Fintech companies are generating ad revenues from D2C brands
The interest from D2C brands to advertise on these fintech apps comes as these platforms have amassed a large captive user base and witness high daily user engagement rates
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In recent times, fintech companies have been attracting the attention of direct-to-consumer (D2C) brands, as they are now being considered as a potential advertising destination and customer acquisition engine.
Fintech platforms like Paytm, PhonePe, and Google Pay have a large user base, and brands are looking to leverage their popularity for advertising their products.
D2C brands are running offers on these platforms as the price of advertisements on traditional platforms like Google and Facebook has increased.
Paytm claims that it has 89 million monthly transacting users on its platform. Meanwhile, other rival players like PhonePe claims to have 440 million overall customers.
According to a report, the cost for 1,000 ad impressions on fintech apps is in the range of Rs 70-150. Moreover, 60-65% of the total advertising spending on these platforms is through direct brand partnerships. This means that no media buying agencies are involved between both the client and the platform. Additionally, nearly 75-80% of advertisers on these payment platforms are new-age D2C brands.
The rewards and coupons offered by fintech apps are also being used actively by D2C and consumer brands for advertising.
Brands can either choose to have a distribution partnership or a performance-based sale-conversion model within these rewards and coupons. The distribution partnership model includes the total users the rewards are shown to, while in the performance-based model, fintech companies charge a small cut of the amount that the user spent for these brands.
While brands are lured by the lower cost of advertising on fintech platforms, there are some disadvantages. D2C brands claim that these platforms work only as an engine to add incremental sales, and scalability remains a challenge. Brands cannot rely entirely on these platforms to fulfilling their sales targets.
Despite the drawbacks, D2C brands are still attracted to fintech platforms for advertising, and it seems that this trend will continue in the future.
In conclusion, fintech companies are generating advertising revenue from D2C brands, and it remains to be seen how this trend will evolve in the coming years.
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