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JPMorgan’s latest offering is not a private credit fund, banking app or AI-powered stock picker. It is advertising.
America’s largest bank, with more than $2.4tn in deposits, is getting into the ad-selling business. A new unit, Chase Media Solutions, will help brands target the bank’s customers based on their spending history. The move makes the Wall Street lender the latest non-traditional player to try to turn user data into advertising revenues. Companies such as Walmart, Uber and Marriott International have all joined the digital ad gold rush in recent years.
For good reason: the duopoly of Google and Meta, parent company of Facebook, still rules the $270bn US digital advertising market. Between them, the pair controlled more than 47 per cent of money spent last year, according to research group Insider Intelligence.
But their grip is loosening. Privacy changes implemented by Apple and Google in 2021 disrupted the way data could be harvested and used for targeted ads. The end of third-party cookies left brands with less insight into how effective their ad spending is. But it has made first-party data — like that collected by JPMorgan on its 80mn customers — a valuable commodity.
Unlike retailers, which sell ads on websites, apps and self-checkout screens, JPMorgan’s new advertising unit will help brands target specific subsets of shoppers with discounts and deals through its Chase Offers programme. For example, deals for nappies (or diapers) will be shown only to customers whose spending history suggests they have a baby. Chase cardholders will see offers when they log on to their app and can choose to activate the ones they like. Advertisers will not have direct access to Chase customer data.
JPMorgan did not provide any revenue or net income projections for its new venture. It does not need to. The bank made nearly $50bn in net income on $158bn of revenue last year. Advertising will not replace consumer or investment banking anytime soon. Still, margins are high in the ad business, meaning the unit has the potential to become a lucrative side hustle. At Walmart, advertising is already a multibillion-dollar-a-year business.
As the country’s biggest credit card issuer and consumer bank, JPMorgan’s main selling point to advertisers is the sheer scale of its customer data. Retailers can see only what customers purchased at their stores; Chase has a bird’s-eye view of its cardholders’ complete spending habits. Consumers, who once rankled at their data being used for targeted ads online, will have to get used to this happening everywhere.
