Below, NewProgrammatic has prepared a shortlist of the most influential BNPL industry entities that offer eliciting advertising opportunities for worldwide brands.

Try the NewProgrammatic demo to discover how to boost conversions!

What are BNPL solutions?

Interest-free installments and flexible payment options are steadily becoming more important as changing users’ preferences have evolved in favor of Fintech solutions. Since BNPL providers have significantly increased their user bases, as well as the number of offered merchants, these platforms are currently more than valuable for advertisers.

BNPLs are user-friendly solutions that shifted from the status of market trends to serious competitors of conventional financing providers like traditional banks. As the name suggests, Buy Now Pay Later offers delayed payments for shopping online, giving users time to consider whether their purchase was the right decision, and prepare for the expense.

BNPL business models vary depending on the chosen platform, but the most prolific companies offer four-installment plans that are interest-free as long as users respect payment deadlines.

Who are BNPL users?

By offering interest-free installments, Buy Now Pay Later services appeal to audiences concerned about their spending and seek chances to utilize a privacy-oriented and cheaper format of consumer credit.

The popularity of these services is most visible among younger consumers from generations Y and Z. These users, who are currently setting trends in marketing, are known for their reluctance toward conventional banking solutions, loans, and credit cards. Studies show that 67% of Millennials do not have credit cards, and more people aged 18-34 are afraid of debt than of death or war.

Ascent’s study shows all marketers the extent of increasing adoption of Buy Now, Pay Later. Their 2021 research found that 55.8% of American consumers have used some form of BNPL services, and more than half of those who have not, believe they would try it within the following 12 months.

Buy Now Pay Later marketing opportunities

With this unoverlookable Buy Now Pay Later market growth, advertisers now have access to excessive, and well-converting traffic. Brands can find purchase-oriented users through precisely-tailored Search Autocomplete and Tiles Suggestions, directly answering their queries.

NewProgrammatic offers advertisers and brands a chance to access this constantly growing volume of traffic, and present the keyword-targeted audience with the intent-matched proposal. This applies to all advertisers, and not only the ones who offer BNPL payments. Key players like Klarna aren’t promoting BNPL merchants’ offers only, as the company dreams of becoming a search engine more than a marketplace.

What does it mean for brands?

Bidding for BNPL industry traffic is something that should be present on every Digital Marketer’s agenda in 2022. There are many perks for brands in terms of increasing brand safety, competitiveness in the market, making the brand more visible to customers, and reaching a purchase-oriented audience.

Make sure to read NewProgrammatic’s blog article on Brand-Safe Buy Now Pay Later Advertising in 2022, which presents an interesting perspective on the topic.

5 things to remember about Buy Now Pay Later traffic and conversions

Buy Now Pay Later offers have a rather characteristic audience that could be shortly described as purchase-driven. The further conclusion is that these users should be more than wanted by all advertisers, as their motivation for entering BNPL platforms is to either find some interesting offers or finalize the purchase.

Below, find some of the most interesting/important aspects of engaging with BNPL audiences. These should give all marketers a clearer view as to why it is so beneficial to have their brands displayed in vastly-growing search bars.

Growing user-base

Users are what drives the BNPL industry forward, and that is why it was not until the pandemic online shopping popularity, that Buy Now Pay Later platforms’ numbers really skyrocketed.

In the US only, and we would like to remind you that this market is still catching up to Europe, Australia, and New Zealand in terms of BNPL popularity, there were 45.1 million BNPL users in 2021. This is almost a quadruple what was seen before the Covid-19 pandemic, as in 2019 there were “only” 11.6 million users in the US.

More customers and users mean that advertisers can access a wider, more diversified, and yet still purchase-driven audience.

AOV

An Average Order Value (AOV) is an important indicator of campaign success, as the higher AOV there is, the more revenue for a brand from just one conversion. The fact that BNPL solutions are most popular in richer societies – Western Europe, The United States of America, Australia, and New Zealand – means that the shopping carts are more likely to be packed.

