JPMorgan Chase Buys Bloomspot to Expand Card Marketing

JPMorgan Chase & Co, one of the biggest card issuers and transaction processors, said it has bought Silicon Valley firm Bloomspot Inc to expand its consumer marketing programs for merchants.

The deal, terms of which were not disclosed, will let the bank deliver a range of targeted advertisements, coupons and other discounts to cardholders on behalf of stores that are also customers of the bank, said Jeff Kinder, president of Chase Offers.

Chase may deliver the ads on its customer websites and use systems to deduct personalized discounts when customers pay merchants with their cards. Chase.com ranks among the 30-most visited websites, Kinder said.

Other financial companies with card businesses, such as Bank of America Corp and American Express Co, have also added digital tools as the industry builds on a marketing history that goes back to stuffing promotions into envelopes with monthly bills to customers.

Chase expects the new tools to bring in revenue by encouraging customers to make card purchases, for which it receives processing fees, and by being paid by merchants for marketing services, Kinder said.

Gerard du Toit, a banking industry consultant at Bain & Co, said big card companies can win loyalty from consumers if they make it easier to use discounts, and attract additional business from merchants if they make come-ons more successful.

The specter of coupon companies, such as Groupon Inc , trying to develop successful business models has also spurred the banks to act.

"The ultimate place they are all trying to go is location-based offers" tied to how close customers are to stores, du Toit said. "If the banks don't get there, some start-up will."