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What makes Klarna’s ad business different: ‘We’re a retailer and a payments company,’ CMO says

Retail media is traditionally dominated by, well, retailers. But as access to customer insights becomes increasingly important for advertisers amid cookie deprecation and mounting privacy laws, other industries are hopping on retail media’s bandwagon.

Example: Klarna.

“Historically, we’ve connected merchants and consumers through our payments and ecommerce services,” said David Sandstrom, chief marketing officer at the payments company. “But we have so much data that we can now connect them through advertising as well.”

  • Klarna will have 42.8 million US users this year, nearly a fifth (19.3%) of all digital buyers, per our forecast.
  • Because Klarna has access to purchase data across many different verticals, it gives the company a more well-rounded view of how consumers are browsing and shopping.
  • “We’re almost a hybrid between a retailer and a payments company,” said Sandstrom. “We know that someone has bought something from Gap for $49, but it’s not just the SKU—it’s the color, size, fabric. We have full granularity into what people buy.”

This hybrid quality also helps Klarna provide advertisers with attribution across the full customer journey, said Sandstrom. “We understand the full funnel, from a customer seeing an ad to having made the purchase.”

Klarna recently partnered with PubMatic to give advertisers programmatic access to its native advertising inventory via PubMatic’s self-service ad platform, Convert.

  • The partnership rounds out Klarna’s media network, which also offers sponsored search ads and affiliate marketing capabilities.
  • “This is a new venture for us. We expect it to grow quite significantly in terms of volume, but also in terms of data sets,” he said, noting that the goal is to be able to segment data by region, verticals, etc.

However, Sandstrom urged advertisers not to over-personalize their ads and instead opt for relevancy.

  • “On our network, being super-personalized performs worse than being relevant,” he said. “What I mean by that is people tend to want to know what their peers are buying, they want to be inspired.”
  • For example, instead of targeting users with items based on past purchases (which may not be what a user is looking for), advertisers can use contextual cues or events, like the Super Bowl, or the Met Gala, to catch consumers’ attention.

This was originally featured in the Retail Media Weekly newsletter. For more marketing insights, statistics, and trends, subscribe here.