Payments app Venmo
launches ads, ramps up competition for banks
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[September 12, 2016]
By David Henry
NEW YORK (Reuters) - Payments app Venmo
will roll out its first major promotional campaign on Monday,
intensifying its battle over young customers' wallets with big
Its 15- and 30-second video ads will begin appearing nationally
Monday evening on cable networks including MTV and Comedy Central,
and on internet-based services Hulu and YouTube. (https://youtu.be/t2o9p5F4oY4)
The campaign also includes ads on posters, billboards, drink
coasters and pizza boxes.
The move is a milestone for Venmo, which has largely acquired new
users by word-of-mouth since its 2009 launch. It comes weeks after a
consortium of banks decided on a name for a competing payments app,
to be called Zelle.
Venmo's ads, viewed by Reuters, feature young people toasting beers
or eating pizza while riding small horses, with the tagline: "Pony
up with Venmo."
Its customers, primarily in the millennial generation, mostly use
the app to split tabs among friends or share roommate expenses like
rent and utility bills.
If Venmo's campaign works as intended, customers will learn to start
typing the words "pony up" to create an emoji symbol of a pony and
upward arrow, Kasai Leyden, Venmo's director of marketing, said in
Big banks including JPMorgan Chase & Co and Bank of America Corp
have been haggling over the roll-out of their Zelle app, expected to
launch in the first half of 2017.
Banks hold the vast majority of deposits, so they have a built-in
advantage over apps like Venmo, which is owned by PayPal Holdings
But banks are playing catch-up when it comes to digital offerings
that appeal to young customers. Meanwhile, Venmo has become a
serious and savvy competitor.
PayPal has said the app handled $3.9 billion of payments in the
second quarter, 1.4 times what it processed a year earlier.
Most Venmo customers are in the coveted 18-to-35 age group, an
important segment for banks because they represent the future of
saving, borrowing and investing.
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Leyden declined to say how much Venmo will spend on the new
campaign, which will run for two months. Previously, Venmo's only
real advertising was a short run of posters in the New York City
subway system in 2014.
Venmo has been developing the campaign throughout this year, Leyden
said, calling it a "fortunate coincidence" that it is beginning
before the banks launch theirs.
Existing users told Venmo during interviews that the campaign is
necessary, Leyden said.
"The feedback we get is, 'Can you guys start spreading the message
yourselves and make sure I am not the only one doing the
cheerleading?'" she said.
In addition to the TV ads, posters and billboards, Venmo has ordered
pizza boxes with a "Peace of Pizza Agreement" printed on top that
obligates those who eat from it to pony up with Venmo, or pay with
"inconvenient, antiquated means," such as cash and checks.
Venmo is also distributing drink coasters at bars, and putting the
marketing on pony-themed pedicabs in four cities where the app is
catching on most quickly: Chicago, Austin, Texas, Portland, Oregon
and Nashville, Tennessee. Some posters are customized for local
specialties, such as paying bills for spicy chicken in Nashville and
deep-dish pizza in Chicago.
To add a surprising incentive, Leyden said the company will
occasionally pony up for someone with a pending request and pay, for
example, their $50 share of a grocery receipt.
Overall, Venmo's goal is to lighten up the awkward moment of
prodding friends for money, said Leyden.
"It is a pretty short campaign cycle, but it is meaningful to us,"
(Reporting by David Henry in New York; Editing by Lauren Tara
LaCapra and David Gregorio)
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