Klarna’s study shows that some brands could increase their AOV even as much as 33% just by implementing BNPL payment options, which is definitely something worth reaching for. With the same number of orders, the brand is simply able to generate more revenue. Increasing AOV means that with the same marketing efforts and spending, the brand generates higher ROI.

Volumes

The impressive transaction volumes are also something that should speak directly to advertisers’ hearts. This is a chain reaction, as the more users access the larger number of merchants, the more impressive the overall results will be.

The conservative projections show that by 2025 the global BNPL volume will rise to $680 billion. But some experts claim that by 2024 the US market only will provide $100 billion worth of transactions.

These rising financial BNPL performances mean that brands are able to increase their sales simply by offering their services and products to bigger and richer audiences.

Merchants number

Joining BNPL solutions by new merchants and advertisers is something happening every second. Sezzle (now acquired by Zip) shared information, that their platform offered as many as 47,000 merchants at the beginning of 2022. Klarna on the other hand boasts of how their 400 thousand worldwide merchant base is constantly growing.

An increasing number of merchants does not necessarily mean that it will be much harder for brands to reach new customers. With programmatic solutions like Search Autocomplete, everybody can access keyword-targeted, relevant audiences.

The biggest and most prolific worldwide luxury attire, sports, house decor, nutrition, and food brands have already decided to jump in on the BNPL wave. It’s a brand-safe and reliable source of traffic, and therefore even the companies that dominate usual SERPs understand the value brought in by a highly-converting BNPL audience.

Top-performing GEOs

As we already signalized in the AOV section, marketers should consider buying BNPL ad space, as it reaches the audience that comes from GEOs (countries and regions) considered by the industry as Tier 1. These are developed countries with high consumer needs and the highest possibilities for brand-safe and quality advertisers.

Scandinavia is home to BNPL solutions, as the pioneer, Klarna, originates from the Swedish capital, Stockholm. Nordic countries, alongside Germany and the United Kingdom, are not only one of the most developed in the world and Europe but also some of the most prolific BNPL-spenders.

Australia and New Zealand are home to some most cutting-edge BNPL solutions providers, too. This is not an accident that these, both richer and fast-developing societies, have become keen users of BNPL offers.

There is still plenty of area for BNPL traffic to grow in the United States of America, as the society there is slowly but steadily getting convinced of these solutions. Industry analysis shows that the market in the United States is expected to grow by more than 66.5% in 2022.

The Asia-Pacific region should be considered a potent field for BNPL development, too, and definitely, a place offering an incredibly big consumer base. But there is more time needed for these markets to fully realize the potential held by BNPL market opportunities. The BNPL spending in Vietnam reached $40 million in 2020.

BNPL service providers overview

As the BNPL industry is constantly growing, all marketers should be aware of the buying benefits listed above. The biggest platforms that are available for users and advertisers are definitely the most competitive, but also the most rewarding places.

With often occurring changes and acquisitions, it will be best to keep track of all the BNPL industry news. Agreements and mergers open major new possibilities for advertisers that should unquestionably be capitalized on.

Klarna Bank AB

Let’s start with one of the world’s leaders in the BNPL segment – Klarna. The Stockholm-based fintech giants started operating in 2005 and over almost two decades impressively expanded their global reach.

According to an official financial report published by the company, in 2021 Klarna dominated the market and managed to connect its consumers with more than 400 thousand retailers from all around the globe. Their merchandise volumes jumped to $80 billion from $53 billion in 2020 and $35 billion in 2019. That means that YoY the company noted around 151% volume growth, which only showcases how much trust they get from users, and how much need there is for the BNPL services.

Besides offering up to 4 interest-free installments, Klarna becomes a growingly important search engine used for finding the best-fit products. Their reports reveal that the solution managed to attract 147 million users from all around the world, and major brands like Nike, H & M Hennes & Mauritz AB, or ASOS are only some examples of brands that are present there.

PayPal in 4

As one of the biggest alternatives to traditional banking in terms of online payments, PayPal decided to offer a BNPL service to their 426 million customers. PayPal in 4 offers split payments to everyone who wants to use PayPal at checkout: 25% of the total price will be deducted from users’ accounts right away, and another 3 equal installments are due every 2 weeks.

