Startup Clovr Touts Card-Linked Offers

A new startup plans to make it easier for consumers to grab online offers by allowing them to have advertised discounts credited directly to their bank credit or debit cards. Launched by Third Screen Media founder Tom Burgess, Clovr Media bills itself as the first company to power card-linked offers directly in Web banners, text links, and video and mobile ads.

The Waltham, Mass.-based company came out of stealth mode Tuesday to announce $1.5 million in seed funding from Kepha Partners and Common Angels. With that funding, Clovr Media aims to carve a lucrative niche by effectively extending bank loyalty programs beyond their own sites into third-party advertising across the Web.

"Card issuers looking for more efficient and unique ways to build loyalty programs," explained Burgess, a veteran digital media entrepreneur. "So what we've brought to them is something they've never seen before -- the ability to reach beyond their touchpoints into the digital media landscape and put offers in front of consumers and have brands pay for it."

Here's how the Clovr system works: A bank customer signs up for the offers program in connection with a particular bank card from their financial institution. In the registration process, Clovr collects a mobile phone number from the customer to confirm their opt-in enrollment via cell phone. Each user is assigned a cookie for online tracking as well.

Clovr can then retarget bank customers on the Web with specific offers based on their purchase history and intent as well as contextual, demographic and other targeting criteria. When a user clicks to receive an advertised offer, that action is linked to their card account and a text message is sent to confirm acceptance.

When someone completes the transaction, either online or in a store, the customer doesn't get a direct discount on a product but a credit applied to their bank account equal to the amount of the offer. Another text message confirms their account has been credited.

Burgess refers to the card-linked offers as "loyalty 2.0" for banks. Unlike other vendors such as Cardlytics, which works with banks to present offers within online bank statements, Clovr offers banks a more aggressive marketing approach. "The banks are happy with this because they want to see people pulling out their card first -- that's what they call 'top of wallet,'" he said. And brands and retailers stand to benefit by driving more Web or foot traffic through the offers.

Burgess also assures marketers will be able to track Clovr-enabled offers back to their source. "Every one of our transactions is attributable," he said. "So we can attribute back to where the click happened and then see all the way through until the person goes to the point-of-sale."

So what banks and brands are rushing to team up with Clovr? Burgess will not name any financial institutions or advertisers the company may work with, but says it will announce partner companies in the coming weeks and months. It would not be surprising if banks had some initial reluctance in connecting customers' card information directly to offers popping around the Web and on mobile phones. What happens when loyalty 2.0 meets privacy 2.0??

Clovr will not have access to users' bank account numbers or card numbers, according to Burgess. "That sits behind the bank's firewall all the time," he said.

"We just have a unique [authentication] token ID for each user, so any matching of data and so forth happens within the bank."

He contrasted Clovr's approach with that of personal finance startups like Blippy, which ignited a privacy controversy when it was revealed that the company had allowed some users' credit card numbers to be exposed publicly via Google.

He added that Clovr is also working with Better Advertising -- an organization formed by trade groups including the American Association of Advertising Agencies and the Interactive Advertising Bureau to stem online advertising regulation -- on compliance with its self-regulatory privacy principles.

But Clovr would have the ability to track participants' card transactions, and ping them with a new incentive, for instance, when they haven't been active in responding to offers. The company will also work with banks to apply points to transactions through existing loyalty programs.

"We're a bank partner and this program is opt-in for the consumer," said Burgess. "We make them completely aware of the way the model works." Whether Clovr can convince consumers and banks its system is safe and reliable will largely determine whether it succeeds.

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