Buy now, pay later brand Zip breaks into U.S. market with first creative campaign

Buy now, pay later brand Zip is debuting its first brand campaign, working with the R/GA team behind Reddit's Super Bowl ad.

Buy now, pay later brand Zip breaks into U.S. market with first creative campaign

Another startup brand is trying to cash in on the buy now, pay later craze. Zip, which was formerly known as QuadPay in the U.S., this week is out with its most substantial marketing campaign to date as it looks to steal market share from bigger players Klarna, Affirm and Afterpay.

The new push comes from the same R/GA team behind Reddit’s Super Bowl ad, a regional last-minute commercial that won a Cannes Lions award earlier this year. The brand is trying to raise awareness in the U.S. after Australian -based Zip bought QuadPay last year and renamed it Zip.

“We wanted to make sure people here knew who we were,” said Jinal Shah, who joined Zip as U.S. chief marketing officer last month, noting the Super Bowl work was a key reason why the brand chose R/GA for the project. “We knew we wanted something like that because for us, our path to break through was through creative and thinking differentlly about how we show up in the world.”

In a form of contextualized advertising, the campaign includes a series of 6-second ads that will piggyback off of other commercials. For example, if a song plays on YouTube, a Zip ad will air afterwards and advise viewers to consider purchasing live concert tickets with Zip. Similarly, out-of-home ads will run in select markets near certain properties like health clubs or restaurants, and include visual cues encouraging customers to “Zip” their way to a gym membership or fancy meal, for example.

Pepsi did something similar earlier this year with targeted media buys for its Zero Sugar soda. R/GA handled media duties, along with creative, for Zip.

“We want to take advantage of advertising that’s done by other brands to show, ‘By the way, whatever you saw in that ad, you can buy and pay later with Zip,’” said Shah. “That’s how we’re taking advantage of our surroundings, being more contextual and trying to drive that story home.”

Buy now, pay later financing allows consumers to receive the item but pay for it over time, often in four installments, and in some cases with no interest or late fees if paid on time. The option has risen in popularity in recent months, spurring big advertising investments.

Swedish buy now, pay later brand Klarna recently ran a big campaign with A$AP Rocky, following its Super Bowl debut with Maya Rudolph. Similarly, competitor Afterpay tapped Rebel Wilson for its largest brand campaign yet in May. Meanwhile, established payment brands such as PayPal and credit card companies including American Express and Capital One have all rolled out their own pay-in-installment options for customers.

According to a recent report from MediaRadar, an intelligence platform, buy now, pay later brands have spent more than $47 million on advertising in the first eight months of this year, a 189% rise over the year-earlier period.

Yet even as companies tout their own brands with fresh marketing, experts expect a shakeout. Earlier this year, Square said it will acquire Afterpay in the first quarter of 2022 for $29 billion. Quadpay, named after the four-payment option associated with the buy now, pay later category, was founded four years ago. Zip bought the U.S.-based brand in September 2020 and rebranded it over the summer into one entity.

While some brands charge interest and others do not, Zip sometimes will charge a transaction fee of $1 per payment. The company is promoting its own app, which allows customers to use Zip for any merchant transactions by issuing them a virtual credit card. App development is one way buy now, pay later brands are trying to boost their customer base, Shah said.