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Episode: PayPal Open Commerce with Dr. Mark Grether: Retail Media, Agentic Commerce at Marketecture Live

Host: Ari Paparo

Guest: Dr. Mark Grether, PayPal

Date: December 22, 2025

Episode Overview

In this in-depth vendor interview, Ari Paparo sits down with Dr. Mark Grether of PayPal to explore PayPal's expanding role in payments, retail media, and the evolving world of agentic commerce. The conversation delves into PayPal’s enormous data footprint, its new initiatives to empower small merchants with retail media tools, the integration of advertising across platforms like Venmo and Honey, and PayPal’s strategies for the future of AI-driven commerce. Grether offers unique insight into how trust, emotion, and scale shape the next phase of digital retail.

Key Discussion Points & Insights

PayPal’s Position in Global Commerce

• PayPal’s Scale & Ecosystem ([02:11]–[03:07])
  • Over 30 million merchants and 400 million consumers on PayPal.
  • Handles about one third of all global online transactions, offering a data set more extensive than Walmart or Amazon.
  • "From an advertising perspective, we're sitting horizontally across all the merchants... That makes us a really unique kind of proposition from a data perspective." — Dr. Mark Grether ([02:31])

The Challenge & Opportunity of Retail Media

• Fragmentation in Retail Media ([03:07]–[06:17])

  • Buyers face a fractured landscape when reaching consumers.
  • Smaller merchants lack the resources to build their own retail media businesses, unlike major retailers.
  • PayPal’s solution: Launching Ads Manager for SMBs—"a single unified advertising platform" ([05:32]) to aggregate SMBs and unlock new advertising inventory, enabling them to monetize site traffic in ways previously inaccessible.

• Survival & Competitiveness for SMBs

  • Monetizing eyeballs is existential for SMBs to compete with Walmart/Amazon and reinvest in lower prices or more advertising ([06:17]).
  • "If you're competing with like a Walmart and they have that revenue stream and you don't, you're not going to be able to offer the same prices..." — Ari Paparo ([06:17])

Monetizing the "Long Tail" of Merchants

• Classification & Technology ([07:06]–[08:30])

  • The diversity of SMBs on PayPal presents a similar challenge as the open web.
  • Solution: Build verticals within SMBs and use transaction data for smart targeting.
  • "We call it Open commerce. Right. And we will also build kind of our own verticals within the SMBs..." — Dr. Mark Grether ([07:40])

• Brand Safety & Demand

  • Despite greater diversity among SMBs, the intent to purchase remains consistent, minimizing complexity compared to large retailers ([08:30]).
  • SMBs are highly motivated to participate in retail media for the first time.

Advertising Across PayPal's Family of Brands

• Venmo as an Ad Platform ([10:55]–[11:56])

  • Venmo’s appeal: Young, spend-ready, Gen Z users.
  • High advertiser demand, with verticals from fashion to travel and even automotive.
  • "In October, we were already sold out in terms of real estate that we made available for advertisers.” — Dr. Mark Grether ([11:35])

• Honey’s Role in Retail Media ([12:29]–[13:38])

  • Honey (acquired ~4 years ago) goes beyond affiliate: it’s a powerful engine for purchase intent and catalog data.
  • Knows 80–90% of U.S. product catalog data via user purchases ([13:32]).
  • All this data enables precise targeting and closed-loop attribution.

• Audience Extension & Measurement ([13:38]–[15:00])

  • PayPal leverages data (the “transaction graph”) not only for onsite ads but also for offsite campaigns (CTV, PMPs).
  • "We can even run a CTV campaign and then measure the impact of CTV with the transaction graph for the advertiser." — Dr. Mark Grether ([14:34])

• Unique Market Share Insights

  • By sitting across many merchants, PayPal offers advertisers/CFOs a macro view on market share and spending efficiency ([15:00]).
  • "One of the cool things about PayPal is that as we're sitting across all the merchants, right, we can actually show advertisers not only how a single merchant is performing, but also how they are performing across all the merchants..." — Dr. Mark Grether ([14:59])

AI and Agentic Commerce

• PayPal's Vision & Current Efforts ([17:37]–[21:10])

  • Trust remains central in new AI-driven commerce (“agentic environments").
  • PayPal is working with AI/agentic commerce players to become the trusted payments backbone.
  • Honey can help collapse the gap between AI-powered recommendations and seamless checkout ([20:29])—boosting convenience for consumers and conversion rates for merchants.

