Card companies shift their online promotions to messages about secure buying
By Lauri Giesen
Few companies have the reputation or the experience with brand marketing that can top that of the major credit card companies. Think Visa's "everywhere you want it to be," American Express' "Don't leave home without it" or the often mimicked MasterCard's "Priceless" campaign.
But when it comes to promoting the use of their cards for online shopping, the card companies are abandoning the pure branding play for messages that focus on security. With a number of studies showing that consumers' greatest reluctance to shop online comes from fear that their card information will fall into the wrong hands, card issuers and associations are working hard these days to assure consumers that it is safe to make purchases on the Internet using their credit cards. To accomplish that goal, the card companies are focusing serious attention and spending serious dollars on marketing and working on developing closer ties with certain retailers.
A simple strategy
Indeed, when Visa and MasterCard executives talk about their future marketing campaigns for online shoppers, much of their time is spent describing campaigns to promote Verified by Visa and MasterCard's SecureCode programs. Even the nation's largest credit card issuer—Citibank—which does not participate in the security programs of the two associations, is concentrating much of its online marketing campaigns on promoting its own payment security program.
The card companies' strategies are simple: customers who feel secure will use their cards to shop on the Internet more often, generating greater revenue for the issuers of the cards, who get a cut of each transaction. "When we started advertising the use of our card to make Internet purchases back in 1997, we relied on basic brand messages. Now as the Internet has evolved, we've started to promote the concept of security," says Gerry Sweeney, senior vice president, product and incentive marketing at Visa USA.
And since the vast majority of purchases on the Internet are made with credit cards, the Internet world holds a lot of promise for the associations and card issuers. "We see the growth opportunities with Internet shopping and we realize how important it is to promote the fact that our card can be used safely to make purchases," says Amy Radin, executive vice president for Citi Card e-business.
But while card associations are promoting the concept of security over pure branding, the two worlds can often merge. Take a recent MasterCard campaign. It is relying on its well-known "Priceless" campaign to illustrate the safety of online shopping. In one print ad there is an image of a bulldog—itself a symbol of security. The ad copy talks about the cost of buying a personalized dog tag online and the cost of buying a dog dish online. But the value of personalized protection so that the consumer is safe to shop for these items online? "Priceless," the tag line says.
Online or offline?
MasterCard is placing these ads in general consumer magazines, including People, Sports Illustrated and Good Housekeeping. In the near future, it intends to run TV slots. Separate from the consumer magazines, MasterCard is promoting its SecureCode program to retailers through trade magazines.
With SecureCode, and similarly with Verified by Visa, financial institutions that issue cards get their customers to sign up for the program. When cardholders register, they receive a password. Consumers who shop at a retail location that participates in one of the security programs receive a pop-up screen at check-out. They use this pop-up screen to enter their passwords. If the password entered matches the one on file with the card issuer, the retailer and card issuer know that the person making the purchase is the same person to whom the card was issued. Retailers then have no liability if the transaction goes bad.
But while MasterCard is focusing much of its own efforts through print and later TV advertising, it is relying on its members—the financial institutions that issue its cards—to promote SecureCode on the Internet. It is providing marketing materials to those members so that they can place them on Internet sites, including many of their own web sites. "We expect to hit a wide variety of vehicles to get our message across," says Tom Maxwell, MasterCard director of e-business. "We'll focus mostly on print ads now, but our members will be conducting most of their promotions on the Internet."
As far as working with specific retailers to promote SecureCode, MasterCard has signed up a number of retailers that offer discounts to consumers who sign up for SecureCode through them.
In contrast to MasterCard's print and TV ads, Visa has been moving toward a greater use of Internet-based promotions, such as putting advertisements on shopping and search sites. "We want to get to consumers at the point where they are likely to actually make a purchase," says Visa's Sweeney.
The motivators
In choosing its message, Visa examined what motivates consumers to make purchases on the Internet—convenience and the ability to easily comparison shop. Then, Visa looked at what constrains online purchases—security fears.
Among the messages that Visa is trying to communicate through its advertising campaign is the safety of Verified by Visa as well as its ease of use and the assurances that there is zero liability to consumers whose card number is used for fraudulent purchases. "We looked at what consumers told us and we found that we needed to explain what we're doing to prevent card fraud as well as explain the remediation we have in place in the event that something does go wrong," Sweeney says.
Like MasterCard, Visa is trying to get both the banks that issue its card and the retailers that accept it to promote Verified by Visa at their web sites and in other customer communications, such as bank statements. Among the retailers that have worked with Visa to promote the service are Wal-Mart Stores Inc., 1-800-Flowers.com, J.C. Penney Co. Inc. and CompuUSA Inc.
In addition to the Verified by Visa program, many of these retailers are also promoting the Visa Rewards program so that customers who shop at specific online retailers can get additional rewards points. In some cases, consumers can get extra rewards if they use Verified by Visa to make a purchase, Sweeney says.
