At Cardlytics, we believe in making commerce more rewarding for everyone. We’ve created a unique platform where everyone benefits – our brand advertisers, our financial institution partners, and consumers – and finds meaningful value in card-linked offers and cash back rewards. 

We continue to strengthen and build on our extensive network, welcoming new financial institution partners and brand advertisers with a shared mission of bringing more value to consumers. We’re delighted to launch our newest partnership with American Express, whose proprietary owned digital advertising platform, Amex Offers, continues to transform to meet the demands of a dynamic retail environment and bring value to Amex Card Members and merchant advertisers. Together, we're working to scale the number of card-linked offers on the platform, helping more advertisers market to Amex Card Members and providing Card Members with access to more value through cash back rewards via the personalized digital experience they already know.

We look forward to ramping up our partnership in the coming months and delivering relevant and personalized offers to Amex Card Members at scale.

Executive Summary

• Advertisers have increasingly used MMMs to better analyze the performance of their marketing efforts across channels, but continue to face some challenges with data.
• Measurement of card-linked offer (CLO) programs have also historically posed a challenge to MMMs.
• Cardlytics is working with leading marketing measurement experts to develop best practices for integrating Cardlytics campaign data into media mix models, helping our advertisers more accurately measure incremental impact of Cardlytics campaigns and the rest of their marketing program.

‍Media Mix Models and card-linked offers

For brand advertisers to truly understand and analyze the performance of their marketing efforts, measurement plays an essential role. Since it is not enough to analyze the performance of a single channel in isolation, advertisers lean on Media Mix Modeling (MMM) solutions to better understand the full picture of their marketing efforts, which channels are impacting their overall spend, and how to determine future budget allocation. MMMs have been especially beneficial for marketing analysis and reporting, marketing budget optimization, scenario planning, and performance tracking – but advertisers continue to face challenges with data quality, invalid or incomplete data inputs, and accounting for broader shifts in market economics. 

Measuring the effectiveness of card-linked offer (CLO) programs, such as Cardlytics’ platform, have historically posed a challenge to MMMs. Because our platform shows digital ads within the walled environment of digital banking channels and measures performance through card-linked data from our banking partners, it has been difficult for advertisers to get an accurate view of CLO performance. 

‍Integrating Cardlytics data with MMMs 

To help our advertisers address these challenges with CLO measurement, we are excited to announce that Cardlytics will be working with leading MMMs, including Analytic Partners and Ipsos MMA. By integrating Cardlytics data into these models, we are able to help our advertisers, modelers and analysts better understand the unique value of our platform as part of the overall marketing mix. 

Through a tailored training program with each MMM, we are working together to ensure that:

• Cardlytics data is properly incorporated into their models 
• Modelers understand how Cardlytics and card-linked offers work, and how CLO campaigns are measured 
• Data is interpreted appropriately and modelers are equipped with best practices for potential enhancements to their models (e.g., elevating lower-funnel metrics such as clicks and redemptions, rather than just ad impressions) 

In addition to integrating into MMMs, Cardlytics continues to invest in our own Test vs. Control solution to demonstrate the incremental benefits of our platform.

‍Considerations for enhancing measurement 

It’s important for advertisers to keep the following considerations in mind when thinking about CLO measurement with MMMs:

• Pay-for-performance advertising means that model relationships seen in other digital channels may not exist. Some models are better for upper-funnel media channels, which may not be appropriate for measuring the effectiveness of CLO campaigns.
• Our adstock and ability to provide campaign-level detail are unique, and provide full funnel visibility for deterministic customers, from impression to engagement to purchase. 
• Supplementing with customer-level metrics (e.g., Cardlytics’ Test vs. Control analysis) can provide a more comprehensive picture of campaign effectiveness. 

If you are interested in learning more or already partner with an MMM, reach out to your Cardlytics Account Manager or email mmm@cardlytics.com to discuss how we can help ensure your CLO program is being measured properly.

Redefining Customer Loyalty

Introduction

Brands of all sizes know that engaging loyal customers is critical to their business, but how do they know which customers are loyal? Most marketers use first party transaction data to assess how often their customers are shopping or how much they are spending in order to define who their loyal customers are. This approach can lead to an inaccurate view of loyalty because it overlooks whether these customers are spending with competing brands.

