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Technology Stocks : NextCard, Inc. (NXCD) -- Ignore unavailable to you. Want to Upgrade?

To: Tech Expert who wrote (16)	5/28/1999 11:00:00 AM
From: djane	Respond to of 192

Dilbert and BabyCenter? SF Business Times article below May 24, 1999 NextCard's new charge How about Dilbert -- in plastic? Clifford Carlsen Business Times Staff Writer Online consumer finance pioneer NextCard Inc. has zeroed in on heavy-spending techno-sophisticates and new parents, inking deals for cartoon character Dilbert and online children's goods retailer BabyCenter.com to endorse its credit cards. Separate licensing deals with United Media and BabyCenter are the first volley in an aggressive campaign to link the expanding Internet-based bank with popular consumer icons. The deals will also lead to marketing tie-ins and affinity programs to attract consumers and increase the visibility of the NextCard brand. In less than two years of operation, NextCard has generated more than $125 million in credit card loans, making it the fastest-growing credit card issuer in the country. The company's Internet-based system of immediate application processing and card customization has established it as the leader in online consumer credit. A huge chunk of its recent $120 million initial public offering will finance expansion of its marketing efforts. Unlike typical bank issuers that remain largely invisible behind the Visa or MasterCard name, NextCard is trying to use its partnerships to build a brand that consumers will identify with the Internet and other breakthroughs in electronic banking. One way the deep-pocketed company expects to do this is by spending money to promote its brand through alliances and high-profile marketing programs. "We will be launching co-branded products with both of these deals, targeting unique affinity groups," said Rich Goebel, NextCard's director of business development. "This is part of a larger effort of target marketing, to leverage our name with other well-known brands." Affinity and reward programs make up about 33 percent of all credit card accounts, said Greg Weed, director of card services for the credit card industry research firm PSI Global in Tampa, Fla. They are generally used to provide a branded identity for a card, independent of the issuing bank. Reward and affinity card users tend to carry higher balances when they do not pay off their bills monthly, making their accounts more profitable, Weed added. And even those that do not carry a balance tend to spend more, boosting merchant fee revenue. Goebel would not disclose details of the deals, but credit card affinity agreements usually entail an initial licensing fee, and royalties based on usage. NextCard will be the first credit card licensee ever for United Media, which also owns the rights to "Peanuts" and other leading cartoons. NextCard hopes the association will attract technology-savvy users, with a tongue-in-cheek approach to corporate life. "The product will be aimed specifically at a Dilbert audience, and will give us an opportunity to be a little anti-corporate," Goebel said. "We can poke some fun at credit cards as a necessary evil." BabyCenter cards will display photos of users' babies, and will offer discounts and features customized to new parents. According to Nielsen ratings, NextCard is already the third-largest Internet advertiser after Amazon.com and Microsoft, posting some 50 million ads a day. Dilbert and BabyCenter products will become part of that advertising blitz, and the company's offering prospectus stated that it will spend heavily to establish brand recognition with Internet users. NextCard spent $4.3 million on marketing and advertising in 1998, and expects to increase that significantly to further expand Internet-based campaigns. Week of May 24, 1999 \| Leading Stories \| Top of the page