PayPal is gearing up to launch a new advertising division, leveraging the wealth of data from its extensive user and merchant base.
Utilizing the trove of consumer data it has amassed over the years through tracking user purchases and behaviors, as well as the transactions recorded via its subsidiary Venmo, the payment processing platform aims to establish a robust media network.
With an impressive volume of data at its disposal – processing 6.5 million transactions and serving 427 million customers in just the first quarter of this year, according to its latest financial report – PayPal is poised to go into the advertising space.
Diego Scotti, executive vice-president and general manager of PayPal’s consumer group and global marketing and communications, expressed confidence in the synergy between commerce and advertising, envisioning PayPal’s advertising platform as an indispensable marketing channel for merchants of all sizes.
Recent initiatives at the financial services company underscore its foray into advertising. In January, it introduced Advanced Offers for merchants, a feature that leverages PayPal data and AI to target users with tailored discounts and promotions.
Notably, merchants only incur costs for Advanced Offers if they result in consumer purchases.
Currently, platforms like Zazzle and eBay are testing this tool, according to a report from the Wall Street Journal.
Ben Riggle, North America managing director of Channable, an e-commerce marketing platform, anticipates that the ‘only pay for ads that convert’ model of Advanced Offers will be appealing to advertisers and facilitate PayPal’s rapid expansion in the advertising space.
Moreover, this approach is expected to drive revenue growth, as it enables PayPal to participate in both advertising revenue and payment transaction revenue, forming a profitable synergy as the advertising business scales.
