PayPal, the digital payments giant, has announced its plans to create an advertising business that will utilize the vast amount of data it collects on consumer purchases and spending habits. With approximately 400 million users, PayPal aims to offer personalized promotions and ads to merchants and brands based on their transaction histories.
This move by PayPal is significant for advertisers because it means they will have access to sophisticated targeting and advertising across multiple channels. PayPal intends to serve ads beyond its own platforms, allowing advertisers to reach a wide audience from one platform.
To support this new venture, PayPal has made key hires. Mark Grether, former head of Uber’s ad business, has been hired as the Senior Vice President and General Manager of PayPal’s new PayPal Ads division. His role will involve developing ad formats and building out the sales team. John Anderson, previously in charge of product and payments at Plaid, has been hired as the Senior Vice President and General Manager of PayPal’s consumer group.
PayPal already offers an “Advanced Offers” ad product that uses artificial intelligence to provide targeted discounts to its users whenever they make a purchase. The company plans to expand this by selling ads to brands outside of its merchant network, which can then be displayed across the web and connected TV.
PayPal has reassured users that they can opt out of having their data included in the ad targeting. Mark Grether emphasized that they can leverage the data of users who are buying products on the web, allowing for effective ad targeting.
This move by PayPal follows in the footsteps of other finance giants, such as JPMorgan Chase, who have entered the retail media ad space by monetizing their customer data. However, it is important to note that PayPal’s ad business is still in its early stages and may not have a significant impact on the company’s core payments processing business, which has higher profit margins.
PayPal’s ad ambitions come as the company aims to rebound from recent struggles, including major layoffs and a stock slide after forecasting muted profit growth this year. The company is looking to diversify its revenue streams and tap into the advertising market, utilizing the vast amount of data it has on consumer purchasing habits.
In conclusion, PayPal’s new ad network powered by user purchase data has the potential to revolutionize targeted advertising. With access to a large user base and their transaction histories, advertisers can expect sophisticated targeting and advertising across multiple channels. While still in its early stages, this venture by PayPal is an important step in diversifying its revenue streams and rebounding from recent challenges.
