Bloomberg News

AmEx Mines Facebook ‘Likes’ to Connect Merchants, Customers

July 19, 2011

(Updates with Groupon, Google in the fifth paragraph.)

July 19 (Bloomberg) -- American Express Co., the biggest credit-card issuer by purchases, said it will deliver customized discounts and offers to cardholders who allow it to mine their Facebook relationships, online interests and “likes.”

“We’re running algorithms to serve you up offers that are relevant based on your likes, your preferences and your friends,” Edward Gilligan, vice chairman of New York-based AmEx, said in an interview yesterday.

Through the new “Link, Like, Love” application on the American Express Facebook page, customers can link card accounts to their own pages. Cardholders’ Facebook use and circle of online friends -- what Palo Alto, California-based Facebook Inc. calls a user’s “social graph” -- will be used to personalize merchant deals, entertainment offers and other perks.

AmEx, led by Chairman and Chief Executive Officer Kenneth I. Chenault, 60, has ramped up its use of social networking and hired executives with backgrounds in technology as the firm girds to compete for online and mobile payments with rivals including Visa Inc. and EBay Inc.’s PayPal. Last year, the firm hired Daniel Schulman, a former Sprint Nextel Corp. executive, to run the enterprise growth group.

The addition of AmEx deals to Facebook may help the social network capitalize on the fast-growing market for daily online coupons made popular by sites such as Groupon Inc. and LivingSocial. In November, Facebook unveiled a feature that lets merchants including Gap Inc. and McDonald’s Corp. offer discounts to customers, and this year rival Google Inc. began offering a similar product called Google Offers.

Codes, Coupons

Unlike other discount shopping programs, customers won’t have to use a code or paper coupon to reap the benefits, Gilligan said. All discounts for online and in-store shopping will be applied at the end of the billing cycle as a credit in the cardholder’s statement, he said.

“You don’t have to pre-buy anything, you don’t have to print out a coupon, you don’t have to show your smartphone to a sales clerk to get the value of the offer,” Gilligan said.

American Express isn’t charging merchants for the service or repackaging personal information for sale to third parties, he said. The program allows the lender and retailers to track the progress of certain marketing campaigns.

Store owners will be able to track how many new customers and how much in sales were generated through specific advertising campaigns, Luke Gebb, AmEx’s vice president of global network capabilities, said in an interview.

“You’re able to also look back at that campaign and tell whether you gained loyal customers, did you receive repeat business off of those customers,” Gebb said. Retailers will “have a scientific means of understanding what worked and what didn’t so that you can try something different in the next campaign.”

American Express rose 88 cents, or 1.7 percent, to $52.21 at 9:51 a.m. in New York Stock Exchange composite trading. The shares had gained 20 percent this year through yesterday.

--With assistance from Douglas MacMillan in San Francisco. Editors: Peter Eichenbaum, Steve Dickson

To contact the reporter on this story: Dawn Kopecki in New York at dkopecki@bloomberg.net.

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net.


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