A few years ago it would be considered by many a wishful thinking, but today it’s just as simple as ever.

The first BNPL platforms emerged in 2005, but only in the last few years have they become quite important for the e-commerce industry. Naturally, where’s demand, the supply follows, hence top brands decided to quickly follow the new buying model and, of course, capitalize on it.

And those looking to capitalize on programmatic media buying can now benefit from the BNPL hype as well.

In this article, we’re taking a closer look at how brand-safe programmatic advertising solutions can help your business get more exposure with BNPL platforms… even if you’re not there.

BNPL 101. What are the Buy Now, Pay Later platforms?

In order to fully embrace the potential that is being offered by BNPL platforms, every marketer needs to understand the mechanisms behind it. These platforms are solutions that allow customers to make purchases without the need to pay for them right away at checkout. In fact, BNPL gives users the possibility to have their orders shipped right after the transaction and pay the money back to the platform in full or in accordance with installment plans.

Although the Buy Now Pay Later model of payment could resemble a standard bank loan format, it is not associated with it, nor a credit card balance. What needs to be widely understood, is that the best BNPL solutions are mostly free of interest, and offer the highest extent of Fintech-driven safety for all parties. No steps include a major financial institution or a bank. And in most cases, interests, too. In 2022, fintech solutions are much more welcome and will only keep on changing the retail industry as we know it today.

How can a brand benefit from BNPL advertising?

An insightful marketer should understand how to use the characteristics of the BNPL audience in order to elevate sales, and earnings, accordingly. The industry has already learned how to tame programmatic advertising possibilities, and use those to win specifically targeted ad impressions. With BNPL it has become possible to precisely find an already purchase-driven audience that does not require convincing to spend money. What it needs is a suggestion on where to do so, and shoppers will gladly accept accurate recommendations.

For example, NewProgrammatic allows advertisers to access the BNPL media buying model, offering advertising solutions that make this process intuitive and efficiently presenting users with subtle, but really helpful keyword-based ads even before their query is fully typed in.

Buy Now Pay Later advertising is not for BNPL transactions only

Although Buy Now Pay Later offers are core to the BNPL platforms’ operations, they are not a necessity for a brand offered there. This should be remembered by advertisers and brands – a company does not need to have a Buy Now, Pay Later system implemented in order to be displayed on the effective BNPL traffic sources.

Like in the example we gave above, while creating a programmatic campaign, brands are able to use the precise BNPL targeting and reach the highly-converting users without exactly offering Buy Now Pay Later transactions. This way they are able to fully capitalize on audience preferences, have access to a purchase-driven user base and advertise in a brand-safe and respected environment.

Intent-based targeting boosts conversions

Marketers from all niches are highly aware of the fact that their brands’ performance will improve once their marketing efforts are correctly targeted. And although the traditional, demographic-based marketing approach has been a go-to strategy for a long time, it has been proven to be less effective than finding the right, highly-converting audience based on their intent.

Identifying user behaviors online and offering the ads to the people who actually seek proposals in that matter has become a crucial part of modern ICP (Ideal Customer Profile) building. And with BNPL platforms it has become possible to get access to detailed profiles of people who are already looking for solutions offered by the marketer’s brand.

With that knowledge and proper programmatic campaign creation solutions, a brand is able to prioritize those purchase-driven BNPL platform users, elevating conversions, sales, and profits. In fact, a well intent targeted campaign may require a smaller budget to perform better than broader, RON-type advertising.

A higher Average Order Value

Klarna’s insights suggest that implementing BNPL could impressively increase the AOV (Average Order Value), too. For some brands, the increase of AOV could be as much as 33%. This is due to the fact that with Buy Now Pay Later’s prolonged payment period, a consumer is able to afford more products. It also elevates the sense of financial stability.

Reaching the customer at the perfect moment

Timing is a key feature of programmatic advertising, and the BNPL model allows brands to reach their target audience exactly at the moment they expect it to happen. This applies especially to the NewProgrammatic advertising solutions, as they directly answer users’ queries before they finish typing them.

As a result, marketers are able to find the best converting audience by simply reaching out to the people who are most likely to become customers as they are already purchase-oriented.

Brand visibility and becoming competitive

In order to be able to make sales, a brand needs to find a way to jostle with competitors for user engagement and attention. Increased brand visibility and tapping into your competitors’ niches are on every marketer’s agenda. And that can be easily achieved through advertising on BNPL platforms.

Brand familiarity has always been an important aspect of building a position both in local and international markets. If potential customers are aware of the brand’s existence and offer, it will be much more convenient for advertisers to present the results.

