- Cross-border payments company Remitly boosted its advertising budget last year with a two-fold goal: to build its brand and attract new customers, CEO Matt Oppenheimer said in an interview.
- Seattle-based Remitly increased online ads, posted on social media sites such as Facebook and YouTube, to drive measurable customer acquisition, what it calls “performance marketing.” It also advertised in places like airports, to build brand awareness more broadly. Most of the ads are for performance marketing.
- “We’re doing very targeted brand marketing to, again, kind of water that tree to grow that fruit to make our performance marketing even more effective,” Oppenheimer said in an interview last week.
With the increased marketing, Remitly has sought to expand its client set. That’s more the goal than increasing use of its services by existing customers, Oppenheimer said. For most of Remitly’s customers, the payments they’re sending, often to friends and family, are for non-discretionary needs like “basic living expenses, for emergency medical expenses, for college tuition,” he said.
Remitly’s marketing expense, which includes advertising, rose 24% for the first nine months of last year, over 2022, to $159 million, as revenue jumped 47% for the nine-month period to nearly $680 million, according to the company’s most recently filed quarterly report with the Securities and Exchange Commission. Nonetheless, the company hasn’t been profitable, posting losses for the nine-month periods in both years, the filing said.
“We understand performance-based marketing should have relatively short payback periods (measured by new users) while the benefits from brand marketing are typically realized over time,” analysts at the financial firm William Blair said in a Jan. 2 note to clients.
Aside from attracting customers, Remitly may draw potential acquirers too, according to the William Blair report. The financial firm included Remitly on a list of companies that may be attractive acquisitions because their stock prices have declined over the past year. A spokesperson for Remitly declined to comment on that possibility.
Oppenheimer sees plenty of room for growth, with the company having penetrated only 2% of the market, he estimates.
Remitly in November extended a partnership with Visa after first partnering with the card network giant in 2019. In 2021, it also won investment backing from Visa and sold shares in an initial public offering that same year. Nonetheless, it has also retrenched in some areas too, pulling back on a digital bank account service called Passbook last year.
Remitly aims to attract those remittance users who may have become dissatisfied, for whatever reason, with rival services, offered by competitors that include MoneyGram and Western Union. When consumers go online looking for alternatives, Oppenheimer expects his company’s ads may catch the consumer’s eye.
The bulk of remittance services are still handled offline, by small convenience stores in the U.S. as well as similar style bodegas in other countries. That’s because customers must have a high degree of trust in the outlets they’re working with, given the personal information provided and the transfer of money, Oppenheimer said.
Recent global economic trouble doesn’t bother Oppenheimer because his remittance customers tend to be very “resilient,” with a need to send money to other places regardless of financial challenges, he said. “There’s a predictability and a priority and a resilience of our customers,” the CEO said.