American Express Company

Author:Mariko Fujinaka, Rebecca Stanfel, Mark Lane, William Baue

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World Financial Ctr.

200 Vesey St.

New York, New York 10285


Telephone: (212) 640-2000

Web site:


In June 1996 American Express Company launched a $200 million global marketing campaign to emphasize its strong brand presence and also to introduce new products and services. As competition in the credit card market intensified, American Express (AmEx) had suffered declining revenues in the early 1990s. At the same time AmEx lost market share as the company made a failed attempt at becoming a financial services supermarket by purchasing several brokerage firms, investment banking companies, and real estate businesses.

American Express hoped that its "Do More" campaign, which consisted of both print and television ads, would lure consumers with the company's historic brand image of reliability and prestige. Once interest was captured, AmEx planned to inform consumers of its wide variety of services and programs, with the belief that consumers would take advantage of the offers because they trusted and respected AmEx. John Hayes, the company's executive vice president of global advertising, explained, "Our advertising used to be about a limited number of products and services, and was often defined by the people who used them. This campaign stresses our growing number of services and what American Express can do for you."

The "Do More" campaign continued into 1997, spreading information about the American Express collection of charge cards, credit cards, investment products, travel services, and more. In January AmEx also launched the "Competitive" campaign, which was part of the "Do More" effort yet focused exclusively on addressing the faults of its competitors' services. The campaign primarily targeted longtime rival Visa International, which had a history of attacking American Express in its ad campaigns.


The competitive portion of the "Do More" campaign was a reaction to continual onslaughts from Visa's marketing. Since the mid-1980s Visa had deliberately pitted itself against American Express, producing numerous television commercials that pointed out AmEx's alleged shortcomings as a credit card provider. James Desrozier, vice president of MasterCard International's advertising division, said in a 1992 Newsday article, "Visa went against American Express without mentioning MasterCard. It was the two of them and it just knocked us out of the game. It was a brilliant strategy."

American Express generally ignored Visa's attacks, although battles occasionally arose. Prior to the 1994 Olympics in Lillehammer, Norway, agreement had been reached between the two companies to refrain from attacking one another in Olympic-related advertising.

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In addition, because Visa was an official sponsor of the Olympics, AmEx was not to use images or shots from the events in its ads or to imply an affiliation with the Olympic Games. When the Olympics began, however, the agreement crumbled. Visa objected to AmEx television ads that claimed, "So if you're traveling to Norway, you'll need a passport, but you don't need a visa." The play on words could be confusing, it was charged, and Visa accused AmEx of suggesting that it was connected with the Olympics by emphasizing its history with and presence in Norway. Visa then countered with television ads using its standard anti-AmEx slogan, "And they don't take American Express."

American Express had long been marketed as a charge card that exemplified prestige and status, and its fees could pack a wallop. In 1995, for example, the standard green card commanded a $55 annual fee. An older marketing campaign embraced the tag line "Membership has its privileges," which hinted at AmEx's exclusive reputation. Its promises of privileges and perks, however, were not enough to sustain customer loyalty. Time magazine reported that in the early 1990s more than 2 million AmEx cardholders chose to cancel their membership. Other credit card companies such as Visa and MasterCard offered low interest rates and fee-free cards to consumers, and they garnered a lower usage fee from merchants, which made them more attractive to retailers. In 1977, for example, Visa reportedly took a 2 percent fee from purchases, whereas AmEx still took 2.74 percent, down from 3.22 percent in 1990. In 1995 H. Eugene Lockhart, MasterCard's chief executive officer at the time, told Fortune, "The consumer today simply doesn't see the need to pay fees for a card that gives them no greater functionality than anything we or Visa would give them." It appeared that the card of prestige had become the card of the privileged few rather than that of the masses, and, according to Fortune, AmEx's share of the domestic card market declined from close to 25 percent in 1990 to 16 percent in 1995.


American Express's clientele had traditionally included those who were financially established and for whom "membership ha[d] its privileges." AmEx had long been embraced by business travelers and corporate clients, and, according to Time, AmEx customers were "big spenders who charged an average of $6,000 on their cards in 1996, in contrast to some $3,200 for charges per Visa card." Business charges and travel expenses accounted for the bulk of this spending, however, and customers used AmEx cards infrequently for personal purchases. To remedy this situation and to increase its market share in the competitive credit card arena, AmEx needed to appeal to a broader market. The company thus expanded its target clientele to include not only the upscale crowd but also the credit card-carrying masses. To compete with Visa and MasterCard, AmEx promoted its Optima credit card, which allowed the cardholder to pay off a percentage of the balance each month rather than the entire balance, as with the traditional AmEx charge card.

For the "Competitive" campaign American Express took aim at non-AmEx cardholders to inform them of its numerous incentive programs and premiums. While companies such as Visa and MasterCard had long offered a slew of cards and rewards to its cardholders, including discounts on purchases and free airline miles, AmEx had generally refrained from such programs and stuck with its traditional card offerings. But the company learned a lesson, reported Time, during a focus group session in the early 1990s when the holder of a competing card that offered free airline miles stated, "I want to go with you guys, but you guys are so stupid that you're not offering this product to me." In a company survey AmEx learned that its cardholders would use their AmEx cards for more purchases if the spending rewarded them with travel, food, and merchandise perks. AmEx thus expanded its small airline mileage program in 1995 to offer a wide-ranging rewards program. The Membership Rewards program allowed cardholders to earn points by using their AmEx cards, which could later be exchanged for travel rewards, merchandise, gift certificates, and more. AmEx also began to offer a wider variety of cards, including some with no annual fee and some co-branded with other companies, and solicited retailers to increase the number of outfits at which the card could be used. As AmEx president Kenneth Chenault told U.S. News & World Report, "If our customer wants to use the American Express card at a hot dog stand, we want to be there."


The Better Business Bureau had dealt with American Express and Visa on numerous occasions throughout the 1990s. However, until Visa cried foul over AmEx's Visa-bashing "Paris" spot, AmEx had been doing all of the complaining.


Although American Express faced competition from credit card companies, major banks, and other financial service providers, Visa provided the most visible rivalry.

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According to RAM Research findings reported in Advertising Age, the ubiquitous Visa card dominated the credit card market with a share of 50.5 percent during the first half of 1996. MasterCard followed with 26.4 percent, AmEx with 15.9 percent, and Discover with 7.3 percent. Similar reports by SMR Research in USA Today indicated that AmEx's share dropped from 20.4 percent in 1992 to 16.4 percent in 1996. Visa's market share, on the other hand, rose from 45.1 to 49.2 percent, while MasterCard's share remained essentially steady at 27.6 percent.

American Express's market share could not match Visa's, but AmEx showed signs of improvement in 1996 when it finally reversed a decade-long decline in its share of the credit card market. Advertising Age reported that spending on AmEx cards went up 15.6 percent in 1996 from 1995, while Visa's purchase volume increased 15.5 percent. And according to U.S. News & World Report, 41.5 million AmEx cards were in circulation in 1996, an increase of 8 percent from the previous year. Carl Pascarella, CEO of Visa U.S.A., was not impressed, however, as he told Time: "They haven't changed much…. Over the past eight or nine years, consumers have been pulling out their Visa card significantly more often than their American Express card." AmEx indeed had a long way to go to catch Visa. There were almost 600 million Visa cards in distribution, and Visa was accepted by more than 14 million retailers globally. Although AmEx had been signing up more businesses to accept its cards and had more than 5 million merchant partners, this was...

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