The payment service provider PayPal has hired Mark Grether, the former head of advertising at Uber, to lead a new advertising department.
PayPal hopes to boost its growth by building an advertising network based on the extensive data the company collects about its millions of users. This data includes the purchasing behavior and general spending patterns of consumers who use PayPal services such as the socially oriented app Venmo.
Mark Grether to Serve as Senior Vice President and General Manager of the Newly Created PayPal Ads Division. In this Role, He Will Be Responsible for Developing New Advertising Formats, Leading Sales, and Recruiting Employees.
In January, PayPal Introduced Advanced Offers, the Company's First Advertising Product that Utilizes Artificial Intelligence and its Own Data to Help Merchants Target PayPal Users with Discounts and Personalized Deals. This Model Only Charges Advertisers When a Purchase is Made. Online Marketplaces Such as eBay and Zazzle are Currently Testing this Product.
PayPal now plans not only to sell ads to its own customers but also to so-called non-endemic advertisers, i.e., companies that do not sell their products or services through PayPal. These companies could use PayPal data to reach consumers on other websites or connected TVs.
In the first quarter, PayPal processed 6.5 billion payments from about 400 million customers, as shown in the latest quarterly report.
"If you're someone who buys products on the Internet, we know who buys the products where, and we can use the data," said Grether. Consumers who use the PayPal credit card also provide the company with data from brick-and-mortar stores.
Buyers would by default be included in the new network but could opt out, according to a PayPal spokesperson.
In addition to data-driven ads, PayPal has also started placing some non-targeted merchant offers on Veneto. However, the company wants to avoid overwhelming the younger Venmo users, who see the platform as a kind of social network, with too many promotions.
Many Companies are Building Advertising Networks Based on the Data They Already Have on Their Customers to Place Ads for External Advertisers. PayPal Could Be Able to Charge Higher Advertising Rates Than Some Retail Networks as It Can Provide More Detailed Information About the Target Audience.
The Expansion of the Advertising Business Follows Last Month's News That JP Morgan Chase Will Allow Advertisers to Reach Users of Its Website and Banking App Based on Their Transaction Histories.
Some analysts, such as Andrew Lipsman from the consulting firm Media, Ads + Commerce, see in the development a trend where more financial companies could enter the crowded market for retail media.
This expansion comes at a time when PayPal is seeing a decline following the pandemic-induced highs. In January, the company announced the layoff of 9% of its global workforce to save costs. In February, the company's stock fell after executives expressed low earnings expectations for the year.
Despite this, PayPal's profit increased in the first quarter, and the company raised its annual forecast.
In addition to Grether, PayPal has also hired John Anderson, the former Head of Product and Payments at the fintech company Plaid, as Senior Vice President and General Manager of the Consumer Division. Both executives report to Diego Scotti, who left his long-standing role as Chief Marketing officer at Verizon last year and is now Executive Vice President, General Manager of the Consumer Division, as well as Global Marketing and Communications at PayPal.