Banks need new revenue streams. Retailers (and other businesses operating with razor-thin margins) need to fine-tune their go-to-market strategies and gain higher returns on marketing and advertising spend.
To that end, J.P. Morgan Chase’s launch of its media platform signals the value of transaction-level data in crafting targeted offers, Banyan CEO Jehan Luth said. And you can expect to see more of them.
The banking giant announced April 3 the debut of its retail media network, Chase Media Solutions, as it moves toward personalized advertising within the banking sector. In terms of functionality, the new digital media business enables advertisers to use consumer transaction data, allowing them to target Chase’s customer base of 80 million individuals with customized offers, discounts and cash back rewards tailored to their purchasing behaviors.
At a high level, the move marks a way for J.P. Morgan’s business to gain insight into end users’ preferences at a granular level and to craft targeted offerings that boost revenues and operating results.
As Luth noted in an interview with PYMNTS, “for most folks that have been in the industry, part of the announcement is not surprising.” Several banks set up offers and rewards operations by acquiring platforms in the past. (J.P. Morgan, for its part, acquired card-linked marketing platform Figg in 2022.)
But it is new, he said, to set up the personalized advertising operation and to formally call it a media business — something that, before the Chase announcement, had not been done before.
“The comfort level with a large, regulated institution that consumers trust — and that is a safe place, from an advertiser’s brand perspective, for media targeting and customer benefit rewards — well, that’s exciting to see,” Luth said.
The shift is a necessary one that is likely to be copied by other banks because all financial institutions are grappling with pressures on interchange revenues, he said. As interchange fees are capped, net interest margins may be, too, and financial institutions need to dedicate resources to crafting new revenue streams.
The banking juggernaut’s announcement also validates Banyan’s own business model, which uses item-level receipt data to help merchants and banks craft personalized solutions for the customer’s benefit, Luth said.
For the retailers — who have traditionally operated with thin margins at around 4% — reaching a customer outside the confines of everyday spend can be a tailwind to growth.
“Getting you to buy something you haven’t bought before,” he said, is a “brand safe” way of achieving profitable growth derived from price-conscious shoppers.
In the wake of the J.P. Morgan announcement, Banyan has seen a lift in inbound questions from retailers about using the new channel, he said.
“We’ve been fairly busy since the announcement was made, with retailers asking ‘How do I leverage this channel? How do I tap into this to drive bottom margin or top-line growth?’” Luth told PYMNTS, adding that “this has garnered some fairly large media presence.”
As Luth observed to PYMNTS about the J.P. Morgan announcement, “there are new ways of monetizing experiences and delivering value to the consumer. And this announcement does a bit of both.”
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