The third largest US credit card issuer, Citi, has agreed to acquire a cardholder rewards platform provider and will use that company’s technology as the backbone of the newly launched Citi Commerce Media platform.

The purchase of Kard Financial—terms were not disclosed— saves Citi from building key assets needed for its commerce media platform and also brings personnel with more than a decade of experience.

Competitors JPMorganChase (Chase Media Solutions), American Express (Amex Ads), and Capital One (Capital One Ad Solutions) already have commerce media networks.

Kard Financial’s assets include a cloud-native platform that uses spending data to create personalized offers to cardholders. The process takes the concept of card-linked offers (CLOs), which have been part of the US card industry for 20 years, to a deeper level.

Card-linked offers generate immediate sales based on a discount delivered at the time of purchase. That discount is provided by the merchant and is typically supplemented by the credit card issuer’s interchange fee.

While cardholders continue to embrace CLOs, they are believed to prefer personalized offers. Issuers see personalized offers as customer retention tools as well as opportunities to increase cardholder spending.

Commerce media networks appeal to the chief marketing officer (CMO) at a retailer because they build brand awareness. Unlike CLOs, commerce media offers don’t necessarily need to provide cardholders with a discount.

CMOs prefer that their advertising dollars aim at a targeted audience, such as an active credit cardholder. Traditional channels including television and social networks make it hard to quantify a return on investment. CMOs and other ad buyers are shifting their spending away from traditional channels and towards commerce media networks. In particular, financial services industry-owned commerce media networks are growing in popularity.

Kard Financial, which has been in business for 11 years, has contracts with 90 national merchants in the US as well as 30,000 local and regional merchants. Those sellers will have the opportunity to become part of Citi Commerce Media. Merchants that participate in Kard Financial’s rewards platform include CVS, AT&T Wireless and Hydro Flask.

Citi could add to that group the bank’s private label credit card business partners that include American Airlines, Best Buy, Costco, Macy’s, Home Depot and others.

There are 9 million cardholders currently connected to Kard Financial’s rewards platform, customers of companies including Tilt, Varo and Lolli. Those cardholders could join more than 70 million Citi cardholders at Citi Commerce Media.

Working with cardholders and merchants enabled Kard Financial to develop the rewards personalization algorithm Citi will use for its commerce media network. Citi will enhance the algorithm with data gathered from its Mastercard, Visa and American Express co-branded and private label customers.

Citi has decades of experience working with merchant partners, which should assist in building Citi Commerce Media. Additionally, data provided by the broad cross section of co-branded card and private label card customers Citi already supports is expected to strengthen the customization algorithm it acquires from Kard.

Paid media ads generate revenue for card issuers from merchants that want to be on a commerce media platform. This will be a plus for Citi, whose credit card portfolio revenue is skewed toward finance charge income.