Various marketing and user-behavior studies utilizing eye-tracking technology found that internet users will more eagerly click on familiar brand names while conducting their searches. The extent to which such findings apply is quite impressive, as according to Secret Life of Search research, 82% of internet users choose familiar brands as their first-click option.

This leaves marketers of smaller, and less recognized brands with a hard nut to crack. On one hand, typical SERPs on common keywords become unavailable for them, as most often they cannot compete financially with the giants. On the other hand, building brand awareness becomes harder if users tend to focus on familiar names.

The solution could be, again, BNPL advertising, allowing brands to become visible by skipping the SERPs altogether.

It increases brand awareness and brings purchase-driven customers to the landing page. See, how NewProgrammatic could help your brand increase its reach.

User expectations for a BNPL provider

The popularity of BNPL solutions is not a coincidence, it’s a direct response to what the audience expects. This applies mostly to younger generations of consumers that are highly literate with technology and hence seek smooth user experience, tend to be very brand-oriented, and do not enjoy the thought of loans. Today’s users also value their privacy and appreciate a well-timed effort-saving suggestion. With that being said, companies that follow these trends will be able to effectively attract customers.

This enabled industry to forge a model that is beneficial for everybody. On one side, programmatic advertising on BNPL markets attracts the consumers who enjoy delayed payment opportunities, and will gladly take a suggestion as to what brands to focus on. On the other side, there are advertisers who now have access to a highly purchase-convinced brand-safe audience, which can elevate their campaign’s efficiency.

There is a structural shift going on in payments more broadly because of the changing behavior of the next generation. As the Millennials and Gen Z spend more, that will drive that spend to these more modern offerings.

Jason Orthman, Hyperion Asset Management (for Australian Financial Review).

Where are BNPL solutions most popular?

It’s safe to say that BNPL adoption is at its early stage in the USA and Europe, as Buy Now Pay Later transactions have not yet become the driving force in worldwide e-commerce. It only accounted for 1.6% of total e-commerce sales in the United States of America in 2020, but the projections suggest that it could reach 4.5% by 2024.

European markets are not homogenous in that matter, as Sweden, the UK, and Germany emerge as leaders in the BNPL e-commerce payments. This should not be surprising for the industry, as Sweden is actually home to BNPL. Klarna, the pioneer in Buy Now Pay Later services, has been founded in Stockholm. The region of Europe, just like the USA, opened up to the BNPL solutions, and reports from Q4 2021 only confirm that. According to the BNPL Survey, in Europe, the industry will expectedly grow by 54.7% in 2022.

In the breakdown of domestic e-commerce payments, right behind Scandinavian countries and Germany, are Australia and New Zealand. Once again, those are highly innovative regions in terms of Fintech and greatly developed countries in general. New Zealand and Australia together made up 20% of the global e-commerce market share in 2020.

Precise suggestions

There is a fine line between what could be perceived as intrusive advertising, and an anticipated query suggestion. Modern users expect accuracy and good timing, and providing exactly that is a way of gaining their trust.

To attract more consumers and conversions, the industry needs to focus on advertising in brand-safe conditions, where it is part of an established environment that a platform presents suggestions to its users. As those recommendations are part of a deal between a purchase-oriented audience and the BNPL solution provider, they are highly expected.

This is an effective synergy that leaves all the parties in the marketing equation satisfied. Thus, by neglecting BNPL traffic and conversions, marketers and brands repudiate trendy and highly rewarding solutions for market reach.

The reluctance toward debts

Having witnessed a financial crisis once every few years, Millennials and Gen Z representatives have developed a fear of financial instability connected with the unpredicted financial market behaviors. Younger audiences do not see loans as a solution to their needs. That is why financial liabilities with third-party companies, and not banks, are a much-appreciated opportunity for them.

According to American Psychological Association’s study, people between the ages of 18 and 34 are more scared of debt (34%) than of death (20%) and war (17%). Having been raised in relatively safe times, new customers perceive the financial trouble they witnessed watching their parents struggle with as a more perilous circumstance.

That is why more than half of Millennials (67%) do not have a credit card at all. These users need independence, but it does not change the fact that they still enjoy flexible payment options. The difference between them and their parents and grandparents is that Millennials and Gen Z require more transparency and security.

The modern way to do it is to use buy-now-pay-later. It’s consumer-friendly. It’s not unfair. It doesn’t have any fees. It’s really transparent. It’s often mobile and digitally available for online shopping.