The fact that payments could be controlled via the widely-owned PayPal app, and that the service is secured the same way that every PayPal transaction is, lures in millions of customers. By introducing the BNPL offer, PayPal immediately reached for a big Buy Now Pay Later market share, granting all of its users’ access to the service.

Thanks to that, over 400 million users have been granted access to BNPL payments available on all the websites that offer standard PayPal transactions. This should not be surprising that the service stormed the market, and according to C+R Research, PayPal is the most used BNPL provider (used by 57% of retailers) in the world.

We saw a 400% year-on-year rise in our volumes going through ‘buy now, pay later’ this past Black Friday [2021]. It’s booming right now. We had more than 1 million first-time users for the first time ever in the month of November.

Dan Schulman, the CEO of PayPal

Zip (previously QuadPay)

Australian BNPL giants Zip have completed the acquisition of US-based QuadPay service in Q3 2020, and a year later started merging the two brands together. While Zip is mostly focused on Australian traffic, QuadPay was one of the most prominent brands in the United States, and the merger enabled both companies to vastly expand their worldwide reach.

Zip is currently operating in 12 markets, and its 2021 annual report shows a 147% increase in revenue ($397.5 million), 176% transaction volume increase ($5.8 billion), and 248% customer number increase (7.3 million). A major part of this growth was possible by acquiring new partners including Sezzle, Spotii, Twisto, TendoPay, and Payflex.

QuadPay allows users to have their payments broken into four interest-free installments that could be paid off during a 6 weeks-long period. Zip, previously QuadPay, is used by some world-renowned brands to promote their products and services, and among those are the likes of Gamestop, Target, Airbnb, Booking, and Nike.

Afterpay

The Australian company offers a BNPL solution that has been branded as the most suitable for students thanks to its smart credit limits. The payments are split into four parts, and the user is required to pay the first 25% of the price immediately. The following three payments are due every two weeks.

The company managed to start cooperation with Google Pay in 2020 when it started providing the giant’s users with the possibility to use Buy Now, Pay Later model while shopping with Google Pay. This opens up whole new traffic possibilities for brands that want to be advertising on the BNPL platforms.

In June 2021, the Afterpay platform had now 16 million users and was cooperating with more than 85 thousand brands in Australia, New Zealand, Canada, the US, and the UK. Among those, users can find some renowned and well-established brands like Pandora, Crocs, Urban Outfitters, Adidas, Dr. Martens, and many more.

Affirm

Affirm’s services allow users to shop in their favorite places, both online and in-store with the possibility of paying back in 4 installment-free parts. The company’s Q4 report shows the quick growth that allows brands to have access to a wider range of Affirm’s impressions:

• Affirm claimed that their active merchants’ number grew to 29,000, which is a 412% increase. This happened also thanks to the company’s integration with vastly-growing Shopify.
• The active customer base grew by 97% and exceeded 7 million.
• There was an 8% growth in the number of transactions per average active user.

Affirm is a San Francisco-based company, and up until 2021, it operated on the market in the US only. In Q4 2021 it expanded to Australia, and even before that it announced an Amazon partnership for BNPL payments of $50 and more.

Laybuy

Laybuy Group Holdings Limited has a BNPL platform that is gaining immense popularity in New Zealand and Australia, both being growingly important Buy Now Pay Later markets. Kiwi-originated service was also introduced to the United Kingdom, with Gross Merchandise Value (GMV) there reaching a 38% YoY increase. For New Zealand and Australia, Laybuy has registered a 25% YoY GMV increase for January and February 2022.

As for the active user base, Laybuy is closing to a big milestone of 1 million. There are also over 13,400 merchants available for these audiences, and on a quarterly basis, both of these numbers rise. A projected 43-48% revenue increase in the 2022 forecast period explains perfectly why Laybuy has ambitions of entering more markets and challenging bigger competitors.

Compared to most major BNPL platforms, Laybuy offers a quite favorable installment payments model, where expenses are split into six weekly parts. Laybuy automatically charges the credit card submitted by the user.

