Home Banking Could JPMorgan Chase’s New AdTech Business Revolutionise the Banking Industry?

Could JPMorgan Chase’s New AdTech Business Revolutionise the Banking Industry?

by internationalbanker

By Joseph Moss, International Banker

 

On April 3, JPMorgan Chase debuted Chase Media Solutions, a new digital-media business that provides business brands with the opportunity to connect directly with the bank’s 80 million customers. In so doing, Chase has become the latest enterprise to leverage its customer data to earn potentially huge sums in advertising revenue. As the first major lender to pursue this strategy, Chase’s use of adtech (advertising technology) could well usher in a new era of targeted advertising-based opportunities for the banking sector.

The launch of Chase Media Solutions comes not long after Chase integrated Figg, a leading card-linked marketing platform it acquired in 2022, which the bank describes as “a natural step” in its efforts to create a two-sided commerce platform and bring “win-win value” to both its business clients and banking customers. With the creation of its newest unit, the bank now hopes to breathe new life into its credit-card business while maintaining its market-leading position as the biggest card issuer in the United States.

Of course, with JPMorgan Chase reporting annual net income for 2023 at a mighty $47.8 billion, it does not exactly need this new advertising business to stay afloat. But with market-research firm eMarketer estimating global expenditures on retail media networks at 21.6 percent of all digital ad spending in 2024, up from 15.1 percent in 2019, it nonetheless remains a potentially lucrative opportunity that will most likely serve as an addendum to its more traditional financial-services businesses.

According to the bank, Chase Media Solutions will operate as a “conduit” for brands by displaying their ads on its website and mobile apps and by connecting them with consumers’ personal passions and interests. In turn, Chase customers—cardholders, for example—can benefit from receiving highly personalised offers from various brands as well as opportunities to receive rewards such as cashback.

JPMorgan Chase has been offering deals to its customers through its Chase Offers programme, which will be involved in Chase Media Solutions’ strategies as the home of certain targeted offers marketed to customers. Brand ads will now appear in the Chase Offers sections of customers’ online and mobile accounts, with advertisers able to reach various consumer segments, such as new, lapsed and loyal customers—but only those customers whom the bank’s purchase data suggests will be interested.

Chase Media Solutions highlights three key advantages for brands and customers from using its new platform:

  • First-party data: With Chase’s owned transaction data, brands and agencies can precisely target customers at scale based on purchase histories (such as targeting new, lapsed or loyal customers).
  • Better returns on investment (ROIs) and attribution: Brands can capture incremental spending on everyday purchases, both in-store and online, with clear attribution for every media dollar spent.
  • Trust and brand safety: The platform is built on the foundational trust and institutional credibility of Chase, including a verified audience and brand-safe owned channels.

“As the only bank-led media platform of its kind, Chase Media Solutions combines the scale and audience of a retail media network with the exclusive advantages of Chase’s first-party financial data, institutional credibility and precise targeting capabilities,” Chase stated at the launch of its new media unit. “Today, the bank’s large consumer base and 6 million small business customers benefit from Chase’s wide range of travel, dining and shopping offerings—generating unparalleled insights across consumer categories.”

According to Chase Media Solutions’ president, Rich Muhlstock, moreover, a deep understanding of consumer spending across various categories is enabling the US’ biggest bank to reimagine what retail media networks can offer. “Like retailers, we have first-party data and a dedicated audience. But what sets us apart is the unrivalled scale and insights from our customers—having long-served as a trusted guide for their financial decisions,” Muhlstock stated at the launch of Chase Media Solutions. “Chase reaches across brands, merchants and shopping verticals, providing a comprehensive view of purchase behaviour; this strengthens the degree of personalization, helping brands deliver offers that stoke consumer interests.”

The new unit joins other businesses that, to varying degrees, are generating revenue by selling ad space on their digital properties, such as apps and websites, including Uber and Best Buy. These companies are using customer data to deliver targeted messaging to generate additional revenues beyond their core businesses. But it is the sheer scale of JPMorgan Chase’s operation, with data pertaining to a whopping 80 million customers, that sets it apart. By sitting in the middle between its brand clients and its customers, Chase can enjoy earning revenues from both sides of each transaction.

And perhaps most crucially of all, from a privacy perspective, the brands involved will not be able to access any of Chase’s customer data directly. Speaking with the New York Post, a Chase spokesperson confirmed that the bank could not share its customers’ data with advertisers as “a matter of security and regulation”. Instead, Chase Media Solutions will work with brands to target shoppers with specific offers that align with their purchasing histories. Deals for dog food, for example, will only be shown to Chase customers whose transaction histories suggest they are pet owners. Chase customers, meanwhile, will see the offers once they access their app accounts and can then decide whether to proceed with the ones they find appealing.

Advertisers pay fees to Chase only for those ads that result in completed sales. According to Muhlstock, this means that businesses can clearly record results that are attributable to their spending with Chase, helping marketers obtain the transparency needed to demonstrate their worth. “We will be part of larger campaigns, because there are other things that are obviously always going to be important to building brands and awareness and things like that,” Muhlstock told the Wall Street Journal. “But this fits in nicely with something that can truly drive sales.”

In terms of the strategy’s success thus far, Chase Media Solutions already has much to write home about, particularly regarding its 30-day pilot campaigns for a number of partners, including Air Canada, Solo Stove, Blue Bottle Coffee and Whataburger. In the case of Air Canada, Chase Media Solutions’ services used customers’ purchase data to target potentially new customers—those with no purchase history with the airline—with a series of cashback offers aimed at driving more ticket sales. “Air Canada’s transaction-based marketing campaign landed an impressive $2,315,191 in incremental sales (45% incrementality for new customers) and successfully inspired transactions from 9,450 new customers,” Chase Media Solutions noted on its website. “It garnered 32.2MM customer impressions during the 30-day campaign and an average order value of $542.

Indeed, the campaign was so successful that Air Canada decided to run another campaign to “test and optimize the offer construct while continuing to engage both new and existing customers”. According to Chase, this second campaign achieved a 40-percent incremental lift for new customers and a 75-percent incremental lift for loyal customers. It also resulted in transactions from 7,475 new customers, $2,270,172 in incremental sales and $5,166,599 in total sales. “The Chase team succeeded in creating a thoughtful, targeted offer that exceeded our expectations,” Scott O’Leary, vice president of loyalty and product for Air Canada, confirmed. “Two distinct offer constructs drove incremental revenue and awareness for Air Canada amongst Chase’s cardmember base. These tests clearly demonstrated the potential of the Chase Media Solutions channel, and we look forward to working together more in the future.”

Clearly, these early results suggest much promise lies in store for Chase Media Solutions. That said, with customers often in possession of several credit cards from different issuers that invariably serve different spending purposes, Chase may not always entirely or accurately capture each customer’s spending habits. In turn, this may prove a challenge for brands regarding the extent of products, services and offers they can ultimately market to the bank’s customers.

Nonetheless, these early signs of success mean that this targeted-marketing model could well prove popular with lenders right across the banking industry. Indeed, according to Ron Shevlin, chief research officer of Cornerstone Advisors, Chase’s new business unit “could—and should—force smaller financial institutions” to consider and evaluate offering a similar service. “To date, most community banks and credit unions have been hesitant to—or outright against—putting third-party ads on their digital properties. They feel it would be out of sync with their brand and/or would be offensive to their customers and members,” Shevlin noted in an April 11 article for Forbes. “In addition, they think that it wouldn’t be a big money maker. And they’re right—but only in a narrow sense. There’s a bigger opportunity here that smaller financial institutions are overlooking.”

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