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Download the Cardlytics case study and learn how to drive engagement and spend for neobanks.

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Whether it’s saving the environment, women-focused investing, or supporting local businesses, neobanks offer something for everyone.

With hyper-focused audiences, neobanks (aka “challenger banks”) fill the dovetailing trends of lifestyle marketing and accelerated consumer adoption of online banking. One nationwide survey found that 80% of consumers nationwide now prefer online services over a visit to a physical bank location, and this preference is driving consumers towards these fintech firms.

Growth, Challenges, and Solutions

According to a PwC report, the global neobank market is expected to hit $394.6 billion by 2026, up from $18.6 billion in 2019. Despite the growth, they also face challenges similar to traditional banks like churn and digital engagement and unique hurdles such as fewer products and lack of in-person services. 

By offering a card-linked cash back program, neobanks gain a partner that can address these challenges while providing innovative solutions to attract and retain customers with frictionless purchases from beloved brands.

How Do Cash Back Rewards Drive Engagement?

Cash back rewards programs engage with neobanks’ most enthusiastic customers: millennials and Gen Zers. A Cardlytics survey showed that these cohorts gravitate towards a more modern shopping experience with hassle-free rewards. Add to that the lifestyle or mission-focused component of many neobanks, and it becomes a winning combination. Niche customers such as millennials, micro, small and medium enterprises (MSMEs), and those having sporadic incomes and earnings embrace innovative technologies, especially cash back rewards that put money back into their wallets to use as they choose.

Neobanks are digital only, which adds to their appeal but also removes in-person opportunities to create stronger relationships with customers. To help minimize customer churn, they can offer products that promote customer loyalty while encouraging in-person purchases. Card-linked cash back rewards programs allow neobanks to create collections of retail brands that their customers love. About 75% of consumers say they favor companies that offer rewards. Despite being online, providing customers with an in-store experience through retailers is essential to long-term success. 

Cardlytics Can Help Neobanks Better Serve Their Customers

Cardlytics’ SDK platform is highly customizable and uses behavioral analytics to drive personalized offers and to increase purchases. Financial institution partners see a 5.6x increase of average transactions per month from previously lapsed cardholders and a 200% increase in spend and transaction frequency from cardholders who previously transacted less than once a week. When multiplied by the number of neobank customers, a cash back rewards program can also become an additional driver of revenue.

The uptick in adoption of online banking has added urgency for neobanks to differentiate in the marketplace. Cash back programs are a streamlined, rewarding way for them to connect to customers while generating revenue. And with a leading digital marketing partner like Cardlytics, neobanks can quickly put money back into their customers’ pockets while strengthening their customer relationships.

Covid precautions and the uncertainty it brings has led to a staycation boom in the UK. From Cardlytics’ UK office, The Summer of Spend report investigates consumer trends in response travel restrictions and offers advice on how brands across the travel, leisure and hospitality sectors can maximize spend opportunities and appeal to new customers.

Download the full report and to read more about the UK's biggest, and most competitive, ‘staycation summer’ in recent years.

UK-State-of-Spend_Summer-2021Download

Cardlytics adds Zolve to growing neobank roster.

We like to say Cardlytics is “built by bankers for banks” and it’s true. Our founders were both bankers who saw the value in having a view of a customer’s total wallet. Since Cardlytics was founded 13 years ago, we’ve been driving results for major U.S. banks. And while banks will always be central to what we do, we are excited about scaling our offering. Enter: the neobanks.

Zolve: A solution for an underserved population 

Catering towards tech-savvy audiences, neobanks make managing finances easy from anywhere in the world. Zolve, in particular, aims to improve accessibility to high-quality banking products for immigrants in the U.S. Zolve’s founder, Rahgunadan G, noticed that many immigrants were forced to wait for months, and in many cases, years to access financial services upon arriving in the U.S. While neobanks may focus on a specific type of customer, the customers' needs remain universal: quality products, secure services and a rewarding experience.

“At Zolve, we are working to provide equitable access to global financial products on one single platform. A tangible rewards program helps create an engaging experience for our customers, and with this partnership, we now have offers across categories that our users find relevant and rewarding” says Raghunandan G, Zolve’s founder. 

A rewarding experience for all 

When it comes to capturing and maintaining consumer loyalty and personalized experiences, neobanks are well-positioned to grab top of wallet advantage through a rewards program.  Neobanks and fintechs have changed the financial landscape over the past decade, offering digital-only solutions to the traditional financial process, while also addressing the needs of their niche audiences. This rise in popularity coincides with a consumer base that prefers shopping and banking online. 

To learn more about how Cardlytics works with neobanks and fintechs, check out our case study.

