Nowadays, deferred payments come in many forms, but they all stem from an age-old concept. What began as the simple lending of seeds gradually evolved to a complex financial ecosystem that eventually became the streamlined system we know today.

In this post, we’ll look at the origin of deferred payment, its adoption by various industries, and further examine why it’s high time the marketing industry adopted this approach.

Let’s go back to the beginning…

Seriously. The very beginning.

The concept of deferred payment isn’t new. In fact, the earliest example of deferred payment dates back to over 4,000 years ago in Mesopotamia where farmers used loans to borrow seed. Whether or not deferred payments existed in other civilizations before this is a mystery, but we do have records that it’s been around since 2,000 BCE.

A little crazy, yeah?

Fast forward a few years and the first interest rates show up at the Sumerian temples in Mesopotamia, 1754 BCE. Later on, we see the first payday loan in Ancient Greece around 400 BCE. In ~1400 AD, however, the existing deferred payment models became outlawed due to authority from religion. Thankfully, we saw a new era of lending in the 1800s when the industrial revolution brought about the birth of international finance, and loans became available to the average person.

The mid-20th century saw the momentous shift into the realm of financial data, which was initiated in 1950 by Frank McNamara’s famous cardboard card (now known as a Diners Club™ Card). Only a few years later, the Bank of America launched the first version of the Visa card, and by 1959, FICO scores were already widespread. By the late 80s? Online banking was officially born

The 21st century: the digitization of finance.

Along with the explosion of everything digital, in more recent years there’s been a rise of alternative payment models incorporated in a variety of applications. The most notable being the Buy Now, Pay Later and Pay-Per-Use payment models.

In the 2010s, companies like Klarna and Afterpay emerged into the mix, challenging the status quo by providing services that make it easy for consumers to shop without the burden of bank loans or credit card fees. Their payment strategy allows consumers to experience the goods or services a company offers without post-purchase dissonance. Gone are the days when you would add 15 items to your shopping cart only to feel immense guilt once seeing the total (and usually end up canceling the order entirely). Nowadays, companies like these provide consumers options that make the grand total much more palatable. 

Another increasingly prevalent model operates on a Pay-Per-Use framework, which also minimizes the burden of upfront payments and employs a usage-based charge. The most familiar example of this is utilities like water, gas, electricity, etc., however, this model is popping up in countless industries such as transportation, entertainment, education, insurance, healthcare, retail, and more.  One recent example of this being insurance companies like Allstate starting to offer a Pay-Per-Use alternative to traditional insurance premiums.

The here and now.

In early March 2020, businesses needed to adopt strategies to prioritize customer stability and sustainable revenue growth more than ever. The COVID-19 pandemic threw an unexpected twist in everyone’s business plan – companies were forced to pay closer attention to consumer markets and react with very little notice. 

This shift in focus caused a wave of payment deferral programs to emerge to provide relief for those suffering from the unpredictable pandemic and an economy in anguish. In fact, according to a survey conducted by Northwestern Mutual, over a quarter of U.S. adults took advantage of payment deferral plans in 2020, including those for mortgages, rent, credit card bills, utilities, student loans, and auto loans.

But contrary to what it might seem, deferred payment plans should’t simply be a result of financial hardship. Instead of approaching the concept as an emergency backup resource, let’s look at it in the context of a highly effective tool for the marketing industry.

Let’s bring the marketing industry up to this century.

The world of marketing is complex and ever-changing: technology, trends, tactics, and the global environment do not remain stagnant. It’s imperative to keep up with new developments within the industry to maintain competitive advantage and find effective solutions, especially during uncertain times.

How might one do this?

We’d suggest utilizing the Kaddie approach to marketing spend. It’s more effective than traditional models, as it allows businesses significant flexibility and choice.

Traditionally, marketing spend is risky. Why? Because the standard approach requires a large upfront investment with zero guarantees on return. Which is especially risky during a time of constrained budgets and financial stress.  But the Kaddie model turns that on its head: you don’t pay for your creative until your campaign begins.  

We hate the whole concept of fees and we believe creative content should be just like paid media: you pay when you use it. Instead of charging a hefty upfront flat fee, we pull from trusted 3rd party metrics to determine the number of impressions per asset and charge a CPM for the use of our content. This pay-per-use model allows brands to use marketing creative as they wish, paying for assets that drive results and discarding the assets that don’t.

After all, digital platform algorithms like high-performing content — so much so, that they charge you less. By using the pay-per-use model, you’ll end up reaching more people for less cash. 

If that’s not #winning, we don’t know what is. 

Use pay-per-use marketing to grow your crop.

We want to give all companies, no matter their marketing budget constraints and desires, the ability to hit the ground running with creative content that works for their business, on their terms, with no upfront fees. Think of us as a modern-day Sumerian, lending you the necessary resources to grow your crop.  

To learn more about our model and how it could align with your unique business strategy, visit our Solutions page to learn more.

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