PayPal is launching an advertising business leveraging its extensive user data to drive growth.
The company has appointed Mark Grether, former head of Uber’s advertising unit, as senior vice president and general manager of the new PayPal Ads division. Grether will develop ad formats, oversee sales, and hire staff for the division.
Key Developments
- Advanced Offers: PayPal introduced its first ad product in January, using AI and user data to help merchants target PayPal users with personalized promotions. Advertisers are charged only when consumers make a purchase. eBay and Zazzle are currently testing this product.
- Data Utilization: PayPal plans to use data from its 400 million customers to target ads not only to its own users but also to non-endemic advertisers. This data includes both online and real-world purchase behaviors.
- Opt-Out Option: Users will be included in the new ad network by default but can opt out.
Strategic Hires
- Mark Grether: Leading the new ad division.
- John Anderson: Former head of product and payments at Plaid, now senior vice president and general manager of PayPal’s consumer group.
- Diego Scotti: Former chief marketing officer at Verizon, now PayPal’s executive vice president, general manager of the consumer group, and global marketing and communications.
Market Context
- Financial Sector Trends: PayPal's move follows JP Morgan Chase’s similar initiative to allow advertisers to target users based on transactional histories.
- Growth and Challenges: Despite recent layoffs and stock drops, PayPal’s profit rose in the first quarter, prompting an optimistic outlook for the year.
Broader Implications
- Retail Media Networks: PayPal joins other companies building ad networks using customer data to target ads for outside marketers. This trend is expected to continue growing within the financial sector.
- Ad Rates: PayPal might command higher ad rates due to its detailed consumer data, potentially grouping consumers by affluence or travel habits.
By leveraging its vast data resources, PayPal aims to carve out a significant presence in the advertising market, enhancing its revenue streams and capitalizing on its extensive user base.
