American Express teams up with Twitter
Have something to say about McDonald's? You might just get a discount.
American Express (AXP) and Twitter have teamed up to offer discounts when American Express cardholders send advertising messages to their Twitter followers.
It's a pretty clever idea. The companies can create a small army of advertising minions at very little cost. And Twitter users feel like they're getting a deal as well. The only people getting the short end of the stick are the Twitter followers who get subjected to all the shilling.
American Express cardholders can sync their cards with their Twitter accounts at sync.americanexpress.com/twitter. Once the two accounts are linked, the cardholders will be eligible for special deals at participating merchants such as McDonald's (MCD), Best Buy (BBY) and Amazon's (AMZN) Zappos.com.
First, the cardholder must send a tweet that includes a merchant's special hashtag. The tweet doesn't have to be an outright advertisement; it just must include the hashtag. When that happens, a deal gets loaded directly to that person's American Express card. The cardholder then makes a purchase from the participating merchant, and the American Express card account automatically receives a credit within days.
The new program is a win for American Express because it adds to member benefits and creates a deeper relationship between the company and its customers. It also places Twitter in a position to profit not only from e-commerce, but from sales at traditional brick-and-mortar businesses.
"American Express is turning Twitter content into commerce by connecting card members to merchants and delivering real world value to both," American Express executive Ed Gilligan said.
American Express reportedly planned to launch the program with just five participating merchants. However, the program attracted so much attention that nearly 20 companies have already signed on to take advantage of Twitter's viral marketing potential.
The partnership is one example of how Twitter could leverage its massive online user base to turn a profit. And that's good news for investors who are anticipating a Twitter IPO but have concerns about how the company will generate significant profits.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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