Commercials

[CreditScholar]

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@Anonymous wrote:

It seems Amex is taking a different route and making monstrous moves on Facebook, Twitter and other types of social media. Although educated consumers know that Amex is nothing more than a credit card with benefits similar to other programs . There is still a perception of prestige with their cards among the lesser educated consumer. I do remember the Jerry Seinfield, Beyoncè type comercial that are over a decade old now 

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+1. The lesser educated consumer, many of whom have been traditionally locked out of cards like Amex in the past, still attach quite a bit of prestige to the card even though it may not be warranted. People who know better, know better. It's like they associate "yesterday's clientele" with themselves, but they dont realize the average Amex client (in terms of quality) has dropped substantially compared to 15+ years ago. When you open the floodgates, exclusivity and prestige both drop. A lot of the general public hasn't seemed to realize this yet. If they did, there wouldn't be as much of an Amex cult following like we see currently.

[Open123]

AmEx is definitely cashing in on it's reputation of old and the prestige attached to it with the old guard. 

I sense they've been trying to cultivate the newer generation because they sense once the existing cardmembers retire or pass on, this prestige will likely plumit.  The "next" generation (Gen X) are mostly Visa/Mc users who all found AmEx disappointing during the 90s during the time of the Boston Fee Party.  I think Amex senses they likely won't win this generation over, and have opted instead for Gen Y with social media, twitter, and facebook.

In my view, Amex's bread and butter cardmembers are all getting long on the tooth.  They will need "new" blood very soon, especially with other issuer's closing the gap very quickly, such as Chase.  Even Citi has rumored to be adding BA/Kris Flyer to their underwelming Thank You program.

Aside from the perceived prestige I place on an Amex card (all those commercials in the 80s sure worked on me along with seeing my father use the card), now that I've examined Chase's UR Rewards with a closer eye, I've got to admit the Ink Bold is a better value than any of the Amex charge cards.  For $95 fee, the Bold offers 5X rewards on spending categories with no limit on overall spending and no forex fee.  The UR programs appears to be improving and expanding while the MR program appears to be stagnant.

I think Amex has decided the commericals aren't effective with Gen X, but will instead try to reach directly to Gen Y, based on their bitter experience with this generation during the 90s.

[scottwagnon]

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@Anonymous wrote:

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@Anonymous wrote:

This forum is a great example of why AMEX doesn't need memorable commercials.

Look at how most of the forum itself pines over the elusive AMEX card.

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It's like we're walking billboards for them.

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LOL! i am LMAO totally

[CreditScholar]

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@Open123 wrote:

AmEx is definitely cashing in on it's reputation of old and the prestige attached to it with the old guard. 

I sense they've been trying to cultivate the newer generation because they sense once the existing cardmembers retire or pass on, this prestige will likely plumit.  The "next" generation (Gen X) are mostly Visa/Mc users who all found AmEx disappointing during the 90s during the time of the Boston Fee Party.  I think Amex senses they likely won't win this generation over, and have opted instead for Gen Y with social media, twitter, and facebook.

In my view, Amex's bread and butter cardmembers are all getting long on the tooth.  They will need "new" blood very soon, especially with other issuer's closing the gap very quickly, such as Chase.  Even Citi has rumored to be adding BA/Kris Flyer to their underwelming Thank You program.

Aside from the perceived prestige I place on an Amex card (all those commercials in the 80s sure worked on me along with seeing my father use the card), now that I've examined Chase's UR Rewards with a closer eye, I've got to admit the Ink Bold is a better value than any of the Amex charge cards.  For $95 fee, the Bold offers 5X rewards on spending categories with no limit on overall spending and no forex fee.  The UR programs appears to be improving and expanding while the MR program appears to be stagnant.

I think Amex has decided the commericals aren't effective with Gen X, but will instead try to reach directly to Gen Y, based on their bitter experience with this generation during the 90s.

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+1. I think you're right on target with their prime clients "getting long in the tooth".

The major problem is that Gen Y simply doesn't have the old guard's earning/spending power, nor will they ever. In reality, Gen Y will be the first generation in modern US history to have a lower standard of living compared to the generation before it. With crushing loads of student and consumer debt, a poor global economy, dim prospects and a lack of job stability, it'll be hard for them to amass the same kind of wealth.

