PayPal is building an ad network, leveraging user data and AI for targeted advertising

PayPal is looking to expand its growth by leveraging its extensive user data to launch an ad network. The digital payments giant, known for its services including the socially-enabled Venmo app, plans to build an ad sales business utilizing the vast amounts of data it collects from tracking purchases and broader spending behaviors of its millions of users.

To spearhead this new initiative, PayPal has appointed Mark Grether, the former vice president and general manager of Uber Advertising, as the head of its advertising business. In 2023, PayPal processed around 25 billion transactions, reflecting its steadily growing volume year over year.

In January, PayPal introduced Advanced Offers, its first ad product. This product uses AI and the company's data to help merchants target PayPal users with personalized promotions and discounts. The company now aims to sell ads not only to its own customers, but also to non-endemic advertisers — those that don't sell products or services through PayPal. These advertisers could use PayPal data to target consumers with ads displayed on other websites or connected TV sets.

PayPal's combination of user purchase data and AI could potentially make it a strong player in the advertising space, although it may raise concerns among ad recipients.