Afterpay hunts new media agency after AKQA-Ikon merger causes CommBank conflict
Afterpay is pitching for a new media agency following its decision to go head-to-head with the big four banks, launching banking app Afterpay Money just as CommBank enters the buy now, pay later fray, creating a direct conflict for Afterpay and CommBank's newly merged agency, AKQA Media.
What you need to know:
- Buy Now Pay Later (BNPL) leader Afterpay is on the hunt for a new media agency due to a conflict of interest between Afterpay and AKQA Media's biggest client, CommBank.
- Afterpay is expected to ramp up ad spend significantly in a bid to steal share from the big four banks with a new banking app called Afterpay Money.
Pay in play
Afterpay is on the hunt for a new media agency after the merger of WPP's Ikon and AKQA caused a direct conflict with Ikon's foundation client, CommBank.
Prior to the merger, AKQA won the account from Dentsu's now-defunct media agency Vizeum.
CommBank in March confirmed it is planning a direct assault on Afterpay's 3.4m customer base in a bid to slow the march of the buy now pay later sector into banking's territory.
CBA's payment plan card allows members to purchase and pay off the cost of goods over four payments, a direct lift of Afterpay's model.
Returning fire, Afterpay is launching a banking and financial services capability, targeted at millennials – Afterpay Money.
Details on Afterpay's Money project are light. However, Mi3 understands the concept and its marketing strategy will play a major role in the pitch process.
Afterpay currently spends a few million dollars a year on paid media, but the company is expected to up its spending in a bid to capture a greater share of voice with its new product – and see off the might of CommBank.
Last year it became one of the first partners to sign on to Westpac’s cloud-based banking-as-a-service platform, providing users with banking capabilities such as transaction accounts. It's unclear how its Afterpay Money product will impact this arrangement.
It also launched its own payment card, a contactless Mastercard stored in a Google Pay or Apple Wallet, which replaced the barcode system of shopping in-store. All of these are expected to be part of the brand's marketing focus going forward.
The business has been on a rapid growth trajectory since listing on the ASX in 2016 with its 3.4m users now spending an average of $150 per transaction.
However, its stock has taken a serious dip over the last three months, peaking at $158.47 in February and dropping down to $95.45 (May 26). The decline has led to major shareholder Blackrock selling down its 10 per cent stake in the fintech firm to 2.15, leaving founders Anthony Eison and Nicholas Molnar as the single biggest shareholders..
While it remains to be seen who wins in the CommBank-Afterpay turf war, AKQA Media has little to ponder. CommBank is worth in excess of $50m annual media spend.
The merger of Ikon and AQKA has also left WPP with less wiggle room when it comes to rehousing conflicting media clients, though this will likely change under new global ownership, with fewer barriers between media investment arm GroupM and the wider business.
Afterpay has been approached for comment. AKQA Media declined to comment.
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