MEDIA ANALYSIS: BRAND SPEND ANALYSIS - The UK is Bank One’s key stepping stone in its bid for European expansion

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.

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

year.



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.

www.mediamonitoring.com.