensuring a higher return on their investments. Direct mail, by contrast, requires issuers to pay up front for materials that many consumers simply discard without opening.

But observers said the affiliate sites generally attract less creditworthy customers, whom most financial institutions are avoiding these days. The exodus from the channel is another example of how issuers are putting less emphasis on finding new customers and redirecting what remains of their marketing budgets to earning more money from current customers.

Since November most major issuers have removed at least some of their products from lead generation sites and online advertising networks. JPMorgan Chase & Co. and HSBC Holdings PLC's U.S. card unit have almost stopped using such intermediaries altogether. Most other major issuers, including Bank of America Corp., Citigroup Inc., Discover Financial Services, and American Express Co., have pulled several products from the sites, or stopped using some sites, over the past two months.

Some issuers, including Citi, blamed the "difficult market environment" and indicated that the pullback from online affiliate marketing was temporary.

"We're facing some challenges," said Curtis Arnold, the founder of, which the online marketer QuinStreet Inc. acquired last year. "We expected to see some scaling back, but to see Chase pull not only their consumer cards, but their business cards, out of the space almost entirely. … That caught me by surprise."

Campbell Edlund, the founder and president of EMI Strategic Marketing Inc., which advises issuers like Citi on marketing and loyalty strategies, said credit quality and macroeconomic concerns have played a role in such pullbacks.

"In today's market, with FICO scores crashing and burning, affiliate channels are shakier," Ms. Edlund said. "Who goes to the affiliate channels? It's not somebody who's 700 FICO."

Also, the economics of lead generation sites, which can require issuers to pay either "per click" or for each approved application, are harder to justify in the current environment, when most financial companies are slashing their marketing budgets, she said.

An even bigger motivation for many issuers, according to observers, is an overall move away from account acquisitions. "Many banks, many issuers are investing more in capturing wallet share than in acquiring prospects," Ms. Edlund said. "Issuers are really leveraging captive channels like branches, their own online channels, their call centers. The marketing dollars they spend really have to have the highest return."

Most acquisition marketing efforts appear to be falling, though online marketing only recently caught up with direct mail volume, which has been falling dramatically for the past year.

In October consumer card acquisition mailings by U.S. issuers fell almost 50% from a year earlier, to about 361 million pieces, according to the Chicago market research firm Mintel International Group Ltd. Since last summer issuers' use of the much cheaper alternative of e-mail acquisition marketing has fallen just as dramatically, according to Mintel.

"Issuers are being selective about who they're mailing new offers to, but I don't expect them to stop going after new customers completely," said Stephen Clifford, Mintel's vice president of financial services. He also said that direct mail volume could level off this year.

Card lead aggregation Web sites have reported a similar drop-off in traffic. In November unique visitors to, one of the largest such sites, fell 25% from a year earlier, to 843,000, according to comScore Inc.

Jody Farmer, the vice president of strategic marketing for Inc., said the pullback resulted from declines in both consumer interest and eligibility for credit. "As issuers raise their approval standards, fewer accounts are approved." is one of the few sites with which JPMorgan Chase has maintained a relationship, Mr. Farmer said.

Neither JPMorgan Chase nor HSBC would discuss marketing strategy. Jeanette Volpi, a spokeswoman for Citi, wrote in an e-mail: "As a result of current market conditions, Citi is pulling select products from all of its affiliate marketing relationships. Citi will continue to evaluate the market and would consider returning some or all of the products to the affiliate marketing channel should conditions improve."

Desiree Fish, a spokeswoman for Amex, said it has stopped doing business with a few online partners and pulled four consumer cards — the Hilton HHonors card, the JetBlue card, the Clear for American Express card, and the Preferred Rewards Green card — from its remaining online partners after a recent "deep-level analysis of all of our marketing channels."

The cards are "still doing very well," she said. "The affiliate channel is still a very important part of our marketing mix.", which first reported the pullbacks by JPMorgan Chase and HSBC, also reported last week that B of A would pull out of the channel completely as of Jan. 1.

But Betty Riess, spokeswoman for B of A, said, "We have not pulled out of the channel completely." A Web search showed B of A cards were still available on some third-party Web sites on Friday.

The Charlotte company has discontinued marketing through some sites, Ms. Riess said. "We do periodically evaluate where we market and which cards we feature and may make changes based on a variety of factors, including response and effectiveness."

Jon Drummond, a Discover spokesman, wrote in an e-mail that it is "not continuing any of our affiliate marketing relationships for business cards at this time," as one of "a number of actions to maintain our credit quality, which include reducing marketing in areas that pose higher risks."

Discover has not "made similar wholesale changes with our consumer cards," he wrote.

JPMorgan Chase has removed its small-business cards from all online channels, including its own site.

Gail Hurdis, a spokeswoman for the New York company, wrote in an e-mail last week that it is accepting applications "through retail branches and direct mail," and that it has "temporarily removed the online application process to update it."

The company will start accepting small-business card applications again through its own site "in early 2009."

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