Cardlytics: Barriers to Advertiser Adoption

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“Closed loop measurement is considered the gold standard of measurement in advertising and media. It is very hard to do and few players can do it, but it is the single best way to measure the efficacy of advertising and promotion." - Former President at Cardlytics

Cardlytics (CDLX) is a platform that connects advertisers, financial institutions, and consumers through cash-back rewards inside a banking app. This is possible because the company has direct integrations with banks to get real-time access to customer purchase activity. The potential to leverage purchasing data for personalised offers at specific times and locations piqued our interest in the company.

Cardlytics allows marketers to reach specific customers and precisely measure the return on ad spend (ROAS). We interviewed a Former President of Cardlytics, who ran the advertiser side of the business, to better understand the opportunity for CDLX.

In the long run, we believe the majority of marketing will be personalised and there is no better way to target customers than by knowing their spending habits. Cardlytics offers marketers access to the anonymised purchase data of ~170m banking customers. Advertisers can target customers with cash-back offers within the banking app in a safe, fraud and bot-free advertising channel. Because CDLX has a real-time purchase data feed from their financial institution (FI) partners, CDLX can measure the return on the cash-back offer with actual sales data of the customer. This enables Cardlytics to use the ‘closed-loop measurement’ method:

"Think about the gold standard of efficacy in the pharmaceutical world. When a new drug is being tested, they use a double-blind test giving the drug to a group of people. Another group of people get a placebo, and nobody knows who is getting what, other than the people running the test. They compare the results between the two and, in essence, closed loop measurement does something similar to that. Cardlytics would typically run a campaign and 10 million people would see the offer, but several hundred thousand people – that were just like the people who saw the offer – were not served the offer. Over the course of the campaign, you can look at how the purchase behavior differs between these two groups."
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