Even businesses that aren’t typically considered “seasonal” experience ebbs and flows throughout the year. Ecommerce brands, in addition to any seasonality they might experience in their business operations, typically experience ebbs and flows in their advertising needs too. Black Friday, Cyber Monday, the Christmas holiday season, and other holidays tend to require online brands to ramp up their ad spend to take advantage of willing customers who are considering purchases during those times.
Banks don’t understand the impact of advertising seasonality
Although bankers and credit card providers see the value in working with profitable ecommerce brands, the traditional way of dealing with business credit card clients isn’t compatible for brands that might spend their entire monthly spending limit on a busy holiday weekend. Because it’s not the way most of their customers use a credit card, the bank will interpret that seasonal increase in spending as suspicious activity and decline the charge—basically throwing the brakes on a potentially profitable holiday weekend.
Because most online brands working with algorithm-based platforms like Google, Facebook, or TikTok want to maximize their profit potential when the algorithm is in their favor, the price is right, and their customers are responding well to the ads, a well-performing ad that grinds to a halt because a credit card provider interprets doubling down as suspicious activity can negatively impact a company’s profitability for the entire year.
Advertisers don’t use credit cards the same way an average small business owner does
The average small business might have a couple of credit cards with a spending limit of $5,000 to $10,000. Some businesses have more. The most creditworthy businesses might have a spending limit of $50,000 to $100,000 on their Chase card (which is considered the maximum for most business credit cards), but even an average-sized ecommerce brand could spend a couple hundred thousand dollars in advertising in just a few days.
“The way most credit cards work just doesn’t meet the needs of digital advertisers,” says Jim Crimella, media buyer and Director of Internal Brands at ShineOn. “If I paid my balance on Monday it would take until Wednesday for my payment to post. In other words, I don’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.”
Crimella suggests that unless you’re doing over a billion dollars a year, the big banks like Bank of America just don’t care about your business. He said, “I knew their customer service people by name and where they lived—I would talk about the weather with the rep from CapitalOne while we waited on hold for the bank to manually process my card payment. None of that mattered. I still had to spend the day checking my phone every five minutes to make sure my ads were running.”
Crimella was spending roughly $50,000 a day during their busy season and a card failure could shut down his ads for days.
A bank's typical small business customer doesn’t regularly need to spend like that. And, credit card providers have a difficult time accommodating ecommerce brands that do.
What does a card built for advertisers look like?
If you are looking for a credit card to accommodate a business’ travel needs or even purchasing inventory, there are a lot of options available from providers like Chase, AMEX, and CapitalOne. Advertisers need access to a card that will accommodate a seasonal increase in spend of $10,000, $100,000, or even a million or more during a busy weekend like Black Friday Weekend.
Finding a provider that can accommodate the volume and dollar amount of cardable transactions to successfully tackle the standard terms of service the algorithm-based online platforms require is a challenge. They need a card provider that understands the advertising world, understands what is required to successfully compete, and doesn’t make it more difficult for an ecommerce brand to periodically, and maybe significantly, increase the amount of their ad spend.
Here are three things you should look for in a card designed for ad spend:
How does anticipated daily, weekly, and monthly spend get factored into spending limits? Credit card providers generally set spending limits based on a business’ credit profile and a monthly statement cycle. This works well for a typical small business, but doesn’t consider the unique needs of an ecommerce brand advertising on Google. A business with a strong credit profile might qualify for a $100,000 spending limit at a major bank, but that could be consumed by an advertiser with a daily ad budget of $100,000 or more. Other factors, like anticipated spend need to be considered when choosing a credit card to complement your advertising objectives.
Is there any spending limit flexibility during peak seasons? During a busy season, a merchant could spend as much in a weekend as they would normally spend in a month. A provider with flexible terms, a statement cycle based on your payback period, and consideration for seasonality rather than exclusive reliance on a calendar month repayment cycle is what ecommerce brands need. For example, if it takes the average transaction cycle five days to go from click to conversion to cash, a customizable statement cycle might make more sense and could facilitate a more appropriate spending limit.
Are virtual cards available to use at the product level? Most card providers that offer virtual cards do so to make controlling costs easier, but many brands leverage multiple credit cards for each product line to optimize network algorithms at the product level. In other words, they need virtual cards that allow them to ramp up spending on multiple campaigns without putting everything at risk. The problem can be that ad networks often decline cards on file with another ad account or if the card authorization data doesn’t match up perfectly with the brand (an ad agency from a different address is a good example). If a brand is running multiple ads for multiple products, a card provider that offers virtual cards for each ad account, network, agency, and product line could be very important.
Is there a card designed to accommodate the unique needs of advertisers?
Yes there is.
We understand what it means to be an entrepreneur because we are in the same boat. We get that you need a charge card that can scale with your business. We want to help you do just that.
That’s why dash.fi offers multiple ways to approach the underwriting process to help you access the limits you need to grow your business. This enables us to work with a much broader range of potential customers—from early stage businesses, businesses in growth mode, as well as mature businesses.
Along with these benefits, dash.fi offers some very competitive cashback opportunities depending on your card spend. We’d welcome the opportunity to discuss what that could mean for your business.
Here’s how it works:
Complete an application
Discuss your credit needs with one of our experts
Sign a spend agreement to determine your cash back opportunities
Contact us at www.dash.fi to learn more and start an application.