| 7 min read

Budgeting Isn’t the Only Reason for Digital Cards

As an ecommerce brand there are a lot of reasons why digital, or virtual cards, make sense. Virtual cards make it much easier to allocate budget across different cost centers and allow multiple employees to easily access the credit they need to do their jobs. For example, virtual cards make it easier for the purchasing department to make small purchases that might not require a formal purchase order.

This isn’t the only reason why an ecommerce brand might want to leverage the power of a virtual card.

Using virtual cards for advertising makes a lot of sense

It’s not really their fault. Bankers just don’t think in the same way a merchant advertising with Google, Facebook, or one of the other online platforms does. When they think of using virtual cards, they think in terms of managing budgets, maybe even limiting spend. Nevertheless, spending on virtual credit cards is expected to grow to over $1 trillion by the end of 2022 when the numbers come out. What’s more, ecommerce brands are also using virtual credit cards to make their digital ad spend more efficient.

Many online advertisers, large and small, are spending hundreds of thousands (if not millions of dollars) every month with charge cards and credit cards. Unfortunately, advertisers spending online frequently run up against the standard terms of services networks like Google, Facebook, TikTok, or Instagram require when advertising on their platforms. Sometimes those terms of service can get in the way of a successful ad campaign.

Algorithm-based platforms can be unforgiving if a card fails

Platforms like Google or Facebook are weighted for the most recent data. In other words, when a campaign stops in the middle because of a card failure (or any reason), the algorithm stops. Even if you successfully get the card replaced and get back into the ad auction, it most likely won’t continue the same way it was before. 

What’s more, you will likely pay more to rejoin the auction. In addition to that, if Facebook, for example, shuts down your ad account because of a failed credit card and you only have one payment method shared between multiple ad accounts, it will likely shut down all your ads.

As you probably know, this becomes costly when your ad isn’t running as you dispute the wrongful termination of the ad account and request a new card from your card issuer—which can take days or even weeks depending on the provider. Even more if it shuts down all your ads associated with that credit card.

How can a virtual card solve this problem?

Although a virtual card alone won’t stop card failure (that requires a card purpose built for advertisers), it can prevent a single failure from shutting down all your ad accounts when a single card failure does happen.

To try to mitigate this, many ecommerce brands set up multiple accounts for each product line to optimize network algorithms at the product level. Unfortunately, the ad networks don’t always like it if they try to use the same credit card associated with another ad account and will often decline the card based on that. What’s more, if the card authorization data doesn’t match up perfectly with the brand (company name, address, zip code, card number, etc), it can be declined. And, if the location using the card doesn’t match up to the card address—when using an agency, for example—the card can be declined.

Because many multi-product DTC (direct-to-consumer) brands regularly deal with this challenge, a virtual card for each ad account, network, agency, and product line might make a lot of sense for your ecommerce brand. 

Online brands need the flexibility to create congruence between the name, zip code, and address on file with the ad networks at the account level and the name, zip, and address with the card. For example, because it’s not uncommon for a card provider to authorize the transaction at the account level, if a merchant has multiple brands and products with multiple ad accounts, the authorization may not always match up.  Google’s and Facebook’s payment rules want to see a unique card number, name, zip and address for every ad account. If your card’s authorization doesn’t happen at the card level, so your brand can use a unique name, zip, and address for each new card, you are going to have network issues.

Virtual cards can make card authorization easier at the card level.

A purpose-built card for advertising

If you need a credit card to advertise online, you need a card provider that offers:

  1. Multiple paths to approval with appropriate spending limits: They need to look beyond your credit profile and consider a number data points for a full credit limit review—your anticipated ad spend is one of those factors.

  2. The ability to scale spend: To scale revenue usually advertisers need to scale spend. In other words, you may want to throw more ad dollars at a campaign performing well. Your card provider needs to facilitate that, not throw up roadblocks to stop it.

  3. An understanding of the unique needs of digital advertisers: A credit card provider that understands the advertising business will help you capitalize on seasonal opportunities with spending limits designed to maximize revenue-producing opportunities during those busy times of the year.

  4. Competitive cash back: A card provider that is able to offer more than the typical 1% to 1-½% cash back without caps 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.

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