Retailers are under pressure to make their marketing budgets work harder, with impressions and clicks not always translating into purchases.
Cape Town-based buy now, pay later (BNPL) platform Happy Pay has publicly launched Happy Ads, an AI-powered advertising platform that generated more than R100m in merchant sales during its pilot.
The pilot delivered more than 268 million impressions and an average 20x return on advertising spend, meaning every R1 spent through the platform generated R20 in sales, according to the company.
Unlike traditional digital advertising models that charge for impressions or clicks, Happy Ads uses a cost-per-acquisition model. Retailers set the commission they are willing to pay and are charged only when a campaign results in a completed sale.
Advertising tied to actual sales
Happy Ads gives brands access to Happy Pay’s audience of more than 800,000 registered consumers and two million partner customers, with a further six million expected to join its network.
The platform combines product discovery, targeted advertising, payments and transaction-level tracking. Its AI recommendation engine uses shoppers’ browsing behaviour, purchase history and interests to determine which products to show them.
Each completed sale feeds back into the model, helping refine future recommendations. Customers can then check out using Happy Pay’s interest-free payment options or the retailer’s existing payment methods.
“Most digital advertising platforms sell attention and leave retailers hoping that attention eventually turns into revenue,” said Wesley Billett, co-founder and CEO of Happy Pay.
“Happy Ads flips that model. If we don’t generate a sale, the merchant doesn’t pay.”
Billett said the pilot’s sales figures demonstrate the potential of connecting advertising directly to purchases.
Partners can monetise their audiences
The platform is also designed to integrate into existing digital services, allowing audience owners such as banks, telecommunications companies and fintechs to add shopping functionality to their apps and generate revenue from their users.
Zapper has integrated the Happy Ads API into Zapper Shop, creating a new shopping channel within its app.
“The Happy Ads API powers our Zapper Shop. Integration was seamless, giving our users a new way to shop within the app and generating revenue for us from day one,” said Steve Smith, executive head of revenue growth at Zapper.
A different model for buy now, pay later
The launch forms part of Happy Pay’s wider strategy to build what it calls an ad-subsidised payments network. Rather than relying on consumer interest charges, the company says its model is funded by merchants benefiting from the sales and payments it facilitates.
By adding advertising to its payments network, Happy Pay aims to help retailers acquire customers and increase sales while continuing to offer consumers flexible payment options without interest or hidden fees.
“Buy Now Pay Later should be more than a payment button at checkout,” Billett said. “It creates one of the most powerful customer-acquisition flywheels in retail.”
Happy Ads is now available to retailers and brands across South Africa. The company says its reporting tracks impressions, engagement, conversions, sales and return on advertising spend, giving merchants visibility into campaign performance.
