- Buy Now, Pay Later, gamers are spending millions on marketing to grow their share of an increasingly crowded marketplace.
- Some, like Klarna and Afterpay, try to stand out with celebrity ads and flashy deals.
- But they face growing competition from traditional players as well as regulatory control.
Try buying almost anything online today, and you’ll likely come across a button that lets you spread payments over time.
With buy now, pay later becoming a pervasive phenomenon, top players like Affirm, Afterpay, Klarna, and PayPal are spending millions to market their services as they vie for a larger share of the booming $ 91 billion market. .
The four companies collectively spent $ 52.4 million on digital, TV and print ads between January and September 2021, up 130% year-over-year, according to MediaRadar. Spending is expected to increase this holiday season. Companies spent nearly $ 14 million in November and December 2020, per MediaRadar.
Mike Mikho, marketing director of advertising agency Laundry Service, said BNPL brands are at a crossroads now that people are familiar with the concept and retailers are embracing it as well.
“The race is on, because now they are not only trying to win over more consumers but also traders,” he said.
Affirm, which went public earlier this year and rebranded itself over the summer, has directed its marketing messages to merchants as well as consumers, to appear more honest and transparent. In recent months, it has signed deals to integrate with leading retailers including Target, Amazon and Walmart.
Others focus on consumers by leveraging proven strategies like celebrity-focused campaigns and flashy deals.
Afterpay, owned by Square, called on actress Rebel Wilson for their 2021 summer “Pay Better” campaign and sponsored New York Fashion Week this fall. And Klarna shelled out $ 5.6 million to run a Super Bowl commercial featuring Maya Randolph, followed by a global campaign with A $ AP Rocky aimed at big buyers.
“One of the ways we influence preferences is by advocating for subcultures and finding ways to communicate how we complement their passions and interests,” said David Sandström, Klarna Marketing Director.
To regularly attract a wider range of consumers, Affirm, Afterpay and Klarna are also shifting their ad spend to traditional channels while strengthening their ad teams and agency listings. Afterpay has just set up a studio to do in-house advertising and put billboards and television at the heart of its Rebel Wilson campaign. And Klarna started working with agencies like DDB Nord, Noble People, and Movement Strategy.
But convincing new people to give their products a chance as the category gets more crowded isn’t the only challenge for these companies. They face increased scrutiny from regulators who fear that these services will lead people to accumulate more debt than they can handle.
They also face increasing competition from traditional lenders and credit card brands. Barclays and Alliance Data, for example, recently launched their own versions of the buy now, pay later options.
So, in addition to increasing their own advertising, buy now, pay later companies are starting to position themselves as more than just payment companies by allowing people to buy directly and sell ads on their apps. .
“Not only do you have to break the clutter, but also offer something different to stand out,” Mikho said. “Then tackling the advertising dollars seems to be a common thread.”