David Sandström, Klarna’s Chief Marketing Officer (for Verdict.co).

Covid-struck e-commerce market

There is no doubt that Covid-19 has heavily changed the way consumers, brands, and marketers need to operate on the market. With people losing jobs, and brands seeking major savings, both sides of a previously well-cemented system needed to adjust to the new reality.

The first thing that most consumers did when the pandemic broke out, was to suspend all extra spending. In times of uncertainty, BNPL platforms provided exactly that – a possibility to save money while not being forced to postpone shopping.

The statistics show that perfectly. Adobe conducted e-commerce-focused research that highlighted how Buy Now Pay Later platforms grew 215% YoY in the first two months of 2021. Moreover, BNPL service providers have noticed that customers are placing orders 18% larger on average.

This directly benefits the brands, as by offering their products and services on BNPL platforms they are able to elevate sales, capitalizing on user behaviors. But advertisers should bear in mind that 65% of BNPL transactions include payments of less than $500. 

Credit Karma’s 2021 research shows that as much as one-third of BNPL purchases (32% of those) are for $100 and less. Younger audiences, Millennials, and Gen Z, mostly use BNPL for more frequent, but less valuable acquisitions. Big-ticket item purchases worth $3,000 or more are more common among Gen X and Boomers(+). Respectively, 11% and 17% of these users have used BNPL solutions for purchases of $3,000 or more. 

First-party data security

Another result of having younger generations create market trends is a major focus that has to be put on user privacy. Third-party data trading is not welcome anymore, as audiences are highly alert to what happens with their information. This transmits to how modern programmatic advertising needs to be conducted, and this is where NewProgrammatic and BNPL platforms come in handy.

This combination offers safe, yet precise penetration of the highest-tier audience without any need for third-party data processing. Users consciously agree to Buy Now Pay Later platforms for processing their data so that ads are precise and well-tailored.

The BNPL platforms do not inform advertisers about user profiles, and therefore protect the audience’s data. NewProgrammatic ads are keyword-based. This means that in a split second when the user is typing their query, a precise ad is being matched to them.

For more information about Cookieless advertising for a cookieless world, we recommend reading NewProgrammatic article on the topic.

What major BNPL brands should advertisers pay attention to?

The BNPL segment of e-commerce has been constantly growing due to user preferences, market changes, and an increased interest in safer, cookieless solutions. That is how the industry has been able to attract new business partners and widen its user base, offering even more traffic to the advertisers.

Due to the fact that volumes and conversions are crucial in process of advertising, all brands should get well accustomed to the most popular BNPL solutions. Mainstream companies offer, in fact, the widest possibilities, and really valuable traffic.

The below set of most popular brands in the BNPL industry is a great starting point for all advertisers who seek to explore these possibilities.

• Klarna
• Zip (previously QuadPay)
• Afterpay
• Affirm
• Laybuy
• PayPal

Conclusions

With the pace of development in the BNPL niche and the new possibilities that this segment offers to the advertisers, there is no reason why any marketing specialist should ignore BNPL traffic. And the future seems to be looking really bright for these fintech services, as more customers, especially from younger audiences, trust leading BNPL solutions.

More than certainly, brands in 2022 should not be forgetting about entering the BNPL advertising for all the opportunities:

• Advertising on a cookieless basis without any third-party data nonconsensual processing
• Becoming fully compliant with modern user preferences for online shopping
• Offering well-timed and contextually relevant advertising
• Reaching purchase-oriented audience
• Effective competition against other brands
• Increasing brand awareness and conversions at once
• Embracing the brand-safe advertising

Does your brand want to elevate the sales and increase its visibility?
Check out the NewProgrammatic demo!

The post Brand-Safe Buy Now Pay Later Advertising in 2022 appeared first on NewProgrammatic Blog.

Mixing fake news with genuine digital advertising is not what any brand wants. That’s why it’s important to educate yourself on brand safety issues, and this article is written with that purpose in mind. 

What is brand safety?

Brand safety is taking measures to ensure that a brand’s digital marketing campaigns won’t appear next to any content that is deemed inappropriate, illegal, dangerous, or radically controversial. For example, content promoting illegal drugs, containing hate speech, or exhorting violence towards a particular social group would be deemed non-brand-safe. Moreover, websites containing potentially controversial keywords (e.g. black, gay, covid-19) could also be considered as potentially brand unsafe.

Brand safety is a long-existing issue that came to prominence in 2017 and was further highlighted in 2020.

