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American Express OPEN gets real

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American Express
Headquarters: New York
Brand established: 1850
2003 advertising: $379.7 million
Brand equity: $11.9 billion
CoreBrand ranking: No. 18
EXPERT INSIGHT
Strengths:
Jim Gregory: “American Express came back from a significant crisis in the early 1990s, rebuilding their corporate and product brands to the highest levels since we’ve been tracking them.”
Al Ries: “A high-end reputation: Affluent people, the people that spend the most money on consumer products, generally prefer carrying American Express cards to Visa and MasterCard.”
Challenges:
Hayes Roth: “They have two very strong competitors in Visa and MasterCard.”
Ries: “Resistance by retailers to the higher fees asked by American Express.”


American Express Co. launched its small-business services unit in 1987, but by the end of the 1990s, the company believed that its marketing message had become too similar to those of all the other companies that were by then offering special cards to that market.

The point was driven home when Amex saw a reel that intercut the ads of companies offering small-business cards, and there was almost no differentiation. "We all looked the same and felt the same," said Tom Sclafani, Amex public affairs director.

The epiphany was used not just as an opportunity to alter American Express' marketing communications but to change the products and services the company offered to small businesses. By 2002, Amex was ready to launch OPEN: The Small Business Network, the first subbrand in the company's history. "OPEN is not an ad campaign; it is a truly transformative event within the business," Sclafani said.

The OPEN Network offered new services to business owners, including an online financial dashboard, streamlined bill paying, discounts from OPEN partners such as D&B and AT&T Corp., and access to working capital.

With Ogilvy & Mather, Amex developed an aggressive campaign, which consisted of advertising, direct and other media, to introduce the new subbrand.

In the past year and a half, American Express' OPEN Network has used even more aggressive, innovative means to communicate its brand benefits. Most prominent, it has used product placement on two reality television programs. First, Amex sponsored the reality show "The Restaurant," which ran in 2003 and featured chef Rocco DiSpirito starting a new restaurant in Manhattan. The OPEN Network ran ads on the show and created a Web log for Rocco; Amex products were also featured prominently during the show.

As a marketing tool, the show performed remarkably well for Amex. "Total prospect awareness of the OPEN brand increased about 70%," Sclafani said. The results convinced the OPEN Network to sponsor a second reality show this year, "Blow Out," which chronicled Jonathan Antin's efforts to open a hair salon in Beverly Hills, Calif. In response to some complaints, Amex toned down the product placement in the second show.

The Open Network saw small-business card use grow in the double-digit range year-to-date in 2004 compared with the same period of 2003. The company attributed at least part of the performance to its affiliation with "The Restaurant" and "Blow Out." "We are very pleased with reality TV," Sclafani said.

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