• by Laurie Sullivan  @lauriesullivan, May 9, 2012

edo is building out an advertising channel where a swipe of a credit or a debit card becomes the signal to serve up ads. The swipe at the point of sale (PoS) activates Geocommerce Offers, a mobile advertising platform that combines purchase and location data to target ads and offers in real-time.

The targeted coupons and offers are based on historic purchases, spending behavior and location. Two banks will pilot the product, which should roll out within the next 45 days. One bank recently signed on as a partner, while the other has worked with edo's card link system that connects banks and advertisers.

The Geocommerce technology does not rely on geolocation targeting technology. The transaction through the point-of-sale (PoS) terminal becomes the signal. It does, however, tap into audience segments, purchase behavior and purchase history to serve up offers and discounts. And it allows merchants to serve up consumers limited-time or time-constraint offers that might support impulse buys.

A customer can walk into a Starbucks and pay for the coffee, for example -- and before he reaches for the door a text message or email provides $5 off a burger at Bistro, a nearby restaurant, when the bill totals $15 or more. Consumers who take advantage of the deal will receive the refund after paying with a debit or a credit card linked to participating financial institutions or banks.

Geocommerce links into edo's core platform launched last year. Jeff Fagel, VP of marketing at edo, said the company supports a handful of banks and more than 150 merchants from retail to dinning to service, such as Verizon, Quiznos, and The Body Shop. "By the end of summer, we'll have 15 million active cardholders in the network," he said. "In Q3, the total will reach 25 million; and Q4, more than 30 million. These are cards in the process of being activated and partners being integrated."

Fagel believes Geocommerce can do for offline merchants what search did for online.

Retailers are trying to solve the instant gratification one-off mentality that Groupon created, and turn it into a longer-term relationship, according to Emery Skolfield, senior director of ecommerce at The Body Shop, which launched a campaign two weeks ago. It's scheduled to run three months.

The Body Shop's promotion provides a cash-back offer, targeting consumers who purchased from the retailer or other brands that align with the company's products. "The bank cards make it an easy form of interaction, because consumers usually use their card when they shop," Skolfield said. "And when they do they get cash back."

Promotions will vary by retailer. Each week, consumers could receive between three and five offers from their participating bank. edo connects banks with advertisers to target the offers through online banking portal, email, text messages or mobile application. Consumers are bucketed into segments based on spending behavior. The offers might come from nail salons or restaurants. The ad platform works off a pay per performance model.

Fagel said a national retail chain ran a program that returned dividends. Banks with active cardmembers have seen a 20% use in cards. One retailer offered a promotion giving consumers $1 off each $7 spent. That retailer lifted its average transaction amount from $8.30 to $11.43. About 2,500 new customers participated in the retailer's offer, and 70% of them returned within the following 60 days. Existing customers increased their buying frequency by 25%.