How Consumers’ Growing Adoption of BNPL Is Getting the Ad Dollars Flowing

The heady times for buy now, pay later just keep on rolling. Now, with 44% of consumers saying they have used BNPL options to make a purchase, according to personal-finance company Credit Karma LLC, providers of the point-of-sale financing have opened the ad-spending spigot. 

A new report from MediaRadar, a platform used by media planning, buying, and selling teams, shows that four leading BNPL providers spent more than $52 million on advertising between January and September, up 130% compared to the same period a year ago. The four firms studied were Affirm, Afterpay, Klarna, and PayPal.

The increase in ad spending comes at a time when consumers are purchasing heavily online. In 2020, e-commerce spending totaled $791.7 billion, up more than 32% from 2019, according to the U.S. Commerce Department. As a result, BNPL providers are betting that, by promoting their services, they will find consumers more amenable to BNPL loans, MediaRadar says. 

And consumers’ growing acceptance of BNPL is clearly attracting ad dollars, according to MediaRadar. Of the four BNPL providers in the study, Affirm had the highest growth in ad spend, followed by Klarna, Afterpay, and PayPal. 

“With more consumers shifting to online shopping and more interest in BNPL, we’ve seen a corresponding explosion in ad spend,” Todd Krizelman, MediaRadar chief executive and co-founder, says in a prepared statement. “It’s still early days in this category and each company is well-funded and fighting for market share.” 

When it comes to ad venues, Afterpay is spreading its dollars across television, print, and digital formats, according to MediaRadar. TV makes up 33% of Afterpay’s ad spend, print 4%, and digital ads 63%. Afterpay’s digital budget includes investments in social media (Facebook and Snapchat), OTT (streaming media as a standalone product), podcasting, display ads, and native, mobile, and online video, MediaRadar says.

Digital is also a large portion of PayPal’s advertising budget this year, according to MediaRadar. So far this year, PayPal has invested 22% of its budget in TV, 1% in print, and 77% in digital formats. Other digital formats include social media (Facebook), display, native, podcasting, online video, and OTT.