Atlanta, GA – July 20, 2021 – Cardlytics, Inc., (NASDAQ: CDLX), one of the largest digital advertising platforms, today announced that its second quarter ended June 30, 2021 financial results will be released on Tuesday, August 3, 2021, after market close. The company will host a conference call and webcast at 5:00 PM (ET) / 2:00 PM (PT) to discuss the company’s financial results.

A live audio webcast of the event will be available on the Cardlytics Investor Relations website at http://ir.cardlytics.com/.

A live dial-in will be available at (866) 385-4179 (domestic) or (210) 874-7775 (international).  The conference ID number is 3993796. Shortly after the conclusion of the call, a replay of this conference call will be available through 8:00 PM ET on August 10, 2021 at (855) 859-2056 (domestic) or (404) 537-3406 (international).  The replay passcode is 3993796. 

About Cardlytics

Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their rewards programs that promote customer loyalty and deepen relationships. In turn, we have a secure view into where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Headquartered in Atlanta, Cardlytics has offices in London, New York, Los Angeles, San Francisco, Austin, and Visakhapatnam. In March 2021, Cardlytics acquired Dosh, a transaction-based advertising platform. In May 2021, Cardlytics acquired Bridg, a customer data platform. Learn more at www.cardlytics.com.

Atlanta, GA – August 3, 2021 – Cardlytics, Inc. (NASDAQ: CDLX), a digital advertising platform, today announced financial results for the second quarter ended June 30, 2021. Supplemental information is available on the Investor Relations section of the Cardlytics' website at http://ir.cardlytics.com/.

“While we grew Cardlytics platform billings 111% and adjusted contribution 123% year-over-year, we fell below our guidance.  This was driven by us forecasting a faster recovery than was realized due to labor shortage and supply chain challenges in retail, restaurant and travel,” said Lynne Laube, CEO & Co-Founder of Cardlytics. “Our core business remains on a very solid foundation and we continue to make significant progress on all of our strategic initiatives, including the integration of Dosh and Bridg.”

“We believe we will still be dealing with an uneven recovery in Q3 as each industry we operate in is still working through unique macroeconomic challenges,” said Andy Christiansen, CFO of Cardlytics. “We remain very excited about the long-term potential of Cardlytics and continue to make immense progress on our product and technology initiatives.”

Second Quarter 2021 Financial Results

• Revenue was $58.9 million, an increase of 109% year-over-year, compared to $28.2 million in the second quarter of 2020.
• Billings, a non-GAAP metric, was $85.3 million, an increase of 116% year-over-year, compared to $39.5 million in the second quarter of 2020.
• Gross profit was $23.2 million, an increase of 193% year-over-year, compared to $7.9 million in the second quarter of 2020.
• Adjusted contribution, a non-GAAP metric, was $29.6 million, an increase of 139% year-over-year, compared to $12.4 million in the second quarter of 2020.
• Net loss attributable to common stockholders was $(47.3) million, or $(1.43) per diluted share, based on 33.0 million weighted-average common shares outstanding, compared to a net loss attributable to common stockholders of $(19.8) million, or $(0.73) per diluted share, based on 27.1 million weighted-average common shares outstanding in the second quarter of 2020.
• Non-GAAP net loss was $(12.8) million, or $(0.39) per diluted share, based on 33.0 million weighted-average common shares outstanding, compared to a non-GAAP net loss of $(10.2) million, or $(0.38) per diluted share, based on 27.1 million weighted-average common shares outstanding in the second quarter of 2020.
• Adjusted EBITDA, a non-GAAP metric, was a loss of $(5.7) million compared to a loss of $(7.7) million in the second quarter of 2020.

Key Metrics

• Cardlytics MAUs were 167.6 million, an increase of 7%, compared to 157.2 million in the second quarter of 2020.
• Cardlytics ARPU was $0.34, an increase of 89%, compared to $0.18 in the second quarter of 2020.
• Bridg ARR was $12.5 million in the second quarter of 2021.

Definitions of MAUs, ARPU and ARR are included below under the caption “Non-GAAP Measures and Other Performance Metrics.”

Third Quarter 2021 Financial Expectations

Cardlytics anticipates billings, revenue, and adjusted contribution to be in the following ranges (in millions):

 Q3 2021 GuidanceBillings⁽¹⁾ $85.0 - $95.0Revenue $57.0 - $66.0Adjusted contribution⁽²⁾$27.0 - $32.0

• A reconciliation of billings to GAAP revenue on a forward-looking basis is presented below under the heading "Reconciliation of Forecasted GAAP Revenue to Billings."
• A reconciliation of adjusted contribution to GAAP gross profit on a forward-looking basis is not available without unreasonable efforts due to the high variability, complexity and low visibility with respect to the items excluded from this non-GAAP measure.

