Connect with us

Bussiness

PayPal just opened a new ad business. The exec leading it unpacks the plan to link advertisers with its trove of transaction data.

Published

on

PayPal just opened a new ad business. The exec leading it unpacks the plan to link advertisers with its trove of transaction data.

  • PayPal is set to launch an ad business, starting in the US.
  • The company intends to offer ads across its own properties, as well as other retailers.
  • It’s pitching advertisers on its trove of transaction data and the large audience of PayPal accounts.

PayPal is set to announce the official launch of PayPal Ads on Thursday. This new advertising business looks to help marketers tap into data on the billions of transactions that take place across its payments platforms.

Starting this year, brands and agencies in the US will be able to run ads across properties, including PayPal, the person-to-person payment service Venmo, and Honey, its coupon and cash-back tool.

Next year, PayPal also intends to let these advertisers purchase ads across the more than 30 million merchants that use its payment systems, opening up a much broader commerce-media ad network.

Mark Grether, SVP and general manager of PayPal Ads, who joined the company this year after leading Uber’s now-$1-billion ad business, will make the announcement at the Advertising Week New York trade show later on Thursday.

In an interview with Business Insider, Grether said the company is looking to address a key pain point in the fast-growing retail media ad space. An avalanche of retailers, apps, and businesses have launched advertising businesses in recent months, but marketers typically can’t buy campaigns across multiple sites and instead must deal with each company individually.

“With our cross-merchant data we are in a prime position to help the market to rationalize,” Grether said.

Around $1 in every $7 US ad dollars is expected to be devoted to the retail media space this year, according to Emarketer. Advertisers are particularly attracted to the space because they can get in front of consumers just as they’re about to make a purchase and retailers can offer unique data about whether their advertising led to a sale. That means it’s a high-margin business for the sellers of retail media ads because they can charge higher rates than the average web display ad.

“The newest offering from PayPal underscores the importance of incrementality: While data and signals tied to consumer purchasing are not necessarily new, the opportunity to infuse incremental moments of influence throughout shoppers’ journeys opens up real-time engagement for advertisers,” said JiYoung Kim, chief operating officer, of the the media investment company GroupM.

PayPal had 429 million active accounts as of June 30, a larger potential audience than most individual retailers — bar the likes of Amazon and Walmart, which are the leaders in the retail media space.

Grether said PayPal will also be able to offer advertisers insights, such as the market share of their products across various retailers compared to their competitors.

“It’s really powerful not only for the CMO but also for the CFO, to see how a retail marketing campaign actually influences market share,” Grether said.

Users can opt-out of their data being shared with advertisers, PayPal said.

PayPal’s other plans for next year include expanding from display ads to video, working on self-service ad software for its clients, and offering PayPal Ads in more territories, such as the UK and Germany. PayPal said the current ad stack has been built using a mixture of third-party software and its own in-house tech.

PayPal made its first foray into ads earlier this year, launching non-targeted in-app offers from brands like Nordstrom, Lyft, and Ticketmaster. It’s also recently launched a marketing push that aims to position PayPal and Venmo as rewarding payment methods.

PayPal’s advertising expansion follows the company’s appointment of CEO Alex Chriss, who has sought to make the company more nimble. Under Chriss, PayPal overhauled its leadership team, including hiring former Verizon chief marketing officer Diego Scotti, who Grether reports to.

Robert Webster, the founder of the consultancy TAU Marketing Solutions, said PayPal’s transaction data puts the company in a prime position to launch an advertising service. But he said it will need to tread carefully in order not to alienate and bombard customers. Plus, it’s launching late into an already crowded market.

“Mastercard already has a data business,” Webster said. “They will be somewhat also competing with other data vendors like Lotame, Dunn and Bradstreet, Experian, as well as potentially competing with retail media networks.”

Continue Reading