Cardlytics has access to $4.7Tn in omni-channel annual card spend, powered by the largest financial institutions in the United States. We have sampled this rich dataset to provide a full-category view of spend that sheds insight on what it really means to be brand-loyal, and how marketers can redefine audiences to make informed, strategic decisions.

Read on to explore the full report (or download it here) and reach out today to get a custom brand-level view of your business’ loyal customers in relation to the category.‍

‍Key Takeaways from the Report

Significant potential exists to grow revenue by boosting customer loyalty and increasing their share of wallet.

• 10% of customers are loyal, spending 62% of their budget with the merchant.
• 90% are not loyal, spending only 9% of their budget with the merchant.
• Brands could benefit from 6.9x customer spend by focusing on the 90% of non-loyal customers

Transaction frequency doesn't equate to loyalty.

• Only 50% of a merchant's top shoppers are loyal.
• 48% of a merchant's top shoppers spend 79% of their budget with competitors.

Customer Loyalty & Share of Wallet

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‍Defining Customer Loyalty

‍Cardlytics defines customer loyalty based on a consumer’s preference for a merchant relative to the competition. In this report, we’ve sampled $160Bn of spend across six large categories to determine what percentage of a merchant’s customers are loyal and how much are those customers spending with the competition as compared to customers that are not loyal.

On average, 10% of a merchant’s customers are loyal (ranging from 5-13% depending on the category). Conversely, 90% of a merchant’s customers are not loyal, on average.

These loyal customers have a share of wallet of 62% (meaning 62% of their category spend is with the merchant). Not loyal customers have a share of wallet of only 9%.

¹ Cardlytics applies the principles of the Wallet Allocation Rule to rank existing customers (that spent during the prior and current periods) based on their share of wallet (which is the percentage of a customer’s total spending in a category that goes to a particular merchant) to assess clear first choice based on the relative rank of that merchant. Full methodology included at the end of this report.

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Top Customer Loyalty & Share of Wallet

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Are Frequent Shoppers Loyal?

‍In the absence of competitive spend data, Marketers leverage transaction frequency to define loyalty (e.g., “the customers who shop the most frequently are my loyal customers”). Cardlytics isolated the top customers (most frequent purchasers), by merchant, to assess whether this is an appropriate proxy for loyalty. For this group of top customers, we analyzed what percentage of them are loyal (have a clear first choice for the merchant) and how much are they spending with the competition.

On average, only 52% of a merchant’s top customers are loyal (with a clear first choice for the brand). In other words, roughly half of a brand’s top (most frequent) customers prefer to shop at competitive brands.

While the top customers that are loyal have a share of wallet of 60%, the remaining top-customers have a share of wallet of only 21%, meaning 79% of their spend goes to competitors.

¹ Cardlytics used a 12 month measurement period for Apparel and Big Box (08/01/23 to 07/31/24) and a 6 month period for all other categories (01/31/24 to 07/31/24) when isolating the top-10% most frequent shoppers. Cardlytics measured the share of wallet ranking for all of these top customers with spend in this period (regardless of whether they were newly acquired by the brand in the period or if they were existing shoppers from the prior period).

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What do these insights mean for you?

Supplementing first party transaction data with category-level spending behavior is essential to understanding and defining which customers are loyal (and which customers are not), thereby enabling more informed marketing strategies that deliver growth.

Reach out to Cardlytics to get a custom brand-level view of your business’ loyal customers in relation to the category. For more information, please submit a request.
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About Cardlytics

Cardlytics is the world's largest bank rewards network, powering offers for more than 20 of the top bank partners globally, including the world’s largest retail brands, representing $4.7T in consumer spend. Cardlytics helps brands determine what loyalty really looks like across their customer base to identify headroom for growth, reach customers deterministically, and drive conversions.

1. Loyal customers are existing customers of a merchant with a clear first choice for that merchant (relative to the category), as evidenced by their share of wallet ranking (note: existing customers are those with spend in the current and prior periods⁴).

2. Includes customers that have spent with a merchant but were either newly acquired or lapsed in the current period⁴, evenly split their category spend between multiple merchants, and/or have a clear preference for competitors.

3. Includes the top-10% of a merchant’s customers based on the number of transactions at the merchant in the trailing 6-12 month period

4. Current period for Apparel and Big Box is 08/01/23 to 07/31/24; current period for all other categories is 01/31/24 to 07/31/24