Klarna is part of a new breed of customer facing businesses that aren’t retailers in the conventional sense, but which are also finding that the access they have to consumers and their data is now the lucrative bedrock on which to build an ad business. Klarna is a payment company, pioneering Buy now, pay later interest-free delayed payments method, it has extended its business into being an app-based online shopping assistant.
What does that mean? Well, Klarna has turned its app into something akin to a virtual marketplace, where shoppers use Klarna to search for the items they want and Klarna not only finds them and relevant simulacra, but also does automatic price comparison and looks for and applies discount codes at checkout ( as well as offering to split the cost into monthly chunks).
This novel approach has become increasingly popular. Since its set up in 2005, Klarna has garnered more than 150 million global active users and 2 million transactions per day. It now has more than 500,000 global retailers integrating it technology solutions, including H&M, Saks, Sephora, Macy’s, Ikea, Expedia Group, Nike and Airbnb.
Such consumer reach and accompanying data – combined with such a roster of brands – has made it a fertile site for marketing and retail media and the company’s Ads Manager platform taps into this. Launched in the US in May 2023, Ads Manager was part of a wider strategy by the company to revamp its app, set itself up as a shopping assistant and to offer tools to help brands grow. The service was then extended to the UK and Sweden in November of the same year.
Consumers willingly share their information with Klarna in order to receive a more personalised shopping experience. Ads Manager ensures relevant content is being shown to these high intent consumers by enabling retailers to reach the shoppers who are actively seeking brands and products similar to their own. The platform offers brands an easier and more efficient way to advertise, from ad creation and audience targeting, to in-platform reporting for campaign optimisation.
Unlike platforms such as Google, Facebook and others, where consumer intent is on general search queries, interacting with friends, listening to music, or finding a job, consumer intent on Klarna is laser focused on shopping, making the Ads Manager a highly effective platform for retailers to reach shoppers at the point of purchase.
Additionally, contrary to marketplaces like Amazon, retailer ads on Klarna drive traffic and engagement directly back to the retailer with no intermediation between brand and consumer. Retailers in the US running ads with Klarna have already seen click-through-rates up to 25-times those of industry averages.
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