Why retailers’ ads targeting millennials with Afterpay loans is a brand risk
Debbie O'Connor has noticed a worrying Afterpay ad popping up around Australia's stores. The problem is, Afterpay aren't the ones making it.
I saw an Instagram post recently that showed a poster in a shopping centre that read:
“Broke AF but strongly support treating yourself?”
It had the Afterpay logo at the bottom with the words ‘is now in store’.
With Australian household debt the fourth highest in the world, and a net national debt accruing interest of $31,664,835,069, it is clear that many Australians are struggling to get on top of their debt. This however is not a post about finances but rather about irresponsible advertising.
The words on the poster have also be used in social media posts. And while some may think that this is funny, the debt crisis and the affects that it has on lives is not as amusing.
Financial issues were cited as a factor in more than one in four marriage break-ups, and are considered the top cause of stress which leads to mental health issues such as depression and anxiety. The damage of this snowballs as statistics from Healthline show that 90 percent of people who commit suicide have a mental illness at the time of their death.
When you realise the damaging effect that this advertising can have on people, it really is unacceptable.
The other concern, is the younger demographic that is being targeted (I’m sure that some of my older readers would have had to Google ‘AF’ to understand what it is referring to).
Targeting young, highly vulnerable shoppers like this is outrageous. If they are getting into bad debt habits at a young age, how are they ever supposed to become responsible adult spenders?
Shame on you Afterpay!
But here’s the kicker. The poster was apparently not created by Afterpay, but rather by the store. The problem here is two fold:
1. Afterpay becomes guilty by association
Whether this is a poster created or approved by Afterpay or not is irrelevant. Their logo is the dominant branding on the poster and is promoting their business.
If they have supplied the copy for this poster along with their logo, then they need to take a long hard look at their business values and decide what kind of company they plan to be. If they haven’t endorsed this advertising, they need to reign in what advertising their logo is permitted to appear on.
Having an approval policy to determine what advertising is and isn’t allowed to be used will go a long way in protecting their brand against such irresponsible advertising.
2. Fool me once shame on me, fool me twice shame on you
When the Instagram post went up about the shopping centre poster, a follower commented that it wasn’t an Afterpay advertisement. The problem with this is that another company on Instagram was seen advertising exactly the same wording with the Afterpay logo in the same spot.
A quick scroll through Instagram shows that this poster had been shared multiple times by many Afterpay customers. An oversight? I’ll let consumers be the judge.
Don’t let your brand be negatively effected by the behaviour of others. If your logo is on any promotional material, you have a say in whether it gets published or printed. If it doesn’t fit into your brand strategy, then you have every right to put your foot down and get it removed.
Over to you Afterpay.
Debbie O’Connor is the founder and creative director of branding studio WRD, and CEO of The Creative Fringe.
I was browsing e-retailers last night to be served up ads on instagram this morning with the caption “Slay now, pay later, afterpay it”
These brands quite frequently feature the fact they have afterpay featured in their email marketing headlines as well.
The other major issue with afterpay is that I can go and create an account with fake details and rack up $1,500 worth of debt in minutes. The amount of under 18 girls I see in Facebook groups complaining that they can’t pay their afterpay and that they used a fake dob to create their account and are now scared they’re going to get in trouble.
Yes they should take some personal responsibility but why has afterpay allowed it to be so easy for an easily influenced minor to wrack up a large debt for their age that a maccas job ain’t going to pay off.
Afterpay has more to answer to than the questionable marketing tactics some companies are using.
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I hope the banking enquiry see’s this.
They’re already grilling the old GE Consumer Credit business, Afterpay and ZipMoney should be called up too.
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Great article – I’m working on a fintech app that’s designed to help millennials better manage their finances for the longer term. When I saw AfterPay hit the market, I commented that it was the antithesis of what was needed. Cynical, greedy marketing.
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Afterpay must have huge Bad Debts if there are no or slack credit checks with Afterpay if these people are not paying back their loans then surely Afterpay will soon be in financial trouble ?
I know the credit checks with ZIP are strenuous and protect the purchaser.
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You’d think with a banking royal commission on right now they’d be a little more careful; and NAB, by association.
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Actually only 15% of Afterpay customers have trouble repaying their installments.
If you’re complaining about Afterpay and any post payment system then you’re being very ignorant to the little card in nearly everyone’s wallet called a credit card. Maybe youth debt is a result of poor parenting?? Maybe it’s poor self control?? Maybe it’s the cost of housing, rent and living that means people have to pay for their cloths in four payments?? But please don’t blame Afterpay because all they did was offer a service that actually works very well for 85% of consumers. They didn’t hold a gun to anyone’s head and they certainly didn’t get you intoxicated. You can’t buy Alcohol or cigarettes and use Afterpay to pay for them later… but there is that little plastic card in your wallet for that… and then the question pops up… who owns Visa and Matercard? Well it’s your 4 big banks… maybe you should all be questioning your investment with them????
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Actually only 15% of Afterpay customers have trouble repaying their installments.
If you’re complaining about Afterpay and any post payment system then you’re being very ignorant to the little card in nearly everyone’s wallet called a credit card. Maybe youth debt is a result of poor parenting?? Maybe it’s poor self control?? Maybe it’s the cost of housing, rent and living that means people have to pay for their cloths in four payments?? But please don’t blame Afterpay because all they did was offer a service that actually works very well for 85% of consumers. They didn’t hold a gun to anyone’s head and they certainly didn’t get you intoxicated. You can’t buy Alcohol or cigarettes and use Afterpay to pay for them later… but there is that little plastic card in your wallet for that… and then the question pops up… who owns Visa and Matercard? Well it’s your 4 big banks… maybe you should all be questioning your investment with them????
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Free enterprise and duty of care do not have to sit together. You can only hope for the second. But you can’t slam a credit company because its legal product is used irresponsibly. Your lecture should include warnings to this young market about coffee and Tinder as well. Afterpay will have worked out the bad debt risk long before this article. If they fall over, they are too naive to have even started.
Of course retailers are advertising their available credit options. Why shouldn’t they use the Afterpay logo?
On the plus side, Afterpay is providing opportunities for startup traders and local lines who find the bank options leave them out of credit offering to their smaller market.
An exceedingly patronising article, particularly with reference to “ older readers” needing to look up AF. WTF?
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Afterpay are doing amazingly well, all credit to them. They’ve taken the traditional interest free purchase and made it work. Millennials have so little $, it is perfect for them.
An interesting first month for their new CMO Vicki Aristidopoulos because whoever is producing those ads will be in a mountain of trouble with ASIC, ACCC etc.
Afterpay’s share price has rocketed recently but there’s an increasing number of short positions:
https://www.shortman.com.au/stock?q=APT
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Possibly because the logo is a trademark and, therefore, permission is required to use it?
Afterpay could not approve those ads they are essentially illegal and cause issues with their AFSL which they need in order to trade.
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Explain the difference between racking up debt on a credit card vs Afterpay?
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“Only 15%” have trouble repaying? That’s actually quite a large proportion. And re credit cards, one point made by the author is it’s far easier to get an Afterpay account than a credit card.
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