Earnings Teleconference Information

Cardlytics will discuss its second quarter 2021 financial results during a teleconference today, August 3, 2021, at 5:00 PM ET / 2:00 PM PT. The conference call can be accessed at (866) 385-4179 (domestic) or (210) 874-7775 (international), conference ID# 3993796. A replay of the conference call will be available through 8:00 PM ET / 5:00 PM PT on August 10, 2021 at (855) 859-2056 (domestic) or (404) 537-3406 (international). The replay passcode is 3993796. The call will also be broadcast simultaneously at http://ir.cardlytics.com/. Following the completion of the call, a recorded replay of the webcast will be available on Cardlytics’ website.

About Cardlytics

Cardlytics (NASDAQ: CDLX) is a digital advertising platform. We partner with financial institutions to run their banking rewards programs that promote customer loyalty and deepen banking relationships. In turn, we have a secure view into where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Headquartered in Atlanta, we have offices in London, New York, San Francisco, Austin and Visakhapatnam. In March 2021, we acquired Dosh, a transaction-based advertising platform, and in May 2021 we acquired Bridg, a customer data platform. Learn more at www.cardlytics.com.

In his latest piece for Forbes.com, Dosh Founder and CEO Ryan Wuerch discusses how COVID-19 has boosted interest in cash back, and the psychology behind it. Click HERE to read the full article.

The Center for Generational Kinetics reveals in this groundbreaking research the robust links between younger generations (Millennials, and Gen Z), cash back incentives, digital marketing strategies, and frictionless transactions that are becoming Trend Drivers.

Download PDF Version

Shopping habits have changed over the last several years in a way that no one could have imagined. As a result, customers are now looking to foster deeper relationships with brands, assuming they can offer convenience and seamless customer experiences. In turn, brands want to find better ways to connect with their audiences and provide superior value. That’s where card-linked marketing comes in. Card-linked marketing uses past purchase data to create targeted, relevant advertising that is presented through the consumer’s mobile and online banking application. It’s become so popular that in a recent survey by the Digital Commerce Alliance, 35% of respondents indicated that their card-linking programs grew by more than 100% in the last 12 months. 

In the past, retailers used to lean heavily on the use of printed coupons to drive short-term sales. Then card-linked marketing emerged. Card-linked offers are rewards that consumers automatically receive just by linking their debit or credit cards to an app, website or loyalty program. This approach offers impressive benefits, including being easy to track, cost-effective and backed by actual purchase data, which makes offers more relevant. Customers are also required to opt-in, so there are fewer privacy concerns. Let’s take a look at what card-linked offers are, how they work and what the benefits are.

What are card-linked offers, and how do they work?

Card-linked offers are digital offers from brands and retailers linked directly to a payment provider like a debit or credit card. Then the offer is redeemed by the consumer when the linked payment card is used at the point of sale.

The process essentially works like this:

Retailers and merchants create an offer like cash back rewards or a statement credit. Then, consumers discover offers on websites and apps that they frequent. From there, the consumer links their debit and credit cards to the website or app to earn card-based rewards. And, when the consumer pays with the linked card, they are immediately rewarded.

Some card-linked marketing channels include bank websites, mobile banking apps, airline emails, and browser apps that display card-linked offers anywhere consumers shop and search online. One example is Shell Fuel Rewards, where customers automatically earn a 5-cents-per-gallon discount on enrollment. Then they can use linked cards at participating dining locations to receive a 10-cents-per-gallon discount for every $50 spent as well as earn a 5-cents-per-gallon discount on every $50 spent through the Fuel Rewards Network online mall.

Advantages of card-linked offer programs

Given its many benefits, card-linked loyalty can be a huge competitive advantage for advertisers/brands. Unlike paper coupons or online promo codes, card-linked offers are frictionless— removing unnecessary steps at the point of sale. Card-linked offers also allow brands to understand consumer behavior better than ever by allowing access to detailed consumer purchase data and analytics. With traditional digital marketing efforts, brands pay for clicks or impressions without being able to track sales or in-store visits. With card-linked offers, advertisers can see the direct impact of their investment because every dollar is directly attributable to a sale. And the best part—these offers are purely paid for based on performance. Merchants and retailers don’t need to pay for the offer until after the qualifying sales occur, which allows for an overall higher return on marketing dollars.

From the consumer’s perspective, card-linked offers are relevant and personalized. They are also easy to redeem because users automatically earn discounts or cash back rewards without digging around for a promo code or coupon. Card-linked offers also use strict privacy protection, which gives users peace of mind. In addition, these offers are most often in the form of cashback rewards which literally puts dollars back in people's wallets. This benefit can be a motivating factor during challenging economic times when consumers tend to become increasingly cost-conscious. Another advantage is that there is something for every consumer. In addition to cash back, merchants can offer deals on a variety of everyday purchases, from travel perks to dining rewards.