• Ecosystem Integration and Democratization

  • Large AI/agentic platforms may partner with logistics and payments experts (e.g., Walmart x OpenAI), but many SMBs lack these tools.
  • PayPal’s mission is to democratize access to AI and retail media for the long tail of merchants ([22:44]).

• Fragmentation vs. Aggregation in Agentic Commerce ([23:20]–[24:22])

  • Some users will choose mega-platform AIs, others will rely on specialty tools like the Honey toolbar.
  • Shopping remains highly fragmented.

Agentic Shopping: How Much Will Consumers Outsource?

• Limitations of “Agentic” Shopping ([24:22]–[25:30])
  • Consumers might delegate routine, commodity purchases but will likely retain control on emotional or significant buys.
  • “If you really want to buy a new whatever suit or so, we may still want to have the final decision. Right?” — Dr. Mark Grether ([25:12])

The Next Five Years in Commerce

• Enduring Importance of Trust, Emotion, Humanity ([25:57]–[27:29])
  • Transformation will continue, but fundamental buyer behavior rooted in trust and emotion won’t change.
  • Brands must balance frictionless commerce enabled by AI with authentic, emotion-driven engagement.
  • “When it really comes to us human beings, the interactions with each other, the trust and all of that, the emotions, I don't think that's going to change.” — Dr. Mark Grether ([27:16])

Notable Quotes & Memorable Moments

• On PayPal’s Unique Data Power:

  "We see about one third of all online transactions globally, which means we see much, much more data than a Walmart or one of my former employers, Amazon."
  — Dr. Mark Grether ([02:31])

• On SMB Retail Media Opportunity:

  "It became very obvious that...on our platform, we have millions of SMBs who do not have access to the opportunity to build their own retail media business because they're just too small...And that then brought us to the idea...create a single unified advertising platform on their behalf."
  — Dr. Mark Grether ([05:00])

• On Agentic Commerce & Trust:

  "As consumers want to now make purchases in these kind of enchanting environments, they still need to rely on someone who they can trust with their money."
  — Dr. Mark Grether ([18:41])

• On Evolution vs. Human Nature:

  "The question for me is actually less about what is going to change. It's more a question about what is actually not going to change...we make a lot of decisions with our guard, with emotions, and that won't change even if AI is around."
  — Dr. Mark Grether ([25:57])

Timestamps for Important Segments

• [02:11] — PayPal's scale, transaction data, and competitive edge
• [03:29] — Launching unified ads for SMBs (Ads Manager)
• [06:17] — Why retail media is existential for small merchants
• [07:32] — PayPal’s “open commerce” approach for diverse SMBs
• [10:55] — Venmo as an ad environment; Gen Z usage
• [12:29] — Honey’s data, purchase intent, and role in targeting
• [14:34] — Closed-loop attribution and offsite audience extension
• [15:00] — Market share analytics for CFOs
• [18:14] — PayPal's agentic commerce vision: trust in AI-powered transactions
• [22:44] — Democratizing AI/retail media for small merchants
• [24:54] — Agentic shopping: what will consumers actually delegate to AI?
• [25:57] — The next five years: trust, emotions, and lasting fundamentals

Final Thoughts

This episode offers a comprehensive look into how PayPal is not only cementing its position as a payments powerhouse but is actively orchestrating the next wave of retail media and agentic commerce. The conversation highlights the democratization of sophisticated advertising tools for small merchants, the unique value of multi-platform consumer data, and the importance of trust and human decision-making in an increasingly AI-driven world.