Want fries with that bank statement?
In your online statements, banks are inserting targeted ads from companies you patronize. Is that an invasion of privacy or an efficient way to get coupons?
Your bank statement is the last place you expect to be asked "Do you want fries with that?"
But McDonald's is among a number of retailers who are now advertising in online bank statements. They may not just suggest you get fries on your next visit, they'll offer you 10% cash back, with the clickable "coupon" going right on your debit card. You may get the same offer from McDonald's if you've used your debit card to charge a meal at Burger King.
The banks see the advertising money as a way to replace revenue lost by new rules on interchange fees and as a substitute for rewards programs that cost them money. The merchants like the ads because they can target customers who are interested in their products.
The online advertising in bank statements is yet another twist on targeted advertising, which delivers ads to customers based on past behavior. If you have no charges at fast-food restaurants, you won't be offered McDonald's coupons.
This is how Ylan Q. Mui of The Washington Post explains the issue:
Online banking is the latest frontier in the controversial field known as behavioral marketing, in which detailed personal information is used to target advertising. Consumer groups have decried the practice as an invasion of privacy, particularly since users often do not realize who has access to the most intimate details of their lives.
Banks say customers' personal data isn't shared with marketers, and customers can opt not to see the ads in their bank statements.
"We don't cookie customers and follow them around the Web," Meghan Keane of the Econsultancy blog quoted Hans Theisen, chief revenue officer, as telling Advertising Age. "It's less infringing upon a customer's privacy than many behavioral-targeting companies."
Participating banks and merchants, which include Macy's and Staples as well as McDonald's, like the program, Cardlytics CEO Scott Grimes told the Post, and customers are responding. The company is rolling out a mobile version.
When McDonald's inserted an ad in bank statements in Houston, almost 20% of customers who had eaten at another fast-food restaurant took McDonald's up on its offer for 10% cash back on their next purchase at McDonald's. Among customers who had spent $75 or more at fast-food restaurants in three months, 60% activated the offer, the Post reported.
What do you think? Would you like to see "coupons" from businesses you patronize on your electronic bank statements? Or do you think that this kind of targeted advertising requires sacrificing too much privacy?
More from MSN Money:
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
ABOUT SMART SPENDING
Editor Bev O'Shea lives and works in the foothills of the Appalachians. A former copy editor for The Atlanta Journal-Constitution and the Orlando Sentinel, she joined MSN Money in 2007. She's a fan of sunsets, college football and free shipping, among other things.
Having worked as a writer, reporter and editor for more than 25 years, Editor Julie Tilsner is the sort of person who can't help but correct grammar in Facebook postings and on billboards. She's written for BusinessWeek, the Los Angeles Times, Parenting, Redbook, AOL and others. She lives in Los Angeles County with her family and loves to drink wine and practice yoga, although not generally at the same time.
A writer for MSN Money since January 2007, Donna Freedman won regional and national prizes during an 18-year newspaper career and earned a college degree in midlife without taking out student loans. She also writes about smart money tactics for magazines and on her own site, Surviving and Thriving.
Mitch Lipka has been warning people about scams and shining light on questionable business practices for more than 20 years. Mitch, the consumer columnist for The Boston Globe, has also been a reporter and editor at The Philadelphia Inquirer, Consumer Reports, South Florida Sun-Sentinel and AOL. He won the 2010 New York Press Club award for best consumer reporting online and was honored in 2011 for his reporting on child product safety.
Marilyn Lewis is an award-winning writer with a passion for getting readers clear, straight information that helps them stay out of financial trouble. A former reporter for The San Jose Mercury News, she works from her home in Port Townsend, Wash. Contact her at MarilynLewis@Outlook.com.
LATEST BLOG POSTS
These airlines have taken a la carte flying to a new level, charging for everything you can think of and then some.