Payments app Venmo is having a great week.
First, the company benefited from a bit of viral luck on Saturday in Knoxville, TN. During ESPN’s popular “College GameDay” preview show, an enterprising student visible in the background held up a sign:
“Hi Mom! Send Beer Money” the jokey sign read. Below that message the student included his Venmo username. If not a little disappointing for mothers everywhere, then clever, right?
Twitter thought so, too. The University of Tennessee student says he received more than 3,000 donations from strangers who saw his sign, including $50 volunteered from Venmo. It’s unknown how much he made, but he’s likely happy with his returns.
Then, according to Reuters, on Monday, Venmo launched its first major advertising campaign, in the form of 15- and 30-second video ads on cable networks such as MTV and Comedy Central, and on internet-based services Hulu and YouTube.
Pony up, Venmo users!
With the exception of a series of posters it ran on the New York City subway in 2014, Venmo has never used a mainstream advertising campaign. Rather, it’s gained notoriety and a user base through word of mouth. That the app handled approximately $3.9 billion in digital payments in the second quarter of 2016, a 37% growth rate, shows just how far word-of-mouth can go.
The two-month campaign is not just limited to TV, either. Venmo plans to roll out posters, billboards, and more creative ideas.
According to Reuters, Venmo has ordered custom pizza boxes that encourage bill sharing with its tagline, “pony up on Venmo,” will distribute drink coasters at bars, and roll out pony-themed pedicabs in Chicago, IL, Austin, TX, Portland, OR, and Nashville, TN.
The ad buy is not only significant to the company, but to the wider world of financial services.
Venmo is the premier peer-to-peer digital payment app, popular enough among millennials to become a verb. But it’s not the only one. In fact, banks have been offering a “Venmo-Killer” for some time now.
Launched in 2011, clearXchange is a platform that allows users to use checking accounts to send money to other users with an email address or cellphone number. The service is operated by Early Warning, a company itself owned by a consortium of banks including Bank of America and JPMorgan Chase.
In August, the Wall Street Journal reported the app would undergo a branding change, from clearXchange to Zelle (think gazelle), to be made official in October. The name remains subject to change, but the product remains buzzworthy.
With the power of JPMorgan Chase and Bank of America — not to mention the checking accounts and other deposits — behind it, Zelle has the potential to capture an audience slow to adopt Venmo. That’s why Venmo’s largest advertising push is noteworthy, and well-timed.
P2P payments are becoming table stakes for financial institutions, a basic service that can then lead to other, deeper, product penetration. Banks and credit unions should want to offer that service and find a slice of that income. Venmo knows this. That’s why word-of-mouth advertising is no longer enough.
It needs us to pony up.