A year after it entered the UK market, US credit card giant Bank
One has become one of the UK’s major advertisers. An estimated spend of
pounds 16.2 million in the first nine months of 1999 has put it on
course to become a top-three credit card advertiser.
Bank One’s ad strategy puts across a clear price statement via heavy use
of direct mail and press. Its aim is to win business from higher-priced
bank credit card companies, by offering a low introductory rate
(typically 5.9 per cent APR) followed by a rate (usually 16.9 per cent)
that undercuts the likes of Barclaycard.
Based in Cardiff, Bank One launched with affinity cards linked to three
Welsh charities, Bristol City Football Club and Cardiff City Football
Club. Its core card products comprise a basic Visa or Mastercard with a
rate of 6.9 per cent APR then 17.9 per cent.
Bank One’s advertising is handled by Rapier. Some 97 per cent of its
adspend is concentrated on direct mail with the remainder going on
press, including loose inserts, which were first used in February this
Bank One typically issues between four and 20 direct mail creative
executions a month, nearly all of which carry rate comparison tables
knocking Barclaycard and the cards of other high street banks.
More than 99 per cent of Bank One’s mailings aim to attract new
customers - against a sector average of 75 per cent - reflecting the
company’s relatively late arrival in a crowded market.
Compared with its rivals, Bank One is aiming its advertising at an older
target market. For example, 57 per cent of its direct mail goes out to
the over-45s, while 46 per cent of MBNA’s direct mail targets this
particular age group.
Bank One’s direct mail spend has decreased recently in relation to that
of its key competitors, with spend in the third quarter of this year
almost half that of the first quarter. This has caused a drop in its
household hit rate, with households receiving an average 1.65 mailings
from Bank One during the period, compared with 2.18 from MBNA and 4.5
from the sector as a whole. This fall either indicates that the bank has
attracted sufficient numbers of profitable new cardholders to allow it
to curb its spend, or that it is finding it harder than anticipated to
win market share from its rivals.
Looking briefly at press advertising, Bank One’s spend (pounds 444,988
for January to September) focused mainly on the mid-market dailies and
quality weekend press. It also advertised its affinity cards in
publications such as Rugby World and Rugby News.
Bank One is in the UK market for the long term. The world’s
second-biggest credit card company has European ambitions to which
success in the UK is a key stepping stone. Bank One is also preparing to
launch a British version of its US internet-only bank - wingspanbank.com
- which will compete directly with Egg and the other online banks.
Research by Media Monitoring Services, tel: 01344-627553.