PayPal Ads Explained

Sponsored by PayPal Ads

For more than two decades, PayPal has been building a digital payments brand that has become synonymous with secure transactions and seamless checkout experiences. With a presence in nearly every corner of e-commerce, the company has established deep connections with both consumers and merchants, giving it a unique vantage point on the evolving world of digital commerce. In October 2024, that vantage point became something more: a launchpad for PayPal Ads, the company’s ambitious new foray into advertising. With this launch, PayPal is leveraging its role at the intersection of payments and intent to redefine what advertising can look like in a commerce-first world. 

The Ad Tech Explained Team developed this explainer, in partnership with PayPal, to help you understand the unique value proposition at the heart of PayPal Ads, with a look at what to expect to see next from PayPal Ads, especially as the industry turns its attention to Cannes.

PayPal is a name most people associate with payments, not media. What changed to make now the right time for PayPal to become a leader in the advertising business?

We’re entering an era of what we call the empowered shopper. Consumers today are in control of their shopping journey unlike ever before. They increasingly expect personalized offers, agentic experiences, and zero-click commerce – whether they’re interacting with a brand on a website, through a chatbot, or via an AI agent. Before consumers went to the store. Now, the stores must come to them. This requires a new kind of advertising infrastructure to support open commerce.

At the same time, targeting based on things like cookies is breaking down. Brands need a better way to anticipate intent and measure outcomes. That’s why I like the phrase payments are the new cookies. Purchase data is accurate and verified. It reflects real consumer behavior, not proxies. But consumers want trust, so if this can be designed with privacy at its core, it offers the best signal for understanding who to reach, when, and how.

The key here is that PayPal is a two-sided network that can create a flywheel benefitting both brands and consumers. For brands, PayPal sees billions of shopping moments a month across tens of millions of merchants and hundreds of millions of consumers — all within a trusted, privacy-first environment. This PayPal Transaction Graph provides cross-merchant intelligence to grow market share, which only PayPal can offer as a leader in commerce for around 25 years. For consumers, we can create more relevant, personalized, seamless shopping experiences that drive more conversion and engagement.

What does commerce media mean in the context of PayPal Ads — and how is it different from traditional financial or retail media? 

Retail media networks are typically limited to a single retailer’s ecosystem. They see what happens in one store, and that’s where the ad opportunity and intelligence begin and end.

PayPal, on the other hand, is connected to commerce across the internet. We see transactions across thousands of categories and tens of millions of merchants. That gives us a much more complete view of consumer behavior. It allows us to help advertisers plan, personalize, and optimize campaigns across a broader ecosystem with privacy in mind.

This starts with exciting new ad experiences on PayPal, Venmo, and PayPal Honey. It expands to PayPal Offsite Ads, where we use the PayPal Transaction Graph to improve advertising across the open commerce. And in the future, we’ll actually bring the storefront to the consumer so they can buy products with PayPal and Venmo without ever leaving the ad itself.

You sit on a massive amount of consumer behavior data. What kinds of signals are most valuable to advertisers, and how do you ensure they’re used responsibly?

The foundation is PayPal’s payments network, allowing for cross-merchant scale and insights. Approximately 70% of Americans have a PayPal account, and around half access PayPal several times weekly. Venmo gets referenced every nine seconds across social platforms, with about half of Venmo users being Gen Z or Millennial. This all occurs during a crucial consumer moment – when individuals are considering purchases and making spending decisions.

Advertisers have been most excited about understanding what shoppers buy before they come to their store, how shoppers are using text and emojis in peer-to-peer payments, and how they cannot just drive incrementality but actually grow category market share.

An important point here is that we use these signals responsibly. Privacy and trust are foundational to PayPal’s business, and that extends to how we build PayPal Ads. We’re interested in helping them discover relevant products in the right moments in ways they can trust.

PayPal reaches consumers in some very specific moments — during checkout, payment, even when checking account activity. How do you think about aligning ad experiences with those moments?

Intent is vitally important to a successful ad product. What makes PayPal unique is that we’re present during real shopping activity, not just when someone is scrolling or searching, but when they’re making a purchase, checking an order, or managing their money. That gives us an opportunity to make advertising useful and smart, rather than interruptive.

We think about how to enhance those moments, not distract from them. For example, after someone checks out with PayPal, we might show them a personalized offer based on their recent purchases. Or if someone is tracking an order in their app, we can surface a complementary product or offer from a trusted brand. These are high-intent, high-attention moments that can add value for everyone involved.

What types of advertisers or campaign goals are best suited for PayPal Ads today — and how might that change as the platform grows?

Right now, we’re seeing excitement from advertisers that are endemic to PayPal – think retail and travel, and more. These brands are focused on quality reach to high-value audiences both on PayPal properties and beyond. They want to measure attribution and market share using our transaction data.

As the platform grows, we expect our audience solutions to expand to non-endemic brands, new ad units, SMBs, and more. Our long-term vision is to support the full advertising lifecycle, from awareness to loyalty, all rooted in real commercial behavior.

What should we expect to see next from PayPal Ads — especially as the industry turns its attention to Cannes?

Cannes is exciting not only because it’s the largest ad event of the year and the only place that really celebrates the creative work of our industry. It’s also exciting for us because this year is the first time PayPal will be showing up. We’ll be powering Influential Beach and have some exciting announcements in store around shoppability, commerce, and partnerships. It’s an energizing time to be building ads that pay off.

About PayPal 

For over 25 years, PayPal has been at the forefront of the digital commerce revolution. Creating innovative experiences that make moving money, selling, and shopping simple, personalized, and secure, PayPal empowers consumers and businesses in approximately 200 markets to join and thrive in the global economy. For more information, visit www.paypal.com.