But not all bank advertising comes from the card associations. Citibank, for one, has its own security program and its own promotions. But like the associations, it puts security near the top of its list of messages that it wants to be communicated in its advertising. "We intend to really pick up on our promotional efforts in the fourth quarter of this year," says Radin. "We want to focus on promoting our virtual account number program and the security benefits that entails."
Citibank's virtual account numbers take a different approach from what either Visa or MasterCard is doing. A Citibank cardholder who wants to make a purchase receives from the bank a temporary virtual account number. This account number is different for each purchase, but is recognized by Citibank as the correct number during a transaction. Unlike Verified by Visa or SecureCode, merchants do not have to sign up for the service. In fact, retailers don't even know that the number the customer is entering is different from the customer's actual card number.
Citibank is also working with select retailers to promote the program, including an effort with Dell Inc. and Sears, Roebuck and Co. where customers get a discount when they shop at those online stores with a Citibank card.
In the case of Dell, the computer company's catalog features coupons that customers can redeem online when they use a Citibank card to purchase a computer. With Sears, the promotion also applies to consumers who research their shopping online but make the actual purchase using a Citibank card at a Sears store.
When working with retailers on such promotions, the cost to the retailer may vary, Radin says. In some cases, the cost of the discount is shared by the retailer and Citibank. Other times, the retailer pays the entire freight. "It varies, especially when considering whether it is a marketing test or a rollout, but more often, the retailer funds the actual cost of the promotion. What we bring to the table is the value of the marketing as we then pay to advertise the promotion," Radin says.
Citibank is also using its own card web site to promote online shopping with select retailers. Radin says about 30% of the Citibank cardholders are registered to view their account information and pay their credit card bills online. Citibank has recently developed the ability to conduct targeted promotions based on the cardholder's demographics to its customers when they sign on. The number of personal offerings made on those web sites is up 300% in 2004 from what was offered in 2003, Radin says.
Like Visa and MasterCard, Citibank is working hard to make sure the message it sends out regarding online shopping is consistent with what it is communicating about its card in the offline world. "We're trying to do a better job when we talk to customers of integrating our messages. We want a mention of online shopping to be integrated into all the card communications we send out," Radin says.
But despite the advertising campaigns that have recently started, with even more planned for the holiday shopping season this year, many observers believe it isn't enough. "If the card associations are doing much to promote their online shopping programs, it's stealthware," says John Gould, director of consumer credit for TowerGroup, a Needham, Mass.-based consulting firm. "I do 90% of my shopping online and I haven't seen evidence that the associations are putting much money into promoting the use of their cards online."
Indeed, one retailer mentioned by MasterCard as a partner in promoting SecureCode—etronics.com—says it is still waiting for those promotions to begin. "We signed up for the service and we put a notice on our site, but that was about it," says Mayer Balser, etronics vice president. As for promoting the service, Balser says, "I thought they (MasterCard) were supposed to do that. We're still pretty much waiting to see what is going to be done." A MasterCard spokeswoman explains that the association is currently handling all the SecureCode promotions itself and plans an aggressive consumer marketing campaign for late this year in anticipation of the holidays. "We have plans to work one-on-one with specific merchants, but there is nothing we can reveal at this time. We haven't finalized those plans yet. It might be early next year before you'll see anything with regards to specific merchants," the spokeswoman says.
Preference pushing
Even those who have noticed an increase in the amount of promotions relating to the use of credit card for Internet shopping aren't impressed with what they've seen. "I've seen a steady increase in the amount of advertising the associations have done related to Internet shopping, but I have not seen much that is new or interesting when they do promotions," says Jim Accomando president of Accomando Consulting Inc., a firm that specializes in payments systems.
Accomondo is a little more impressed with Citibank's advertising campaign promoting the security of its card in regards to identify theft—including the online shopping ramifications.
In terms of working with retailers, some of the associations have also tired to align retailers as partners to get the retailers to put their card first on the retailer's checkout pages. This "default card" often shows up automatically at check out and customers have to then scroll down to click on another card.
TowerGroup's Gould, however, says the associations shouldn't waste their time on this issue. "Most consumers who shop online are smart enough to be able to figure out how to click on the card they want to use," he says. "Plus, it's just like in the offline world, most people know what card they want to use—a decision usually made based on rewards programs or other factors—before they get to checkout. Just because a card shows up first doesn't mean they'll use it."
But while Accomando agrees that most people will click on the card they want, he believes there are enough consumers out there who will click on the card that shows up first. "There may not be a lot of people like that out there, but there are enough of them that you can swing some serious market share," he says.
Visa's Sweeney, however is not concerned about the default card issue. While some retailers automatically put the cards in alphabetical order—putting Visa last on the list—he says most retailers rank them in the order in which they are most often used. With the largest market share in both the online and offline worlds, Visa usually gets on top, he says.
Regardless of whether the communications are regarding card preference, security or pure branding plays, the next few months could get more interesting based on what the card associations and issuers have on their agendas.
With the holidays coming up, and studies showing large increases in online holiday shopping over the last few years, this is the time when it is most critical for card companies to get their messages of security and brand imaging out in the market.
And most say they're ready to do just that.
Lauri Giesen is a Libertyille, Ill.-based freelance business writer.
