Will PayPal’s New Ad Business Pay Off?

By Jonathan Baker

In what appears to be a trend among well-known brands, online payment system PayPal is starting its own advertising business.

PayPal soon to become AdPal

Yes, the iconic brand which provides customers with the ability to make quick and convenient financial transactions is now prepared to enter the advertising arena. PayPal’s move comes shortly after JPMorgan Chase embarked on creating its own media company. This new advertising division of PayPal will be known as AdPal. How will this operate?

First-party data will be used to gain first-rate results

The plan of action is to utilize data of millions of PayPal (and Venmo) subscribers to build and boost this new enterprise. As reported in Media Post, this will be an ad-sales business that will use subscribers’ first-party data and purchasing patterns as the foundation for audience targeting.

AdPal’s advantage

Considering the extensive amount of PayPal subscriber data on file, advertisers (read: AdPal) will be able to zero in on high-intent prospective customers, thus shortening their path between browsing and purchasing. Indeed, the Media Post article points out that PayPal has the potential to provide more advanced targeting opportunities than retail media, thanks to an exclusive platform.

Advancing with the PayPal Advanced Offers Platform

PayPal Advanced Offers is the company’s resource that ensures the close matching of products to customers and also serves as a pay-for-performance ad system. These two advantages are projected to attract advertisers eager to become part of the PayPal network.

Revenue from two places

If a store or merchant does not have an advertising network, available data and in-stock merchandise are not completely monetized. If the AdPal model works, PayPal will be able to benefit by collecting advertising and payment transaction revenue, as observed by Ben Riggle of Channable, a data fee management company.

As far as advertising goes, could PayPal succeed as well as Uber?

Spearheading AdPal is Mark Grether, who previously led the advertising division of Uber. Under Mr. Grether’s guidance, Uber Advertising became a $1 billion business that encompassed over 500,00 advertisers. Could lightning strike twice for PayPal/AdPal? With Mark Grether’s expertise, complemented by the tools and resources at PayPal’s disposal, the chances are excellent.

Which well-known brand will be next to branch out into advertising?

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