Card-linked offers as part of an omnichannel strategy

An omnichannel strategy provides customers with a fully integrated shopping experience that unites user experiences across multiple touchpoints. The goal is to provide a seamless experience where your content and actions transfer from platform to platform. That way, no matter how or where a customer interacts, the shopping experience is the same. That’s why more merchants and retailers are adopting card-linked offers to connect online offers with in-store purchases. In addition, with card-linked loyalty, no transaction can be missed, which increases omnichannel engagement. As a result, card-linked offers are quickly growing in popularity. In fact, they are so popular that The Digital Commerce Alliance survey showed card-linked programs topping the list of the most preferred marketing channels—even surpassing social media for the top spot.

Card-linked offers as cookieless marketing

Another advantage to card-linked offers is that they are a solution for precision targeting that doesn’t rely on third-party cookies. Because of consumers' growing demand for privacy, Safari and Firefox have already disabled third-party cookies. And Google Chrome, which represents close to half of the U.S. browser market share, will stop using them by the end of 2024. Given that Epsilon research estimates that about 80% of advertisers depend on third-party cookies, it’s time to find a new way to reach customers and prospects online. By leaning into first-party data, you can minimize the impact of a world without third-party cookies. Card-linked marketing uses actual transactional data and purchase history, which is more accurate than cookie-based measurement. In addition, consumers have much greater privacy on their devices without third-party cookies.

Using card-linked offers to power loyalty programs

Retaining existing customers while attracting new ones is becoming increasingly difficult. Fortunately, card-linked offers provide many advantages for retailers and merchants. For one thing, customers don’t need a separate loyalty card. Instead, they are identified by their card transaction, which also saves on the cost of loyalty card production and replacement. Card-linked offers are also incredibly flexible. Rewards can be automatically applied to the customer’s card, with the total value of their loyalty tracked over time. And they’re versatile enough to be used as part of any industry’s loyalty program. That’s because the process results in a frictionless customer experience while giving merchants granular insight into transactional data and shopping behaviors. With this understanding of the customer, it’s possible to enable highly targeted and personalized communications. As a result, brands have an opportunity to create even stronger loyalty and engagement in the future.

How to measure success with card-linked offers

Detailed reporting makes it very easy to measure the success of card-linked offers. For example, card-linked offers are proven to increase the number of transactions. According to the 2018 Cardlinx survey, 62% of brands that use card-linked offers saw transaction volume more than double over the past year. And with card-linked offers, merchants can track customer behavior easily by seeing the average order size, as well as the number and frequency of purchases.

Some other valuable success metrics include:

• Number of net new customers: a measure of how many new customers are acquired compared to old customers who leave
• Number of repeat customers: number of customers who have made more than one purchase
• Repeat purchase rate: the ratio of customers who made more than one purchase over a set period compared to the overall customer base
• Average spend per customer: total transaction amount from non-subscription payments divided by the number of customers Engagement rate: how much your audience is actively engaged with content

This knowledge allows brands to incentivize customers to make repeat purchases and reward their best customers for their loyalty.

Cardlytics for card-linked marketing

https://youtu.be/Z0UNr2xhQfU

Cardlytics is not only a leading advertising and technology company, but we are also the pioneer in card-linked marketing. Through our partnerships with financial institutions like Wells Fargo, Bank of America, and PNC Bank, We see 1 in 2 purchases in the U.S., allowing us a complete view of consumer spending. This Purchase Intelligence™ is the foundation of how we target and measure all our campaigns. Our technology provides valuable insight into consumer purchase behavior for approximately 70% of U.S. households across all stores and categories. Our advertising platform helps you reach real customers at the right time when they are thinking about how and where to spend their money. With targeting based on past purchase history, ads on our platform provide real value to customers and act as the critical tipping point for a purchase.

Over the last several years, card-linking has transformed from an emerging technology showing record growth to an efficient tool that brands regularly rely on. And the proof is in the numbers. Card-linking has become a significant revenue stream for merchants worldwide. In fact, 65% of those surveyed as part of the Digital Commerce Annual Industry study reported sales of more than $1 billion attributable to card-linked offers.

Card-linked marketing will only continue to gain popularity as an independent marketing channel. That’s because, with minimal effort, brands can integrate rewards across customer touchpoints to drive sales. And as an added benefit, these offers allow advertisers to gather broad transactional data to learn about customer purchasing behavior, which they can use to create more effective marketing strategies. That means card-linked offers will help advertisers create personalized promotions that continue to draw consumers into stores and keep them coming back for more.