Abstract: Credit card advertising among banks has to some extent dried up and blown away. Many national card issuers, including BankAmerica, Chemical, Barnett, Crestar, First Chicago, U.S. Bancorp, and Amalgamated Bank of Chicago, have run no ads since late 1991 and have no plans to do so. These issuers rely on direct mail to reach existing customers or targeted prospects. Mass media advertisements for credit cards have become less common as the market has become more saturated. The average American has 2.5 credit cards--you'd have to look under a rock to find someone who really needs an additional card. are expensive compared to statement stuffers, and direct response gets people to do something, while ads may not. Some card advertising still goes on, of course, particularly from Visa, MasterCard, and American Express. These ads try to build brand recognition, market share, and usage. Relative newcomers AT&T and Discover are still building their cardholder base with ads promoting their features. A brief outburst of ads from bank card issuers earlier this year promoted newly lowered interest rates, or, in the case of Citibank, a new photo ID feature for its credit cards. Here's a quick look at a few of those campaigns. encounter. People's Bank, Bridgeport, Conn., advertised its 11.5% APR card (with a $25 annual fee and 25-day grace period) on three local radio stations last November. We've been a low-rate card for more than six years, says Dave Driscoll, corporate identity officer responsible for credit card marketing. That's our strong suit. The $6 billion bank considered the radio spots a backdrop to its direct mail efforts. Radio used in concert with direct mail boosts response, Driscoll says. Radio by itself is not a good way to spend your money. You tend to get more unqualified responses than you want, even though it gives you an opportunity to segment people. Nothing is as efficient as direct mail. Another drawback to radio, Driscoll says, is the disclosure requirements. If the tag line is the legal disclosure, that's the last thing you leave people with. People's also ran newspaper ads briefly at the end of 1990. allows you to make disclosures more easily, but it's not targeted--you get the good, the bad, and the ugly, Driscoll says. We generated 14,000 applications from one ad, but our approval rate was terrible. Newspaper experiment. Huntington National Bank, Columbus, introduced a prime-plus-7.9% card June 1. It also announced that it would waive the $18 annual fee for any existing or new cardholder who had another Huntington relationship. To spread the word about the new offer quickly, the bank for the first time bought space in the Thursday and Sunday editions of the major papers in Columbus and Cleveland. Because it also mailed statement stuffers and put posters up in its lobbies, the bank has not been able to determine what the response to the ads has been. A lot of people who have called for the new offer have wanted to convert existing accounts, rather than open a new one. Senior Vice-President Melvyn Watson says this is what the bank expected. We're not a big national issuer, he says. We generally restrict our solicitations to crossselling our own customers. He estimates that about 30% of the bank's 300,000 cardholders will convert. The hope is that the lost interest and fee income will be made up by customers using their Huntington cards more often. The bank has no plans to run another newspaper ad. Ads are extremely expensive and difficult to track, he says. I'm sending out lots of statement stuffers. I can do that pretty cheaply. Promising beginnings. Another bank getting its feet wet with credit card advertising is Wachovia Bank, Winston-Salem, N.C. During April and May it advertised in Georgia once a week in major newspapers and from time to time on the radio, talking about its prime-plus-2. …
Publication Year: 1992
Publication Date: 1992-10-01
Language: en
Type: article
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