CardMarketing 2.0

Welcome to the first edition of Card Marketing 2.0, the new online newsletter by Serverside Group. On a regular basis, we will be focusing on the latest trends in online card marketing, highlighting the technological developments that are enabling issuers to engage consumers in new ways, and profiling the companies that are ahead of the game.

The aim of Card Marketing 2.0 is to empower card issuers by helping them to harness the power of second generation (2.0) internet initiatives, and to think in new, innovative ways about marketing strategies and cardholder communication. Our goal is to support card issuers as they face the challenge of meeting the creative, democratic and ideological demands of the increasingly powerful Web 2.0 movement — and to help them maximize their profits in the process.

Card companies have to do something, because direct mail is dying. In the US, issuers saw a 0.2% response from direct mail credit solicitations in 2006. OK, direct mail isn’t gone yet, but its pulse continues to weaken. Despite this, many issuers continue to invest millions of dollars for an ROI that is frankly anemic. Lick, stamp and post is the mantra: we’ll get there in the end. The reality is they won’t.

But gradually, more and more issuers are looking for alternatives. Whisper it only, but things are beginning to change. Issuers are becoming more aware of the need to think differently, to think seriously about the seismic technological and socio-cultural developments taking place around them. They’re becoming aware of the need to implement viral strategies to access and traverse burgeoning online communities — and put an end to the dismal response rates.

With their powerful online presences and exceptional traffic levels, issuers certainly have the ability to explore new directions, but most don’t, straitjacketed by issues of size, structure and – all too often – caution. But in the brave new world of Web 2.0, dare to be different and you’ll reap the rewards. You’ll get more bang for your buck.

And a lot more bang, at that. With Jud Linville, President of the Consumer Card Services Group, announcing recently that Amex cardholders acquired online are 179% more profitable than those acquired through direct mail, online and viral marketing strategies are the future of card marketing. Or the beginning of that future, anyway. We don’t know where the future will lead, but one thing’s for sure: we’ll be following it on your behalf.