Cardlytics' Transaction-Based Ad Model Booming

As a business model, Google is a Web advertising platform with a search engine, e-mail and productivity software suite, Web browser and a host of other computing tools built on top. Search for something on Google and you usually find what you're looking for, along with any number of paid advertisements for products that might have something to do with what you seek. Apply that concept to advertisements based on consumer purchases printed in an account statement, and you get an idea of where Cardlytics is going with this.

According to an AdvertisingAge article, Cardlytics sees the business of connecting consumers to marketers via bank statements booming this year, with big names such as McDonald's Macy's and Staples joining in.

In all, Cardlytics, a privately held company that officially launched the program last November, says it has run more than 100 marketing campaigns reaching nearly half a million customers. By the end of the summer, the company expects to have 50 to 70 financial institutions on board, reaching some 10 million customers by the end of the year.

In a blog post for Bank Systems & Technology last October, Cardlytics president and cofounder Lynne Laube attributed some of the market's potential to the growing use of debit and online banking.

Research shows that more than half of consumers view debit and online banking programs as the most important products and services their bank offers. However, most banks do not invest in them. This can be attributed to the fact that debit cards have thin margins primarily based on interchange, and bill pay and online banking are typically managed as cost centers, generating no profit at all.

However, by leveraging transaction data, banks can turn these products and services into centers that generate profit and increase customer loyalty. This information can be securely utilized in ways that bring meaningful profits and loyalty to institutions' online servicing and debit programs by enabling merchants to effectively target customers and drive revenue-generating account activity with rich reward offerings.