Once a niche payment concept, buy now, pay later (BNPL) deals have surged during the pandemic. According to an Ascent study, 56 percent of consumers have now used a BNPL service, up from 38 percent in July 2020. To understand how leading BNPL solutions including Klarna, Affirm and Afterpay are advertising on major social media platforms, BrandTotal analyzed thousands of their paid social media ad campaigns over a 90-day period, from July 13 to September 10.

These leading BNPL solutions rely heavily on social media to educate shoppers and it’s here where Klarna is leading the way when it comes to advertising. In BrandTotal’s analysis of paid share of voice (SOV), Klarna dominated with 51 percent of SOV, compared to 35 percent for Affirm and 14 percent for Afterpay. This ranking shifted, however, when between August and September Afterpay’s SOV reached 32 percent and Affirm’s 27 percent.

Given younger demographics grew up in a digital-first era in which discovering a brand and checking out are just a few Instagram clicks away, BNPL platforms know to strategically target younger audiences who are more open to this new form of tech-enabled payment model.

Among the three BNPL solutions BrandTotal analyzed, Klarna was the most likely to advertise to Gen Z on social media, with half of its ad impressions targeted to the demographic. By comparisons, 41 percent of Affirm’s impressions and only 8 percent of Afterpay’s targeted Gen Z. In addition, BrandTotal found that 83 percent of all BNPL social media ads targeted women, with just 17 percent targeting men.

Klarna also outpaces the other two on video views. According to BrandTotal’s data, Klarna saw 46.2 million video views across all of its paid social ads while Afterpay came in second with 1.7 million views, followed by Affirm with 1.5 million. Klarna’s dominance here could indicate its reliance on video across campaigns, which Gen Z is known to prefer over static images or text.

Lastly, BrandTotal found that Klarna and Affirm share very similar social media ad strategies; both allocate most of their social mix to Twitter, LinkedIn and YouTube. Afterpay, on the other hand, focuses primarily on Facebook and Instagram, with no investment in YouTube.

Echoing BrandTotal’s findings is recent data from Auriemma Group, which shows that while merchants have historically been the most common provider of installment plans at the point-of-sale, these BNPL providers offering short-term solutions are closing the gap.

Auriemma research found between Q1 2019 and Q1 2021, there was a 10+ percentage point increase in debit cardholders offered a BNPL plan in-store or online. In addition, more than half of those offered BNPL in a physical store (56 percent) or online (51 percent) say they enrolled in the option, again representing 10+ percentage point increases since Q1 2019.