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American Express Leverages Spending History, Location For Mobile Deals You Actually Care About

My Offers taps what AmEx calls the “spend graph” to give cardmembers access to deals and discounts at nearby merchants. And it knows your mom couldn’t care less about getting 50% off tickets to a three-day electro-fest.

American Express Leverages Spending History, Location For Mobile Deals You Actually Care About

When 1-800-Flowers fails and the local bakery is out of cupcakes, desperate, last-minute Mother’s Day shoppers turn to the one bastion of hope left: Groupon, LivingSocial, Google Offers, and any other daily deal service accessible in one click. There’s just one problem: The deals are rarely, if ever, relevant. No, my mom does not need Taekwondo lessons, paintball reservations, Lasik eye surgery, or tickets to a three-day electronic music festival.

To address this pain point, American Express is launching later today its own mobile offers engine to give cardmembers access to deals and discounts at nearby merchants. The engine, called My Offers, will tap into AmEx user spending histories and location data–what the company refers to as the “spend graph”–to rank offers by relevance. “In an increasingly crowded marketplace, where consumers are bombarded with daily deals, we saw an opportunity to help…by curating meaningful offers,” Josh Silverman, AmEx president of U.S. consumer services, said in a statement.

Through the company’s mobile app, cardholders will have access to a dashboard of offers that will look familiar to AmEx users who have already synced their cards with Foursquare, Facebook, and Twitter. Deals can be added to one’s card with a single click, and redeemed without friction. For example, if you spend $10 at Dunkin Donuts, you could get $5 back through a statement credit.

But what could really separate AmEx’s offers is the data it has to make relevant recommendations. Spending history provides incredibly valuable data–everything from first-time purchases to geo-location to repeat transactions–and AmEx has fed this data into its engine. The company has created “similarity scores” for merchants on the network to boost relevancy.

“Trillions of comparisons have been made,” says Luke Gebb, VP of global network marketing. “As an example, think about a town where there are two restaurants right next to each other. One restaurant attracts customers from far and wide because it’s renowned; the other restaurant is a local diner. These two restaurants will not be considered very similar in similarity score: That local diner may actually look more similar to a hardware store that mostly serves the local population, whereas even if you live 10 miles away from the town, that restaurant that attracts people from where you live is going to be much higher ranked.”

In the same way that Seamless learns what types of food and meals you most enjoy, AmEx will be able to learn from your transactions and the offers you most often redeem. It will also be able to pull data from the offers you found through its social partners–Facebook, Foursquare, Twitter–which will make the service especially powerful going forward.

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To keep up with the data, however, AmEx will need more merchant offers to keep recommendations relevant and fresh. Baskin Robbins and FedEx are some of the national brands signed up for the program, but “we’re now going into the local markets now,” says Ed Gilligan, vice chairman of AmEx. Nearly a dozen offers from local bars and restaurants in New York and Los Angeles will be available at launch.

“You can look at our app now and see all the offers you have regardless of where you’ve synced your card,” Gilligan adds. “That not only makes it simple for cardmembers to know what offers they have, but makes it easy for merchants to come to one place and let us help do their digital marketing for them.”

[Image: Flickr user Kamshots]