Bank of America is kicking off a new program called BankAmeriDeals, touting "cash back deals you choose, put right on your card." A Bank of America video promoting the program highlights marketers including Sports Authority, Verizon and 7-Eleven.
The push works like this: when consumers sign in to their online-banking accounts, they'll see promotions linked to transactions. Underneath a transaction for a restaurant, there could be an offer from that eatery for $10 cash back when $20 is spent. Or, underneath a purchase at an apparel chain, a rival could offer 15% cash back for shopping at its stores or website.
The completion of the Bank of America rollout is a big leap for two-year-old Cardlytics, the transaction-driven marketing platform company working with it on the promotion. Cardlytics, which just two years ago boasted its ability to reach nearly half a million consumers, will expand its reach to more than 200 million consumers responsible for $500 billion in spending thanks, in part, to the addition of Bank of America.
In addition to Bank of America, Regions Bank and PNC have embraced Cardlytics' platform, promoting it as a rewards program for customers. In total, 300 banks have signed on.
"The banks' primary motive is engagement and retention," said Rod Witmond, senior VP-product management and marketing at Cardlytics. "It doesn't cost the bank anything beyond the hardware and the cost of the people who implement the program. So, banks win with a rich, relevant reward program that they don't pay for."
Marketers who have run campaigns with Cardlytics range from Aeropostale to AutoZone and FedEx to The Body Shop.
"It's gone from science fiction to a real channel that can have really significant impacts at the national level for national retailers," said Marc Ginsberg, exec VP-merchant services at Cardlytics. "For retailers, [the Bank of America rollout] gives us scale. We can really impact comp-store sales growth."
Mr. Ginsberg said that marketers are adding Cardlytics campaigns to their ad budgets both for tactical efforts such as targeting competitors' customers, as well as strategic efforts such as driving sales during a specific time period. Cardlytics operates under a pay-for-performance model, so it gets paid only when consumers redeem an offer. Payments to Cardlytics vary based on the client category and type of offer, though advertisers do receive a projection.
Cardlytics is quick to deflect any questions related to privacy, noting that customer information remains behind the bank's firewall. The company is also not privy to demographic information. After all, in a world where you know where people are actually shopping, demographics don't really matter quite as much.
Customers do have the option to opt out, though few act on it. Cardlytics says the average opt-out rate is less than 1%. The average redemption rate for offers is about 15% though it jumps as high as 70% for popular offers, such as a national fast-food chain, for example. Offers are divided between local, regional and national outlets, with local outlets making up the largest contingent of Cardlytics 2,000 merchant partners.