PayPal is developing an advertising sales business built on its user data.
The payments giant would create this ad network using data from user purchases as well as wider spending patterns from the millions of people using PayPal and Venmo, the company announced Tuesday (May 28).
To make this happen PayPal has tapped Mark Grether, one-time head of Uber’s ad business, to oversee the project as senior vice president and general manager of its newly-created PayPal Ads division.
“PayPal’s long-standing relationships with millions of consumers and merchants make the company uniquely positioned to create an advertising platform that is rooted in commerce,” the company said in a news release.
“Grether will join the company to build an advertising business that will help make merchants smarter to sell more products and services effectively, as well as enable consumers to discover more of what they love.”
The advertising business will include PayPal advanced offers platform, an ad product that employs artificial intelligence (AI) and company data to help merchants offer PayPal users discounts and other personalized promotions.
However, Advanced Offers only charges advertisers when consumers make a purchase. Now, the company is aiming to sell ads to both its own customers and to so-called non-endemic advertisers, or companies that don’t sell products or services via PayPal.
“If you’re someone who’s buying products on the web, we know who is buying the products where, and we can leverage the data,” Grether told the WSJ Monday, adding that PayPal credit card customers would also give the company data from brick-and-mortar retailers.
The company’s most recent earnings report showed PayPal processing 6.5 billion payments by roughly 400 million customers in the first quarter. Total payment volumes climbed 14% to $403.9 billion during the quarter.
The WSJ notes that many companies have built or are starting to build ad networks powered by data from customers to target ads for outside marketers.
For example, Chase last month introduced Chase Media Solutions, which will let advertisers target Chase customers with discounts and deals related to their spending history.
As PYMNTS wrote at the time, retail media networks like this one “have become a fixture, as retail giants, including Walmart and Amazon, have capitalized on these networks to sell advertisements over the years.”
Home Depot’s recent enhancements to its own retail media network also spotlights the competitive landscape for marketers’ retail media ad budgets.
Setting Chase apart is the company’s claim to be the “only bank-led media platform of its kind,” giving brands direct access to its wide-ranging banking customer network.