The most infamous brand-safety incidents occurred in 2017. Google overlooked the monetization of offensive content on YouTube and through the Google Display Network. Later the same year, it was discovered that more violent and sexualized content was being monetized on YouTube. The two weren’t the only incidents occurring in 2017. Due to many other oversights that happened at the same time, the advertisers immediately stopped or limited their spending on non-search-related ad formats. Brands such as Guardian, AT&T, Verizon, Starbucks, Walmart, and more pulled their ad campaigns from YouTube.    

Although the events brought on many new changes and improvements in how YouTube content is moderated, some troubles resurfaced again in 2019, resulting in more boycotting from many brands. The advertisers weren’t the only ones affected. The purge has led to the demonetization of YouTube channels (some unfairly so) because of the content of the videos.  

Moreover, the topic of brand safety doesn’t usually stand alone. There are, in fact, two connected terms that should be known to marketers, media buyers, and anyone taking brand safety measures seriously. 

Brand suitability relates to the promotion of content on websites that are in agreement with the advertiser’s values while not necessarily being controversial or harmful. Brand suitability regards mostly the tone, the audience, and the kind of message the company propagates. 

Brand compliance relates to following guidelines and laws existing in a given area, e.g. local restrictions on gambling ads, site restriction on political content, or age restrictions disallowing advertisements of adult content or alcohol. Disobeying such laws results mainly in fines.

Why is brand safety important?

While it might be assumed that advertising is separate and independent from the content of the page where it appears, that is not entirely the case. Consumers create associations and while that can work in your favor when forming partnerships with other well-established brands, it’s been proven to have a negative effect via association with inappropriate content.

Consumers associate brands with the content they appear near as an implied endorsement of that content. A negative implied endorsement can have long-term impacts on brand equity for years to come.  

A good reputation of the brand is crucial to the success and prosperity of the business. Consumers are generally more likely to interact with a brand if the ads appear beside legitimate content. There is also a common belief held by the consumers that it’s the brand’s responsibility to position itself among the highest quality of content. Otherwise, the majority of polled consumers said they would stop using a brand if it appeared next to fake news or offensive content, according to a study by DoubleVerify. 

Furthermore, positive or negative associations have a direct impact on the performance of your digital marketing campaigns. In a case study undertaken by the IPG ad agency, ads placed on credible news sites saw a 9% reduction in CPM and a staggering 143% higher click-through rate than a control campaign. This effectively proved that using brand safety vendors creates an impression of quality and reliability among consumers leading to more genuine interest.

Lastly, first impressions matter. While a long-established brand might not suffer big losses in ad revenue from a single incident (and might even come back to the publisher, just like some companies boycotting YouTube came back later on), a smaller brand needs reliable sources to build credibility.

What are the brand safety measures?

Although it’s nearly impossible to measure brand safety by numbers, a set of criteria can be used to assess how safe a certain ad placement really is. 

Ad format/platform

Each ad format, platform, or ad placement carries a certain risk. In order to upkeep a brand’s reputation, it’s crucial to be aware of the risks and know how to avoid them. When it comes to ad display mediums, some are safer than others. For example, mobile in-app advertising is one of the most brand-safe solutions. That’s because the environment (the content of the app) is in most cases completely controlled. With additional targeting or blacklisting options enabled, the risk of safety violations is trivial.

When choosing an ad platform, make sure to check what kind of publishing partners your DSP works with. To give you an example, here at NewProgrammatic, we only pick partners that deliver both in the categories of user privacy as well as brand safety. Our ad formats come from trusted apps, browsers, and search engines such as Opera, Xiaomi, and Samsung. 

On the other end of the spectrum, we have, for example, native ad DSPs. Native ads appear on various sites with new content published daily. It’s impossible to control what kind of content appears around every ad placement, making them a non-brand-safe ad format.

Context

Unsafe content appearing alongside ads is what causes brand safety violations. This is usually reported by users and consumers at which point bad press for the company might be unavoidable. Context, unfortunately, is very difficult to control. Most of the time brands rely on the brand safety technology implemented by the publishers or advertising agencies. 

Environments within apps are the easiest to control. Websites and social media platforms can vary in provided safety measures, depending on the implemented solutions and the nature of each platform. In the case of advertising on news websites, key credibility factors include whether news platforms avoid deceptive headlines, correct or clarify errors, and differentiate between news and opinion.

Brand suitability

While brand suitability is a distinct concept it also plays a crucial role in brand safety. Depending on the brand’s target audience, the advertising campaign can vary in tone and values. While a health supplement brand wouldn’t want to appear next to an article on the uselessness of health supplements, an ad for a sports clothing brand with a target audience of teens and young adults wouldn’t blend in too well on a website on activities for seniors.  