Apple Pay Later

Although Apple has not released any final version of its BNPL product, it has been almost official that this kind of service will sooner or later become available for Apple Pay users. Especially since Apple Pay services are used on an everyday basis by over 500 million users, this could potentially be a game-changer for the Buy Now Pay Later industry.

The market impatiently awaits more news on that matter, as entering media buying opportunities with Apple BNPL services should be a viable option for all advertisers. But for now, we’re only suggesting preparing for the right moment.

How to start advertising on the BNPL provider platform?

In order to fully embrace the Buy Now Pay Later media buying opportunities, marketers will need a programmatic tool that helps them set up campaigns and access the highly motivated audience. NewProgrammatic solutions include smooth and user-friendly suggestions delivered via keyword-based Search Autocomplete functionality and Programmatic Tiles.

With these automated solutions, an advertiser is able to target a specific audience and reach it at the exact moment they require a recommendation as to where to finalize their purchases. All this without any privacy-violating third party data processing. The BNPL advertising with NewProgrammatic is based on intent-targeting, as it proves to be far more efficient than typical demographic targeting.

See how to increase sales, AOV, and brand visibility.
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The post Buy Now Pay Later marketing in 2022. Brands and market overview appeared first on NewProgrammatic Blog.

Search advertising is often associated with Google Ads only. However, Google is not the single provider of search ad solutions, and search ads don’t come in a singular form either. 

And although the search market is indeed dominated by Google, it’s still a form of digital advertising enabled by various search engines. And almost all of them offer a way to monetize their traffic. 

That’s why in this article we want to present a thorough overview of the search market inventory, talk about different types of search ads, explain how they work, and most importantly, help brand marketers understand how to utilize alternative search advertising solutions.

Search Autocomplete Ads

The first type of search ad we want to discuss today is one of the aforementioned alternatives — that is Search Autocomplete ads. 

Search autocomplete technology offers a unique approach to search advertising in which ads are triggered even before users complete typing the search keyword into their mobile or desktop device search bar. Autocomplete search ads usually appear right underneath the input field (e.g. web search engine bar or a marketplace search) providing the most optimal user experience by showing suggested ads/search results related directly to the searched phrase. 

Search Autocomplete Ads are available for both mobile and desktop devices. Platforms providing this specific search ad format are typically keyboard apps, marketplaces, browsers, and search engines. Although some search traffic providers host their own solutions, a variety of platforms and audiences can be accessed via performance marketing platforms allowing brands and marketers to instantly match with potential clients. 

Simply put, search autocomplete ads utilize the power of contextual targeting to display ads relevant to what the user is looking for, but more importantly, this specific type of search advertising provides marketers with brand-safe and privacy-compliant cookieless solutions.

Search Ad Tiles

Another underutilized way to drive traffic to your brand is working with Search Ad Tiles, also known as Suggestion Tiles. 

Search Ad Tiles allow marketers to display a logo of an advertised brand right in front of users’ eyes, exactly when they need it… or in the right context, one could say. This happens because search ad tiles are displayed in the form of a small icon right below the search bar or a text field your audience uses to enter the related keyword. Some placements can be fixed, and some can be dynamically displayed based on the set targeting. 

The dynamic tile placement works on a similar basis to the Search Autocomplete solutions explained above. In this case, ad tiles appear as soon as users start typing their search queries into a search engine bar or a search text field. Search Ad Tiles are available for both mobile and desktop devices and are provided by a variety of apps, search engines (Opera or AVG Secure Search), or online marketplaces.

Both Autocomplete and Search Ads Tiles are purely intent-based solutions. They help drive users to your website, right from the moment they engage with a search bar. Unlike with the usual search text ads solutions, there’s no middle step of displaying the general SERP. 

Overall, this is the most direct way for users to get what they want which makes Search Ad Tiles the ad format utilizing the fastest search-to-brand route available on the market.

Text Search Ads

Text search ads are the broadest category here, but one that cannot be overlooked. The most popular search text ads solution comes from the Google Search Ads platform, which dominates the search engine market with a 92.47% market share. They show either above or below organic results on the first SERP.

