PayPal hires high-ranking marketing gurus to delve into payments data

David Paul Morris/Bloomberg

PayPal has amassed a trove of historical payments data over the years, giving it the means to become a powerhouse in targeted marketing and advertising. 

It's not the only company on this path. Stripe, Block and American Express are trying to improve connections and revenue streams between the consumer and merchant sides of their businesses, and JPMorgan Chase recently announced the creation of its own digital media business.

But PayPal is also undergoing a long-term turnaround under new leadership, and advertising will play a key role in its corporate expansion plan.

To this end, the digital payment company recently hired advertising expert Mark Grether to be general manager of PayPal Ads, and John Anderson to be general manager of the consumer group. Grether was general manager of advertising at Uber between 2021 and 2024, following a role as director of Amazon Advertising in 2020 and 2021. Anderson was head of product and payments at Plaid from 2022 to 2024, and earlier held payment and marketing roles at Facebook, which rebranded as Meta several years ago, between 2011 and 2022. 

PayPal's advertising business will incorporate PayPal's advanced offers service to improve personalization. PayPal will use payment data from its global users, which totaled about 420 million in the first quarter, according to Statista, to enable merchants to personalize advertising content and incentive marketing based on a consumer's personal history with a merchant.

Consumers will be automatically enrolled in the program, though they can opt out, and PayPal will also sell advertising to merchants that do not use PayPal for payments. Online markets eBay and Zazzle are among the initial adopters of PayPal's advertising platform. PayPal did not provide comment for this story. 

Grether and Anderson will hire staff for PayPal's advertising platform during the coming months. The move is part of a reset at PayPal under the leadership of new CEO Alex Chriss, who is trying to reverse two years of slower growth that accompanied a larger slump in the fintech sector. The company is choosing which parts of the business to expand, and is rolling out new products that focus on how artificial intelligence can improve payments and other financial services.

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"All platform roads lead to advertising at some point," said Alenka Grealish, a principal analyst for financial services at Celent. 

PayPal's advertising business will likely benefit larger companies, Graelish said. "PayPal is likely challenged by insufficient consumer behavior data to truly help local small businesses effectively advertise, in contrast to its ability to promote big-box chains," she said. "The vast majority of small businesses engage in person with their customers, at the point of sale, or at a person's home. PayPal is strong in e-commerce but not in person."

Merchants of any size benefit from well-targeted advertising, said Aaron Press, research director for worldwide payment strategies at IDC, adding PayPal's new platform is not necessarily a small-business play. 

"If payment companies can offer advertising as part of the bundle of services they offer to their small-business customers, it could make digital advertising more available to a much broader set of businesses," Press said. 

To a certain extent, PayPal has been in the advertising business for a long time with things like rebates and merchant-funded offers, Press said. "It's also a logical extension of the offers platform, which could arguably be called an advertising program, and which benefits from PayPal's extensive consumer and transaction data." 

Other payment providers are trying to improve their ability to use data to better pinpoint marketing. JPMorgan Chase's new Chase Media Solutions develops credit and debit loyalty programs that merchants fund directly, rather than the traditional method of using card network payment fees to fund offers. JPMorgan hopes the media unit will help it target customers more precisely than older card-linked incentives, enabling the bank to compete with other banks and digital payment companies. 

American Express offers a digital advertising platform that enables merchants to produce personalized, card-linked offers for consumers based on those users' spending habits. 

"Budgets are tightening and marketing dollars are being scrutinized more closely across industries," said Erin Frankcombe, general manager of Amex Offers & Business Insights. "Brands today are being extra mindful of where they invest and are being more creative in their investment choices." 

Stripe's business services include information on website design, and how to incorporate marketing and advertising into business websites. And Block CEO Jack Dorsey has told shareholders the company is developing ways to offer Square's sellers, or merchants, the ability to customize profiles in Cash App, which can improve product and brand discovery and ordering for customers. "Ultimately that connects consumers to local businesses through our commerce offerings," Dorsey said in a recent letter to shareholders. 

Payments data has long been used to a certain degree for marketing purposes, according to Press.

"The ability of payment companies to provide more direct advertising services depends on a few factors such as the degree to which they have a registered, permissioned user base and, perhaps most critically, a well-defined portal such as an app or extension through which the targeted ads can be served," Press said.