This might also explain why they're diluting their lending standards and expanding their client-base. If they want to maintain their profits, they'll need to gradually shift from relying on margins to relying on increased volume.

[Open123]

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@CreditScholar wrote:

This might also explain why they're diluting their lending standards and expanding their client-base. If they want to maintain their profits, they'll need to gradually shift from relying on margins to relying on increased volume.

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For Amex, I think this is eventually what they'll have to adopt if they're to maintain their current standing as the "Haagen Dazs" of credit cards.  

You know, Chase knew what they were doing when they hired Gordom Smith away from Amex.  Now, I'm starting to see why the Ink Bold and CSP is so appealing to me. Chase has generation X because of the Visa/MC allure, and has become the first issuer I've seen to legitimately challenge the supremacy of the Amex MR program.

If the DOJ wins their anti-trust case against Amex, I think we'll see Amex go through rough waters as they did in the 90s, which almost brought them to extinction.  Then, as now, they need to change in order to survive.  Only then they embraced credit cards when they swore they never will.  Eventually, I think they'll need to focus on volume rather than high avg spend/cardmember.

[CreditScholar]

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@Open123 wrote:

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@CreditScholar wrote:

This might also explain why they're diluting their lending standards and expanding their client-base. If they want to maintain their profits, they'll need to gradually shift from relying on margins to relying on increased volume.

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For Amex, I think this is eventually what they'll have to adopt if they're to maintain their current standing as the "Haagen Dazs" of credit cards.  

You know, Chase knew what they were doing when they hired Gordom Smith away from Amex.  Now, I'm starting to see why the Ink Bold and CSP is so appealing to me. Chase has generation X because of the Visa/MC allure, and has become the first issuer I've seen to legitimately challenge the supremacy of the Amex MR program.

If the DOJ wins their anti-trust case against Amex, I think we'll see Amex go through rough waters as they did in the 90s, which almost brought them to extinction.  Then, as now, they need to change in order to survive.  Only then they embraced credit cards when they swore they never will.  Eventually, I think they'll need to focus on volume rather than high avg spend/cardmember.

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Completely agree with everything here. I'm curious what you think as to the difference in spending power between Gen X and Y, and how it will affect who "wins" and "loses".

From what I can see right now, Gen Y has severely limited spending power due to how things have been in the world during the majority of their adult life. Gen X is squarely in the hands of Visa/MC, and I don't think that's changing anytime soon.

[Open123]

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@CreditScholar wrote:

Completely agree with everything here. I'm curious what you think as to the difference in spending power between Gen X and Y, and how it will affect who "wins" and "loses".

From what I can see right now, Gen Y has severely limited spending power due to how things have been in the world during the majority of their adult life. Gen X is squarely in the hands of Visa/MC, and I don't think that's changing anytime soon.

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In my view, Gen X will inherit more wealth than any generation prior, which is why the Mod Cut. Sorry but politics is one of the 5 things not allowed to be discussed. It gets overheated much too fast. MarineVietVet, myFICO moderator are fighting so hard to abolish the 50% inheritance tax.  At the very least, they won't settle for less than raising the estate tax exemption to 5 or 6 Million.  Without question, GenX is deeply entrenched in the Visa/MC camp.  You're right, this will never change.

Unless some unforseen legislation is passed, over the next 20 - 30 years, we'll see one of the biggest disparities of wealth occur in the US.  GenX will work longer because of the concerns over social securities insolvency and the necessity to maintain their group policies because of rising medical costs.

GenY will find the good high paying jobs all taken by GenX.  With GenY's unprecedented education debts where they're literally starting their careers with $100k + in school loans, I see their spending power surpressed for the next decade, if not more.

Amex's only hope is to capture the GenY entrepreneurs.  If GenY is to survive and prosper, they'll have to start business and create their own jobs.  They need to be entrepreneurs since most of the high paying corporate jobs will be held by GenX.

The next 20 years will be very interesting, especially with rise of Asia juxtiposed with what's going on in America.