The mechanism behind search text search ads in Google is based on the second price auction. When many bidders place a bid, the highest bid wins, but rather than pay the set price for the bid, the bidder only has to pay $0.01 more than the second-highest bid. Google combines that with its Ad Rank algorithm that decides the position of your ads. The algorithm takes into consideration expected click-through rate, ad relevance, and landing page experience to decide the quality of your ad. If certain criteria aren’t met, the Google ads platform can decide not to show your ad despite a winning bid.

Search text ads are not exclusive to Google. In fact, other search engines such as Yahoo or Bing, or geo-specific options like Baidu and Yandex, also have their own search ads. Overall, they work similarly to Google’s search platform, often employing the second price auction and a form of ad ranking.

What’s more, Google, among others, offers responsive search ads (a successor to expanded text ads) where the algorithm tests up to 15 headlines and 4 titles to create the best combination for a given keyword or query.

Text search ads are a universal and advanced solution. They have many providers and the Google ads platform alone offers several variants, e.g. dynamic search ads; and additional features, e.g. ad extensions. But the availability and popularity are also what make search ads an extremely competitive field where the most expensive keywords cost $50 or more per click.  

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Shopping (Product) Search Ads

Search ads are by nature high-intent ads so it’s only logical to utilize them in the case of both shopping campaigns and brand awareness campaigns. Nonetheless, one of the most popular types of search ads is shopping ads. And how do shopping ads work? 

Shopping ads (also known as simply product ads)display a tile-like product preview on top of or on the side of the search engine results page. In the case of Google shopping solutions, product previews form a line right under the search bar. They correspond to the search query, just like the rest of the results do, but offer a richer format that includes a product picture, a price, and a source URL.

Google Ads is not the only ad network that makes running shopping campaigns possible. For example, Bing’s search engine also enables shopping ads on the right side of their search engine results page. Pinterest, on the other hand, has shopping ads that seamlessly blend with the rest of the inspirational pictures, with the exception that these ads lead straight to a products page where users can make a purchase. 

Among all the examples of shopping search ads platforms, a very prominent one is naturally the Amazon Advertising platform. Amazon is a product-based search engine which, in 2017, surpassed Google in the number of product searches. While this is not the most up-to-date data, there is no reason to believe that product searches on Amazon should be declining.

Amazon offers similar, although slightly inferior, tracking and optimization capabilities when compared to Google shopping ads. Still, it comes with plenty of advantages. To put it simply, the competition is smaller and targeting options are better, allowing for the most precise display of advertisements. What’s more, Amazon’s product targeting is the most unique and advantageous option that allows marketers to target by brand, star reviews, price, and Prime shipping eligibility.

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Video Search Ads

Video search ads, powered by Google Ads and hosted by the YouTube platform, are among the search ad types perfect for brand awareness campaigns. YouTube Discovery Ads appear on the top of YouTube video search results, the video watch page, or on the YouTube Home feed on mobile devices. These are not auto-playing ads. In fact, these look exactly like organic search results with video thumbnails, titles, and descriptions, with an exception of an ad tag. 

Because users have to click on the ads to actually view them, they are also called TrueView ads as opposed to ads that autoplay unprompted (which does not guarantee they were viewed, let alone intentionally). The last thing to remember is that YouTube Discovery Ads are only for brands that already have a functional YouTube channel. After all, the primary purpose of the campaign is to gather views of the video ad. Gathering subscribers or making sales are secondary goals.

Another example of video ads based on a search engine is Pinterest Video Ads. 

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App Install Search Ads

App Install Ads are a search-based ad format, most commonly used in mobile in-app environments. The two most prominent examples of this ad format are app install ads on Google Play and Apple Search Ads.

Google provides many options for install ads, however, most of them are display ads. The search-based Google Play Store listings are meant to aid in increasing the visibility and discoverability of your app. And with nearly 3.5 million apps in the store, that kind of help is often needed. The ads appear on top of the search results in the Google Play store and are matched based on keyword targeting with three options —  broad, phrase, and exact match. 

The Apple App Store is the second-largest app store in the world with 2.2 million apps. The purpose of Apple search ads is the same as their Google counterparts — to help users discover your app. This high-intent ad format offers keyword targeting and various options for displaying the ad. Your app campaigns can appear in a form of video, a selection of screenshots, or a plain form with text and an icon. The advertised app can be installed straight from the advertisement. 

