PayPal to launch Ad business fueled by user data

PayPal is diving into the advertising sector, aiming to leverage its vast trove of user data to create a targeted advertising platform. This move comes as the company seeks new avenues for growth following a period of lower profits.

The digital payments giant plans to build an ad network fueled by the data it collects on millions of users' purchase history and spending habits. This data, encompassing both PayPal transactions and those made with the Venmo app, will be used to create personalized advertisements for consumers.

Leading the charge is Mark Grether, former head of Uber's advertising unit, who will head PayPal's newly established "PayPal Ads" division. Grether will oversee the development of new ad formats, manage sales efforts, and build a team for the division.

PayPal has already launched its initial advertising product, "Advanced Offers." This AI-powered tool uses user data to target consumers with relevant discounts and promotions. Notably, Advanced Offers operates on a performance-based model, meaning advertisers only pay when a purchase is made through the ad.

Beyond its own customer base, PayPal also has ambitions to sell user data to non-endemic advertisers – those not directly selling products or services on the platform. This data would allow advertisers to target consumers with relevant ads displayed on other websites or platforms.

PayPal's foray into advertising follows a similar move by JPMorgan Chase, which recently announced plans to allow advertisers to target users based on their banking activity. This trend suggests a growing interest among financial institutions in utilizing their customer data for advertising purposes.

With its new ad business, PayPal hopes to generate a fresh revenue stream and reignite growth. This comes after a period of lower profits and workforce reductions for the company. The success of this venture will depend on PayPal's ability to effectively leverage its data while ensuring user privacy remains a priority.