As a boy I spent a week or two every summer in rural Utah on my Grandpa’s farm. Although I spent the appropriate amount of time chasing frogs and salamanders, exploring in the pastures, and swimming in the pond, I also spent a lot of time sitting on the fender of my Grandpa’s tractor plowing fields, bailing hay, and otherwise “waking up with the chickens” to be with him as he worked the farm. In fact, my first driving experience was as a 12-year-old on a tractor in front of a hay wagon while Grandpa’s neighbors helped him throw and stack the bales of alfalfa on the trailer.
We’d be in the barn milking cows at first light, be in the fields until dinner (I always called it lunch) and have supper when the sun went down. Advertisers need to make hay while the sun shines too. They just might not describe it the same way my Grandpa did when he was waking me up so I could follow him out to the barn.
“You gotta make hay while the sun shines,” he would say.
Most card providers don’t get the seasonal nature of advertising
Like many businesses, online merchants experience ebbs and flows in their businesses. Some are more seasonal than others, but as you might expect, Black Friday, Cyber Monday, the Christmas holiday season, and other holidays are when these brands tend to amp up their ad spend to, “...make hay while the sun shines.”
Although most traditional credit card providers understand that businesses are cyclical (or seasonal), they don’t really get what that means to an advertiser and might interpret the fluctuations of additional ad spend as “suspicious” and decline a card being used to pay for ads on one of the digital networks like Google or Facebook.
It doesn't really matter if a card provider mistakes a seasonal ramp in ad spend as suspicious or declines a card because of a missed payment, the result is the same. It's not uncommon for ad networks to shut everything down when a card is declined, basically throttling a business’ ability to capitalize on a busy time of year or even just a busy weekend.
Advertisers need a card provider that understands advertising and advertising seasonality.
What should you look for in a purpose-built card for advertising?
I think it’s pretty safe to suggest that the credit card needs of a digital advertiser spending $10,000, $100,000, or even a million or more dollars a day on digital networks like Google have different credit card needs than the average small business owner making travel arrangements or purchasing inventory.
The volume and dollar amount of cardable transactions is very different, and the spending limit needed to pay for daily ad spend is too, so finding a provider that has an understanding of what advertisers need; and doesn’t make it more difficult for a merchant to periodically, and maybe significantly, increase the amount of ad spend is pretty important.
Here are three questions to consider when shopping for a purpose-built card to meet advertising needs:
Is the anticipated daily, weekly, or monthly ad spend factored into the spending limit discussion? Most credit card providers set arbitrary-feeling spending limits based on a merchant’s credit profile and a monthly statement cycle, but there are other factors to evaluate for a credit card specifically designed to tackle ad spend. A business owner with a strong credit profile might qualify for a $250,000 spending limit at a major bank, but if you’re spending $100,000 a day in digital advertising, that card isn’t going to work. These other factors need to be considered when choosing a credit card to complement your advertising objectives.
Does the credit limit review cycle offer seasonal flexibility? The seasonality of eCommerce merchants doing a lot of online advertising requires a more flexible approach to how spending limits are calculated, along with an individualized statement cycle rather than credit limits based on the calendar month. 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 could be a better option. For example, if it takes the average transaction cycle five days to go from click to conversion to cash, a customizable statement cycle (ready shorter) might make more sense and could facilitate a more appropriate spending limit.
Does the card provider accommodate leveraging virtual cards at the product level? Most card providers that offer virtual cards do so to control costs, but many brands leverage multiple credit cards for each product line to optimize network algorithms at the product level. 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.
Traditional credit card providers and large banks don’t think in these terms. The card a business uses to book a flight or a hotel room doesn’t require the same approach 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 just one of them, a more relevant statement cycle is another.
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 that require a surge in spend.
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.