In this case, publisher transparency on data and audience breakdown is critical in creating a brand-safe and suitable environment.   

Brand safety vs. ad reach

The issue of brand safety vs. campaign reach is another thing to consider. While using some ad formats and advertising methods (influencer advertising, banners on news sites, social media), filtering out the inventory can significantly limit the available audience. Advertisers who turn to elaborate blacklists (of keywords, channels, or publishers) are at risk of blocking a lot of the wanted content as well.

The BS technology is also labeling large swaths of mainstream sites’ pages as “unsafe” resulting in ad revenue being suppressed — e.g. “21% of economist.com articles, 30.3% of nytimes.com, 43% of wsj.com, and 52.8% of articles on vice.com are being labeled as “brand unsafe”. 

As sometimes separating the brand name from the other meaning of the word (Jaguar the car vs. jaguar the cat) is very difficult, there is a need for more advanced technology. Using context to determine the overall topic of the page, as opposed to URL only, is a good first step. 

​​“Brand safety has had some unfortunate, unintended consequences for publishers as it’s given them less inventory [that] they’re able to monetize…”

However, there are new contextual solutions on the way that are supposed to make it easier for the industry to remain brand-safe and brand-suitable without losing a significant portion of the inventory.

What can you do to ensure brand safety?

Brand safety in digital advertising is something not to be taken lightly. It affects the brand’s reputation and consequently the ad revenue and sales. There are, however, common strategies for gaining more control over where the brand ads appear. Let’s find out what their advantages and disadvantages are.

Whitelisting and blacklisting

This is something we’ve already mentioned. This is also one of the most popular brand safety practices. Blacklisting and whitelisting is the easiest way to keep marketing efforts on a narrow path of suitability and safety. By providing a whitelist, companies can choose who to compete with and what other brands they want to be associated with. However, this will limit the incoming traffic significantly.

On the other hand, by providing a blacklist they can avoid undesirable associations. However, similarly to whitelisting, it can cause ad reach to be significantly limited. Because of excessive keyword blocking and because of ambiguous keywords, ads can end up hidden from the wrong audiences, and sites can be wrongfully labeled as unsafe.

As mentioned by IAB, the need for more advanced contextual matching tools is propelled by the unavoidable mistakes in keyword matching. 

Private deals 

Because of the incidents with Google and YouTube in 2017, programmatic PMP deals have become much more popular. The immediate consequence was that 74.5% of digital display ads were run via private marketplaces in the US. 

PMP programmatic advertising is somewhat in between an open exchange and buying direct. It allows advertisers to set pre-bid targeting (as well as keyword blocking and whitelisting) and choose the inventory selectively. Private deals coupled with brand-safe ad formats are one of the best ways to ensure a high level of visibility while retaining safety. 

Buying direct

Buying direct from a publisher is a good option, as long as the publisher is open and transparent about their brand safety credentials. The publisher site should be fool-proofed against bot traffic, invalid traffic, shady practices, and the ‘dirty dozen’. The last point would require a multi-factor verification system for every article published on the site. Making sure the publisher has an automated semantic content analysis or a manual safety checkbox for every new article are additional steps that can (and should) be taken to ensure you are getting your money’s worth in safe ad placements. 

Use brand-safe ad formats 

Lastly, the best possible way for advertisers to protect the brand reputation is to use contextual or intent-based advertising. This way your ad will only appear in the context of keywords you want to target, be it brand keywords or generic keywords.

Moreover, since the ad tech industry is moving towards cookieless, privacy-oriented ad formats, contextual advertising has been highlighted as one of the best ways to get your message across while remaining compliant with many existing and upcoming laws. 

Conclusions

Although the topic has been brought to light as a consequence of Google’s and YouTube’s transgressions, it’s been on the minds of advertisers since the popularization of digital advertising. 

Most brands protect themselves by using whitelists and blacklists, however, such technologies are still deeply flawed and carry the consequences of limited ad reach and faulty exclusion of safe sites. Another good option is tightening the relationship between advertisers and publishers. However, as long as retargeting is used, there is no way to ensure an ad wouldn’t follow a consumer from a legitimate site to a darker corner of the web.

The perfect brand safety detection technology doesn’t exist yet. But brand-safe ad formats are already here.

Pick NewProgrammatic and play by the brand-safety rules.

The post The importance of brand safety in digital advertising – brand-safe solutions. appeared first on NewProgrammatic Blog.