Online review is next step in Discover repositioning

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Discover Financial Services is searching for an interactive agency as the company continues to reposition its credit card.

A Discover spokeswoman said company officials are meeting with agencies they are already familiar with and the review is being handled in-house. The company would not disclose who is pitching for the account, previously handled by I-Traffic, New York. A decision is expected in the spring.

Both the Discover spokeswoman and I-Traffic President Ron Novas said the split was amicable and a mutual decision. They did not elaborate.

The online review is only the latest agency switch for Discover, which last year moved its general advertising account to Goodby, Silverstein & Partners, San Francisco, and hired Upshot, Chicago, as its first promotions agency. Discover is also searching for a public relations agency to replace Fleishman-Hillard, Chicago. Agencies will receive requests for proposals in early February on that review.

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Riverwoods, Ill.-based Discover has made several moves over the last year to set itself apart from bank-issued rivals Visa USA and MasterCard International. Those competitors control nearly 80% of the $1.2 trillion annual credit card volume in the U.S. Discovery's efforts include a revamped Web site (discovercard.com), a new ad campaign from Goodby and an increased focus on events and promotions (AA, Nov. 1).

U.S. credit card companies are all mining Internet users as a source of growth. According to a recent study by Internet market researcher Cyber Dialogue, the number of consumers using cards for online transactions jumped to 19.2 million by the third quarter of 1999, from 9.3 million in 1998 and 4.9 million in 1997.

Thanks to an aggressive strategy of signing "preferred card" deals with Web sites, Visa USA claims the largest share of online spending -- 50% of dollars spent online, according to Cyber Dialogue -- but all competitors have made moves to catch up. Card companies have allied with e-commerce merchants, developed digital wallets and launched card products aimed at online shopping.

Discover doesn't have the same high profile on the Internet as its competitors and is a latecomer to the Internet marketing fray, said Charles Wendel, president of Financial Institutions Consulting.

"Visa and American Express have really focused on the Internet. Clearly, they're the leaders. Discover is just kind of out there," he said. "They're in a catch-up position . . . it's not too late, if they have a clear value proposition."

Contributing: Hillary Chura.

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