The Secret World of Selling Cards on the Web (1999)

You know things are hot when the key players won't say much about their efforts to sell cards on the Internet. we've got some information While direct mail still rules as the king of credit card solicitations, there's a new kid on the block. Although you shouldn't expect the number of credit card offers stuffed in your mail box each week to decrease in the short term, many credit card issuers, including some of the biggest names in the business, are testing the viability of Internet marketing. In the last several months, several large Internet marketing deals have been inked. For example, MBNA Corp. has signed an affinity credit card marketing deal with EarthWeb, Inc. (www.earthweb.com) which sells business supplies over the Internet. The deal is estimated to be worth seven figures in revenue to EarthWeb over the term of the agreement. Bank One Corp., under its new online bank identity, WingspanBank.com, has just signed a multi-year co-branding agreement worth a reported $135 million with the Internet portal Lycos, Inc. This comes on the heels of a $500 million marketing pact Bank One's other subsidiary, First USA, made with America Online. Providian Financial Corp. is marketing an online credit card it calls Aria and has bought two online businesses--GetSmart, Inc. and WebCard Visa. Capital One, slower than some of its competitors to do credit card marketing on the web, has signed up an online advertising agency, DoubleClick Inc., to help them in their Internet marketing efforts. Sounds like it's working Is Internet marketing the wave of the future for credit card issuers? Should they throw away their zip code demographics in favor of e-mail addresses? More than likely yes, say most industry watchers, although the jury is still out. Because card issuers are just getting started in Internet marketing, they don't yet have a body of data that they can analyze to see whether or not it's working. We are at the very beginning of [the Internet marketing] curve, says Theodore Iacobuzio, senior analyst with Tower Group, Needham, Mass. What these guys are doing is throwing everything they can think of at the wall, and seeing what sticks. Iacobuzio predicts that issuers will try everything from exclusive agreements with portals, co-branding with web sites, banner ads, e-mail solicitations, and direct mail solicitations containing the issuers, web site, inviting the customer to apply online and get instant approval. But it's much too early to tell what's going to work and what isn't going to work, says Iacobuzio. While no credit card issuer would disclose which of their Internet marketing efforts are successful, they will say that they are in the testing phase, and with a vengeance. NextCard, Inc., an Internet-only credit card issuer, is busily testing not only which web sites are best for marketing their card, but the types of advertising (banners vs. button vs. text) that work best on a particular site, and the type of message (low interest rate vs. secure web shopping). We are building an incredible proprietary database of what are the best sites, and sub-segments of sites, for us to get the best bang for out buck, says Dan Springer, NextCard's chief marketing officer. Even though they've been doing Internet marketing for three years, a virtual lifetime in web years, Bank One is still learning. [We will test] anything to find what works best, says Kurt Campisano, senior vice-president of marketing and business development, WingspanBank.com. We have to learn a lot, and we have to test a lot of different things. When asked what has been most successful for the bank, Campisano says, We won't talk about that since that would be the big lump start for any business looking to compete with First USA. Cheap...relatively If no one knows for sure (or won't say) that Internet marketing works, what is the appeal of the Internet for marketing-savvy card issuers like Bank One who are investing millions in the medium? …