Has negative press impacted the rise of Klarna?

Klarna, the buy now pay later platform loved by younger generations, has recently become the focus of a number of negative news articles.

The additional Buzz around Klarna appears, in some ways, to have positively impacted their brand image, with the image statement ‘Trustworthy’ increasing +14% in January

Klarna’s strategy for success has been based on offering a quick and easy payment option that allows customers to spread their money using a ‘buy now, pay later’ model. However, there is a growing concern around the brand’s lack of FCA advertising regulation, which may encourage customers into debt, or negatively impact their credit scores.  With this in mind, how has the recent media focus on Klarna impacted their brand health?

Overall, Buzz around Klarna has increased from December 2020 to January 2021, particularly amongst their target audience, 16 – 25 year olds, in which Buzz has increased +4% in January (16% – 20%). Whilst Negative Buzz scores have increased within the general population (5%-6%), they have remained flat amongst 16-25 year olds, suggesting that the negative news articles haven’t yet reached Klarna’s core audience. In fact, when looking at Positive Buzz scores, Klarna’s scores have grown +2% in the wider population (9%-11%), with the largest growth seen in 16-25 year olds, growing +4% in January (23% – 27%). Therefore, whilst more people are talking about Klarna, they are tending to talk more positively about the brand, particularly within Gen Z.

The additional Buzz around Klarna appears, in some ways, to have positively impacted their brand image, with the image statement ‘Trustworthy’ increasing +14% in January (19% Dec – 33% Jan), although this has seen a slight drop amongst 16-25 year olds (34%-31%).

Despite these seemingly positive results, overall Brand Love scores have in fact fallen, dropping – 4% in January (12% – 8%), in addition to a +2% increase in Dislike scores (17% – 19%). The decrease in Brand Love is even more pronounced for 16- 25 year olds, falling -7% in January (21% – 14%). However, amongst this younger age group, Dislike scores have almost halved (16%-9%), whilst Like scores have grown +5% (46%-51%). Crucially, for Klarna’s core target audience, this suggests that whilst Love scores amongst 16-25 year olds have dropped, they are simply moving from Love into Like or Indifferent, rather than into Dislike.

What does this mean for Klarna? Whilst Brand Love has decreased in January, the recent news articles haven’t significantly impacted Klarna’s short term brand health. Although it’s true that more customers are talking about Klarna, they are still talking in a positive way – particularly amongst Klarna’s target audience, 16-25 year olds. It may be the case that older readers are more likely to have seen the negative news stories published in traditional news outlets, leaving Klarna’s core audience unaffected, or it may be that any changes in brand health need to be tracked within a long-term timeframe. For both short- and long-term tracking, BrandVue can provide a monthly view of brand health.

To find out more about Brand Vue please click here, or download our Top 100 Most Loved Financial Services Brands report, click here.