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This story appears in the December 2008 issue of Cards&Payments.
As bank consolidation and new economic pressures cause industry competition to intensify, top card issuers and card networks are looking to extract maximum efficiency from their core branding efforts. That includes cutting advertising and marketing spending and taking a safe approach in creative messages by emphasizing safety, security and value in volatile times.
Visa Inc. in September positioned itself for more-efficient spending when it announced the consolidation of its advertising roster from four agencies to one. Longtime Visa advertising agency Los Angeles-based TBWA\Chiat\Day will assume lead global creative responsibilities for Visa beginning in January.
Besides saving money, Visa hopes to unify its global message, according to Antonio Lucio, who late last year became Visa chief marketing officer.
In its first creative effort since it won the assignment to be Visa's designated global creative shop in a creative shootout among the three other contenders, TBWA produced a series of ads that broke in November centering on Visa's long-running National Football League sponsorship (
One new TV spot shows fans tailgating for hours before a game and enduring wild weather conditions to cheer for their team. Billboards and mobile-marketing efforts in major cities support the campaign, which also uses Visa's "Life Takes Visa" tag line introduced in 2006.
MasterCard Worldwide also recently signaled plans to cut near-term advertising spending. When MasterCard announced its third-quarter results in November during a conference with analysts, Martina Hund-Mejean, chief financial officer, said advertising and marketing spending for this year would be down versus last year, but she did not specify by how much.
Advertising Goals
Asked by analysts during the call how far MasterCard could trim advertising without raising the ire of card issuers, Robert W. Selander, the company's president and CEO, said the degree of cutbacks would depend on the economy, consumers' spending levels and competitors' moves. "We believe we should be investing in our brand and that helps us drive utilization of our products," Selander said.
But if other card networks pull back on advertising, "then that would clearly cause us to pull that lever and ratchet back further than we would otherwise have done," he said.
Among MasterCard's most-recent TV advertising efforts have been adding mention of debit cards and resurrecting the Mr. Bill character from NBC-TV's "Saturday Night Live" comedy show, along with playing to the U.S. Hispanic market. Most of MasterCard's advertising incorporates its long-running "Priceless" theme line, first introduced in 1997. U.S.-based McCann-Erickson Worldwide is MasterCard's lead advertising agency.
"'Priceless' is a brand campaign that has gotten enveloped into the cultural lexicon," says Megan Bramlette, managing associate of U.S.-based Auriemma Consulting Group, noting the concept has become something bigger than just ads. "The fact that 'Priceless' has stuck around so long is testament that the company's efforts are incredibly successful."
Indeed, Chris Jogis, MasterCard vice president of U.S. brand development, believes "Priceless" has been engrained in society, and that is testament to its long-term effectiveness.
"We do all sorts of testing [of] advertising, and it has become something more than a short-term campaign," he says.
MasterCard plans to make more advertising and marketing inroads into entertainment, fashion and sports-marketing venues in 2009 and will continue to promote debit with the "Priceless" theme, Jogis says.
Pushing Value
Discover Financial Services continues to carve out a role for itself as a new-product innovator with credit cards that offer extra value. In a Discover TV spot that broke earlier this year, worry creases a homeowner's brow as deliverymen unload a washing machine and other major appliances in the driveway. "Can I really afford all this?" the homeowner seems to wonder.
The image is part of Discover's ongoing "Brighter" campaign, which encourages consumers to "spend smarter" and carry less debt by using the card brand's Paydown Planner tool and Motiva card, which rewards consumers with cash back for making on-time payments. "Maybe then we could have a better quality of life and be in a better financial position while we are living it," the ad's narrator says.
The campaign, created by U.S.-based The Martin Agency, addresses widespread concern about the economy and signals a shift in cardholder/issuer relations, with revolving credit taking a back seat to paid-in-full economics, observers say.
Discover cardholders can log onto the company's Web site and use the Paydown Planner to calculate exactly how much they need to pay each month to clear their balance by a certain date. The Paydown Planner bases figures on the terms and conditions specific to the cardholder's individual account. It even considers whether interest rates vary on the balance for different types of purchases or balance transfers.
Good Timing
Also tied to the "Brighter" campaign is Discover's Motiva card, which pays cardholders a month's worth of interest for every six consecutive payments made on time. The bonus comes in addition to the other "cash-back" rewards the cardholder receives for using the card.
Despite their apparent timeliness, Discover did not develop the Paydown Planner and Motiva card in response to the current state of the economy. It designed them instead to help cardholders become better financial planners, says Larissa Drake, Discover vice president of brand communications.
"It's been our mission all along to help consumers spend smarter," she adds.
However, some observers say the Paydown Planner and Motiva card could turn out to be a winning direction in the tightening economy. Both products represent "the inverse" of the industry's typical practices, says Brian Riley, research director for the bankcard practice at the U.S.-based TowerGroup, a research company owned by MasterCard Worldwide.
"Encouraging responsible cardholder behavior also reduces an issuer's exposure to additional losses at a time when delinquencies and charge-offs are rising," he says.
American Express Co. is tight-lipped about its advertising plans, following its announcement in October that it plans to cut $1.8 billion in costs next year, including reducing marketing and business-development spending. The company did not specify how much it would reduce marketing spending next year.
AmEx's most recent TV and print ads feature celebrities, including comedian Tina Fey and film director Martin Scorsese, in humorous print and TV ads emphasizing the convenience of AmEx cards for everyday spending. One spot featuring talk-show host Ellen DeGeneres touts such AmEx cardholder perks as concierge-level service and special access to concerts and other special events.
In online ads and through telemarketing, AmEx this fall is promoting its Business Gold and Business Platinum cards by offering steep short-term discounts on annual fees.
Card issuers also are sticking to basics for the remainder of the year in their creative advertising.
Safety and Stability
Citigroup Inc. plans to continue the creative campaign it launched last fall for its credit card unit, showcasing individual cardholders' everyday dreams and adventures in a reassuring light, themed, "What's Your Story?" The company expects to unveil new variations of the campaign in print, TV and online ads during the fourth quarter, a spokesperson for Citi says. U.S.-based Publicis is Citi's ad agency.
Bank of America Corp. does not have a specific advertising campaign for credit and debit cards, but in November the issuer launched a general TV spot promoting all of its products called "Pancakes," featuring a montage of customers enjoying simple pleasures such as morning pancakes before heading off to work.
The campaign's goal is to communicate "safety and stability" for all BofA products, including cards, by emphasizing warm images of everyday life, according to a BofA spokesperson. Print, radio and online ads support the effort, along with direct mail. U.S.-based BBDO is BofA's agency.
JPMorgan Chase & Co. continues to periodically advertise its Chase Freedom credit card in TV spots created by U.S.-based mcgarrybowen, along with the "Chase What Matters" theme line. The company would not disclose fourth-quarter advertising spending plans.
Capital One Financial Corp. continues to sporadically air TV spots in its zany series touting the customized options its cards offer though the "Capital One Card Lab," but the company would not disclose advertising plans. Its long-running theme, "What's in Your Wallet?" accompanies its ads. DDB Chicago is Cap One's ad agency.
Pressure on profits is likely to cause card issuers and networks to cut advertising and marketing spending in the near future, but they cannot afford to let their brands languish in the increasingly competitive marketplace, experts say.
Through a combination of more-efficient media planning and buying and strategic use of creative messages that have been proved to get results, issuers expect to plot their advertising and marketing moves carefully in the coming months. CP
Nathanial Hernandez and Andrea McKenna contributed to this story.
