AmEx's OPEN has launched a new business Gold card that will reward small businesses for spending in advertising. The credit card, issued by AmEx's small-business division, offers double reward points for advertising-related purchases.
Rob Ciccone, VP, American Express OPEN, said his company's research shows that small business owners' top concern is finding new customers, and that more and more small businesses address this concern through advertising programs. "Consumers are online and businesses are continuing to follow them there in the way they run their current business and in the way they attract new business," Mr. Ciccone said. "We were looking to reward [companies] for their investments and allow them to reinvest it back into their business."
Online advertising buys through services such as Google AdWords, Yahoo Search and Facebook are included in the double rewards-points program. Some billboard and TV advertising purchases also qualify.
For American Express, the rewards bonus makes sense on a few levels. First, if business owners are already using their credit card to buy online advertising, why not encourage them to use AmEx's small-business card. After all, in 2010, the average advertising spending by companies with fewer than 100 employees was $3,176, up significantly from $2,092 in 2009, according to a survey conducted by BIA/Kelsey, a local-media consultancy.
The product is also a move to draw more attention to SearchManager and AdManager, two marketing apps launched by American Express, which also qualify for double points. In the past two years, American Express OPEN has unveiled a suite of online marketing products – some paid and some free – to round out their small-business offerings. SearchManager, which launched in 2010, aims to help small businesses manage all their search campaigns in one spot; and AdManager, launched this spring, is a display advertising-management tool for small businesses.
"It wouldn't hurt," Mr. Ciccone said when asked if the company was hoping the double-rewards program would push cardholders to purchase AmEx's search and display products. "We think they work really well together."
So can AmEx's new Gold card move the needle in small-business advertising? "I think it will have an impact because I think people make decisions based on added benefits," said Mark Fratrik, VP-chief economist for BIA/Kelsey. "The question is how much [of an impact]." Mr. Fratrik pointed to consumers who book flights on specific airlines because of rewards programs even if those flights aren't the cheapest as proof that rewards shape motivation.
The card's annual fee is $175, but will be waived for the first year, Mr. Ciccone said. In June, AmEX OPEN announced that rewards points could be used to purchase Facebook Ads credits.