Traditional credit cards aren’t a good fit for online advertising for a number of reasons.
They way they determine spending limits is based on a credit model that just doesn’t work for advertisers
Entrenched systems don't accommodate the seasonal increases, or fluctuations, in spending required by advertisers
Traditional credit card providers unwittingly make it difficult for advertisers with multiple ad accounts to profitably participate in the ad auctions
Many banks and credit card providers don’t understand the detrimental effects of declining a card in the middle of a successful campaign. Online advertisers need more flexibility to scale advertising spend during peak season and traditional credit cards can’t accommodate that. When card failure happens platforms like Google and Facebook often demote, re-price, ban, and may even freeze merchant ad accounts that experience multiple card declines.
Matt Mcallister, CEO of Flavored PB Co, describes the aftermath of a card failure his company experienced during the middle of a profitable campaign.
“Luckily it wasn’t the weekend,” says Mcallister. “It did take two or three days to get our ads up and running again—which probably cost us about $4,500. A pretty significant chunk of our monthly ad budget. Basically, I had the wrong card. The cash back they were offering just didn’t matter because what I lost in those few days ate up about half of it.”
“A credit card that limits your ability to scale is a real hassle,” he continues. “Why not take that headache off your plate. Spend your time running the business instead of worrying about keeping the credit card you use for ad spend paid down.”
Why a purpose-built credit card for advertising makes sense
Facebook, and other algorithm-based platforms, use data (with algorithms weighted for the most recent data). In the middle of a campaign when a payment fails the algorithm stops. Even if you’re able to turn it back on and rejoin the auction, it won’t continue the same way it did before you got booted.
Card failure is a challenge for eCommerce brands that are trying to successfully allocate capital to dozens of different ad accounts, and it’s not caused exclusively by the card providers or the card users. “There are a lot of policy issues,” says James Van Elswyk, of Purple Leads. “Poor A.I., platforms like Facebook are too big to fail … and they all have compliance issues. It’s not the fault of advertisers—it’s just glitches in their systems.”
Banks and traditional credit card providers don’t understand what advertisers require in a credit card and unwittingly make it difficult for brands to successfully advertise online.
“The way most credit cards work just doesn’t meet the needs of digital advertisers,” said Jim Crimella, of online retailer ShineOn. “If I paid my balance on Monday it would take until Wednesday for my payment to post. In other words, I didn’t have the ability to spend on that card until Thursday morning so I went two days before I could use that card again, even though I was paying off my balance every single day.”
This isn’t a surprise to anyone trying to use a credit card to pay for ad expenses, even a premium card like Chase Ink Preferred or AMEX Gold. Many advertisers have to get creative and leverage multiple credit cards just to keep their ads running.
“It took four cards, at $250,000 each (Bank of America’s highest spending limit), to reach the million dollar credit line I needed to keep campaigns active through the month,” said Steward Wagner of Lift Foils. “I would use a card up to $250 K and then that particular card would become dead to me until the payment cycle was completed. I’d go through each card like that until the end of the month. It worked pretty well until last year when even that wasn’t enough.”
What does a purpose-built advertising card look like?
The card a business uses to book a flight or a hotel room doesn’t have the same requirements as a purpose-built card for advertising. Such a card needs to offer:
Multiple paths to approval/appropriate spending limits: They need to look beyond your credit profile and consider a number of other factors into a full credit review—your anticipated ad spend is a very important part of that.
Consider a customizable repayment schedule and look beyond a monthly payment cycle to make more capital available to advertisers.
An understanding of the unique needs of digital advertisers: A credit card provider that understands the advertising business will help you spend more during seasonal opportunities with spending limits designed to maximize revenue-producing opportunities during those busy times of the year.
Competitive cash back: A card provider that is able to offer more than the typical 1% to 1-½% cash back on spend is optimal.
If you’re interested in learning how dash.fi can help your business optimize digital ad spend with the world’s first card designed for advertisers, visit www.dash.fi to schedule a demo.
