AmEx Outlines an Aggressive Plan for Expansion in Marketing

At more than $16 billion, revenue for American Express Co. hit an all-time high in the company’s June quarter, and now the travel-and-entertainment card giant is looking to ramp up marketing—radically. The company’s top brass said early Friday AmEx will pour $6 billion this year into selling consumers and businesses on the merits of using and accepting AmEx cards, up 15% from 2023’s spending.

“It isn’t an area we’ve ever been in before. It’s because we see the opportunities,” said AmEx chief executive Steve Squeri during a conference call with equity analysts to discuss the company’s quarterly results. Squeri also wants to make sure AmEx can guard its position in the card market against aggressive rivals, he added. “We don’t see competitors pulling back at all. We want to gain more share,” he said. “The overall goal is to be more engaged with consumers and [small and medium-size businesses].”

Product “refreshes” have been a key part of this effort, Squeri said, adding the company’s Gold card is next up for an update. AmEx is “half-way through” this product initiative, he added, having launched it last fall. He refrained from going into detail about the effort. “One thing about the refresh,” he said, “it makes the marketing dollars work a lot harder.”

Behind this effort lies AmEx’s core goal of attracting high-income, high-spending cardholders—“premium customers,” as Squeri put it on the call. “We feel good about where we are right now. We’ll focus on acquiring more cardholders,” he told the analysts. Against this backdrop, he added, “We don’t see our competitors pulling back at all. We want to gain more share.” Analysts on the call reacted favorably to the spending build-up. “It seems like you’re putting the pedal down” on marketing, noted one.

Nor does the company intend to close the tap any time soon. “We can set marketing at an even higher level next year,” noted Squeri, a point his chief financial officer reinforced. “We see a lot of stability across the next few quarters, and even further. We can afford to spend more,” noted Christophe Le Caillec, adding, “That’s what we bake in” on the revenue side.

Outside of its marketing juggernaut, AmEx hasn’t been shy of disposing of assets. It agreed in January to sell its risk-detection unit, Accertify, to private-equity firm Accel-KKR in a deal that closed this summer. Terms were not disclosed. AmEx acquired the company late in 2010 for $150 million.

For the quarter, AmEx reported network volume of $441 billion, up just over 3% year-over-year. Consumer volume grew nearly 6.5% to $165 billion. Revenue companywide totaled $16.3 billion, up 8%. A bit more than half of this intake is accounted for by discount revenue, the fees merchants pay to accept AmEx cards. This totaled $8.9 billion, up  5%. Net income grew 39% to $3.02 billion.