Podcast Summary: Next in Media - "Should PayPal Be Building an Ad Business?"
Released on June 11, 2025 | Host: Mike Shields | Guest: Dr. Mark Grether, SVP and General Manager of PayPal Ads
Introduction to PayPal's Advertising Venture
In this episode of Next in Media, host Mike Shields engages in a comprehensive discussion with Dr. Mark Grether, PayPal's Senior Vice President and General Manager of the newly launched PayPal Ads division. Dr. Grether brings a wealth of experience from his previous roles at Amazon and Uber, where he significantly grew their respective ad businesses. The conversation delves into PayPal's strategic entry into the advertising space, leveraging its vast transaction data to offer unique advertising solutions.
Understanding PayPal Advertising: Commerce Media vs. Retail Media
Dr. Grether begins by elucidating the foundational elements of PayPal Advertising. He emphasizes that PayPal operates as a two-sided network, connecting approximately 400 million users with 30 million merchants globally, which accounts for about 25% of all global commerce.
Dr. Mark Grether [01:34]: "If you think about PayPal advertising, the starting point for us is that we have relationships with about 400 million users globally. We have about 30 million merchants on our platform… Similar to how Facebook has the social graph and TikTok has an interest graph, we have the transaction graph."
He differentiates PayPal's approach from traditional retail media by highlighting the expansive scope of their "transaction graph," which captures consumer purchase behaviors across multiple merchants and categories, unlike single-retailer platforms that have limited transaction visibility.
Dr. Mark Grether [04:04]: "We have a much broader, much deeper understanding of consumer purchase behavior that we can leverage for transactions… we can provide closed loop attribution back to the advertisers across all the merchants where they are."
Navigating Trust and Data Privacy in Financial Advertising
A significant concern addressed is the intersection of financial data and advertising, especially amidst increasing privacy regulations. Dr. Grether reassures that trust is paramount for PayPal, a principle they've upheld since their inception.
Dr. Mark Grether [05:39]: "Trust and safety of our data is front and center when it comes to running the advertising business."
He further explains that PayPal's robust security infrastructure ensures that transaction data used for advertising is handled with the utmost care, positioning it as the "new cookie" in the advertising ecosystem.
Dr. Mark Grether [07:10]: "When it comes to payment, I obviously must triple check. You can't get it wrong."
Target Customers and Market Positioning
PayPal Ads primarily serves its vast network of merchants but also extends its services to CPG advertisers and various other categories like retail, fashion, and travel. Agencies play a crucial role as key partners, appreciating PayPal's cross-media capabilities and the ability to provide a holistic view of advertising performance.
Dr. Mark Grether [08:03]: "Agencies are super excited to work with us because we can help them with this kind of cross media view."
Scaling PayPal Ads: Lessons from Uber and Future Strategies
Drawing parallels from his tenure at Uber, Dr. Grether emphasizes the importance of a clear vision and internal alignment when scaling an advertising business within a non-traditional ad company. This clarity ensures that both consumers and merchants find value in PayPal's advertising offerings.
Dr. Mark Grether [13:54]: "It's important to have a very clear vision for what PayPal advertising is… It helps them to create more engagement, creates more stickiness of our financial products."
He also discusses the implementation of "offsite ads," which leverage PayPal's transaction data across various merchants to provide more targeted and efficient advertising campaigns, including full-funnel marketing and closed-loop attribution.
Dr. Mark Grether [11:38]: "We can provide closed loop attribution back to the advertisers… So pay attention to that, we're almost kind of sitting Horizontally, bringing all merchants together with our transaction."
The Role of Connected TV (CTV) and Future Advertising Channels
Addressing the evolving landscape of advertising channels, Dr. Grether highlights the potential of Connected TV (CTV). He asserts that for CTV to be effective, advertisers need closed-loop attribution, which PayPal is uniquely positioned to offer due to its extensive transaction data.
Dr. Mark Grether [12:49]: "If you are a player in the TV world, you definitely have to have either your own transaction data to provide the closed loop attribution back to your advertisers… That's the key difference between us and the Commerce Media player."
Embracing AI and Agentic Commerce in Advertising
Dr. Grether shares his insights on the integration of Artificial Intelligence (AI) and agentic commerce into the advertising ecosystem. He anticipates a future where AI-driven platforms facilitate the entire shopping journey, from discovery to transaction, within closed environments.
Dr. Mark Grether [16:22]: "With the rise of AIs and agentic environments like ChatGPT, we need to support our consumers when they make a transaction in an agentic environment… They trust PayPal to provide a secure and trusted payment method."
He also addresses concerns about AI potentially diminishing the role of traditional advertising agencies, arguing that human strategy and differentiation will remain essential.
Dr. Mark Grether [19:34]: "Brands want to have levers, different strategies, different data inputs. There's still a human element because you need to have the differentiation."
Conclusion: The Future of PayPal in the Advertising Landscape
The conversation wraps up with an optimistic outlook for PayPal Ads. Dr. Grether underscores the company's mission to enhance consumer engagement through strategic advertising while fostering stronger merchant relationships.
Dr. Mark Grether [15:36]: "It's not about the money, it's about how can we help consumers to use PayPal more often and how can we help merchants to sell more."
Mike Shields thanks Dr. Grether for the insightful discussion, highlighting the promising trajectory of PayPal’s foray into the advertising domain.
Notable Quotes:
- Dr. Mark Grether [01:34]: "We have the transaction graph… similar to how Facebook has the social graph and TikTok has an interest graph."
- Dr. Mark Grether [05:39]: "Trust and safety of our data is front and center when it comes to running the advertising business."
- Dr. Mark Grether [12:49]: "Full funnel makes perfect sense to us because we have the transaction data."
- Dr. Mark Grether [16:22]: "We need to make sure that we support our consumers when they make a transaction in an agentic environment."
- Dr. Mark Grether [19:34]: "There's still a human element because you need to have the differentiation."
This episode provides a deep dive into how PayPal is leveraging its extensive transaction data to disrupt the traditional advertising landscape, emphasizing trust, data privacy, and strategic innovation as its core pillars.