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Display (Image Ads)

While the notion of display ads is completely different from search ads, the search advertising market doesn’t exclude expanded search formats such as Image Ads. An image ad or a display ad would usually appear in the form of a banner, interstitial, or full-page ad. But it can also be a search ad. 

The best example of an image search ad would be Pinterest, with search-based targeting. Pinterest, although it is a standalone platform used for inspiration, it’s also an image-based search engine. Hence, ads appearing among the organic search results come in the form of images, integrating seamlessly with the grid. 

What’s more, Pinterest is a platform where people look for inspiration and 46% of UK Pinners have discovered new brands or products on Pinterest. The demographics are leaning towards the female audience with higher incomes and the average age of a Pinterest user is 40 years old. 

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Search ads and brand advertising explained

As we mentioned at the beginning, search ads are currently an essential tool for brand marketers. This is because search ads can be hyper-targeted and directed straight at purchase-ready audiences. 

While your marketing strategy can include many ad formats and campaign types, search ads are currently the best solution for brands looking to gain quality leads that turn into paying customers. Let’s consider some benefits.

Benefits of Search Ads for brand marketing

• Specific search ad types can reduce the customer journey to a maximum extent – skipping the search engine results page and leading users from the search bar straight to the brand’s website.
• Search ads are contextual and directly related to the search bar input, hence, they provide a high-quality user experience that isn’t distracting or intrusive.
• The short path from the intent-focused search query to the brand’s website leads to an overall higher conversion rate.
• If your brand’s website is lacking in SERP positioning, using search ads is a faster way of increasing visibility than through the process of search engine optimization.
• Search ad platforms allow you to test your strategies in a quick and efficient way by providing you with actionable data on clicks and conversions. 
• Relying on programmatic advertising platforms offering search traffic inventory helps marketers maximize the reach and utilize the full potential of the available search market.

New programmatic solutions to revolutionize your business

What all search ad types have in common is that they lead the customer from the search bar through the search engine results page, and then show relevant ads right at the top as the most visible suggestions. There are, however, two ad types that skip the middle step. 

Search Autocomplete Ads, as well as Search Ad Tiles, are both types of search ads triggered the second customer starts typing in a query. These ads will appear there and then, right under the search bar field. There is even no need to press enter and wait for the search results to load. 

This is what makes such Google search ads alternatives a unique approach to a saturated and competitive market. This is also why and how NewProgramamtic solutions help performance marketers tap into a whole new search advertising market and get a headstart for the brands they promote. It’s also worth adding that both aforementioned ad formats work on the CPC cost model and offer worldwide inventory with robust targeting options. 

Apart from the main targeting options being Branded Search (redirecting users looking for the brand’s product straight to the brand’s website) and Generic Keyword Search (redirecting users looking for the brand’s or related products straight to the brand’s or a related yet authorized site), users can be targeted based on devices and locations. 

Please note there are no cookies involved in the process which makes Tiles and Autocomplete Search ads meet the highest standards of privacy.

Search Autocomplete Ads and Search Ad Tiles are simply a straightforward solution that works particularly well with an intent-driven audience, especially given the recent (and still growing!) shift towards product-specific marketplaces rather than broad search engine searches users now tend to perform.

Conclusions

What all search ads have in common is intent-based targeting. Users typing in a query into the search signifies readiness to discover, research, and finally buy a product. Search text ads are the most common type of search advertising so far, but the constantly evolving market and need for innovation called for new programmatic solutions to come onto the stage and take their fair share of the market. In a nutshell, global investments into online marketplaces keep increasing which gives way to more solutions providing marketers with a chance to match users with desired products exactly when and where they’re looking for them. 

If you’d like to try an alternative approach to search advertising, we welcome you to book a demo and find out how NewProgrammatic can prove to be exactly what your business needs.

Book a NewProgrammatic demo today!

The post 7 Types of Search Ads Brand Marketers Need to Know About appeared first on NewProgrammatic Blog.