American Express boosted its marketing budget by double digits during the fourth quarter as it looked to attract new card members, expand its merchant network and beef up its digital presence.
Already the financial company has the largest media spend in its category. The company spent $913 million on marketing and promotions during the fourth quarter, up 13%, and $3.32 billion for the year, a 9% increase.
Most of its budget went toward attracting card members through acquisitions and co-branded partnerships with companies like Starwood Hotels and Resorts. It also sought to expand its merchant network, lending services and digital presence, said Jeffrey Campbell, exec VP-CFO at American Express, on an earnings call with analysts.
Promotions like Small Business Saturday, which encourages consumers to shop at small businesses on the day after Black Friday, helped the company expand its lending efforts and better connect with small businesses, said Mr. Campbell. The campaign drove traffic for American Express' partners and appealed to existing card members, he added.
"Small Business Saturday has been a tremendous addition to the overall range of the things we do with small business partners and growing our lending efforts," said Mr. Campbell. "It's one of the many opportunities we have to do a little bit more lending than you have seen us do in the last few years."
Fourth quarter profits climbed 11% to $1.45 billion, or $1.39 a share, from a year earlier as customer card spending increased. Fourth quarter revenue rose 6.6% to $9.12 billion from a year earlier. Despite the rise in revenue, the company said it plans to cut 4,000 jobs companywide.
-- With contributions from Bloomberg --