[CreditScholar]

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@Open123 wrote:

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@CreditScholar wrote:

Completely agree with everything here. I'm curious what you think as to the difference in spending power between Gen X and Y, and how it will affect who "wins" and "loses".

From what I can see right now, Gen Y has severely limited spending power due to how things have been in the world during the majority of their adult life. Gen X is squarely in the hands of Visa/MC, and I don't think that's changing anytime soon.

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In my view, Gen X will inherit more wealth than any generation prior, which is why the Mod Cut. Sorry but politics is one of the 5 things not allowed to be discussed. It gets overheated much too fast. MarineVietVet, myFICO moderator are fighting so hard to abolish the 50% inheritance tax.  At the very least, they won't settle for less than raising the estate tax exemption to 5 or 6 Million.  Without question, GenX is deeply entrenched in the Visa/MC camp.  You're right, this will never change.

Unless some unforseen legislation is passed, over the next 20 - 30 years, we'll see one of the biggest disparities of wealth occur in the US.  GenX will work longer because of the concerns over social securities insolvency and the necessity to maintain their group policies because of rising medical costs.

GenY will find the good high paying jobs all taken by GenX.  With GenY's unprecedented education debts where they're literally starting their careers with $100k + in school loans, I see their spending power surpressed for the next decade, if not more.

Amex's only hope is to capture the GenY entrepreneurs.  If GenY is to survive and prosper, they'll have to start business and create their own jobs.  They need to be entrepreneurs since most of the high paying corporate jobs will be held by GenX.

The next 20 years will be very interesting, especially with rise of Asia juxtiposed with what's going on in America

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I think you're right and it's honestly quite fascinating. I was speaking with a couple of my colleagues last week about this, and there seems to be a huge gap between Gen X and Y. All 3 of us are the last of GenX and are quite progressed in terms of our careers. When we look to people even 5 years younger, employment becomes spotty, income levels drop tremendously, stability is generally lower, and overall opportunity seems less. I never thought too much about what a difference 5 years makes, but from what I can see it seems like quite a bit.

The question is even if Amex catches GenY entrepreneurs, will it be enough to offset the enormous disparity between GenX and GenY in terms of wealth and earning power? Amex could still win over GenY and its entrepreneurs, but still lose the game as the vast majority of GenY are currently setup to flounder financially for the next decade or two. Sure there will be entrepreneurs, but what about the rest?

[Open123]

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@CreditScholar wrote:

The question is even if Amex catches GenY entrepreneurs, will it be enough to offset the enormous disparity between GenX and GenY in terms of wealth and earning power? Amex could still win over GenY and its entrepreneurs, but still lose the game as the vast majority of GenY are currently setup to flounder financially for the next decade or two. Sure there will be entrepreneurs, but what about the rest?

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GenY is in the pipeline, and any issuer banking ln this demographic will have wait for quite some time, which is why I think Amex can't afford to lose their suit vs. the DOJ. If Amex loses the higher merchant fees they command because of their top old guard spenders, the company will be severly challenged.  In this case, I don't think even gathering the cream of the crop from GenY will offset the present lost revenue.

In my view, Amex needs this revenue to weather the storm until the "top tier spenders" of GenY come of age, which could take 20 years.  I think they can weather the storm, but not if they lose the suit vs. the DOJ.

Amex's best shot at survival here will be the 80/20 rule, where 80% of the revenue is derived from 20% of the clients.  They have that now, but will need to bridge the gap until GenY's 20% starts to embrace their spend-centric model.  I think Amex realizes they've lost the general appeal of GenX, which is one of the reasons why I think they don't even bother with commercials.  The only Amex commercials of any relevance are the ones for Open geared towards small business owners.

For GenX, I suspect we'll see more and more people replace the really expensive Amex cards (especially the personal ones) with the CSP especially if the UR program continues to improve and expand, at least with that segment for whom travel and uncapped rewards spending is important.

[Anonymous]

Just saw an AMEX commercial this morning on Facebook with Aziz Ansari in it.

BTW, anyone with AMEX while they are facing this problem with who they should market to, actually benefits. We're in, we get the increased credit lines.