Payments Giants Turn Credit Card Data Into Ad Dollars

American Express rolled out a new program Monday that helps brands forge connections with the company’s cardholders in the U.S. The program, Amex Ads, is a digital advertising platform that allows businesses to place their marketing messages in front of Amex’s 34 million U.S. consumer card customers.

American Express will use first-party data with Amex Ads to send targeted messages to customers who use the company’s digital platforms.

The news from American Express comes on the heels of a similar announcement from Mastercard. The payments network revealed last week that it is using data insights from transactions to help increase the efficacy of its new digital media network, Mastercard Commerce Media.

The announcements from the payments leaders show how credit card companies can harness the power of data to create new revenue streams that don’t directly rely on cardholder spend.

“Mastercard uses insights from permissioned data to identify the right audience for each offer, even meeting consumers on the move with tailored content as they travel,” the company wrote in a press release covering its new digital media network.

Credit card companies can accrue a significant amount of information on their cardholders, including where and when they like to shop.

They can then use that data to inform their own targeted marketing efforts and make the most out of their advertising budgets. Card companies can employ data analytics to target cardholders with campaigns they’re likely to respond to and keep them out of the ones the data suggests won’t appeal to them.

But, as American Express and Mastercard have shown recently, that data may also help them create opportunities for other brands.

American Express plans to start its new program on its travel booking website before introducing it to other platforms the company owns.

Amex Ads leverages the strength of the company’s relationships with brands and its customers to benefit both parties, said Alexander Drummond, Executive Vice President and General Manager, Membership Portfolio Services at American Express, in a press release.

“With Amex Ads, brands can reach card members with relevant content at exactly the right time, while maintaining the privacy, security, and trust our card members expect,” Drummond added.

American Express intends to capitalize on its relationships with brands at a time when credit card companies face mounting competition from providers that connect consumers with different ways to pay. The growing popularity of buy now, pay later products threatens to take market share away from credit card issuers.

But by tapping into other sources of revenue, credit card companies can bolster their bottom lines. Companies with diverse revenue streams can position themselves to weather storms that disproportionately affect a particular area of their business.

American Express can help partners gauge the performance of their advertising efforts.

Extracting more value from data stands to be a worthwhile undertaking for companies like American Express and Mastercard that have an immense amount of cardholder data.

American Express touts its ability to measure the return on advertising dollars companies spend with Amex Ads, according to its press release. Offering reliable and comprehensive measurements of an ad campaign’s performance can help brands feel more comfortable about where they’re investing their marketing funds.

“Our capability to measure sales uplift online and in-store can level the playing field, delivering tangible evidence of the advertising value delivered,” said Jacob King, Senior Vice President, Head of Amex Offers Digital Media at American Express.