Suddenly it’s cool to be an ad network again. This is behind the continued rise in retail media networks, where retailers monetize the high-traffic and intent-advantaged real estate in and around their stores. It’s become a popular way to boost retail sales and diversify revenue. We’re up to 200 networks already.
But there’s one differentiating benefit – besides inherent advantages of advertising in the last few inches to the cash register. These networks are first party in their orientation, meaning they utilize all their own data for promotional targeting. That makes them compliant with the privacy era’s rules of engagement.
But now, the latest trend in retail media extends these principles beyond the retailer realm: banks and financial services. This was shown by the recent launch of Chase Media Solutions, which uses a treasure trove of purchasing data to run targeted ads within its app, website, and other first-party channels.
In fact, as far as media networks go, financial services companies could be the next frontier. They hold some of the best data that any media publisher can ask for in building consumer profiles. MasterCard has done some version of this, as shown by Elina Greenstein’s presentations at Localogy events.
Broader Effort
Building on all the above, the latest player to enter the mix is PayPal. Last week, it announced plans to build out a new media and advertising platform. Similar to Chase Media Solutions, it’s fueled by transactional data from its 400 million customers, including a dash of AI to guide targeted offers.
This builds on PayPal’s Advanced Offers Program. Announced in January, the program ingests data from a half-trillion dollars in annual transaction data to reveal insights for ad targeting. It then applies a pay-per-performance model with merchants for any direct sales that its targeted offers generate.
Now, with the formal media and advertising platform, the Advanced Offers Program is folded into a broader effort to monetize all the purchasing data that PayPal sits on. And like Chase Media Solutions, these ads and offers will mostly show up in first-party consumer touchpoints such as PayPal’s app.
And to show that it’s serious, PayPal brought in heavy hitters to manage the platform. Chief among them is Mark Grether, who joins PayPal from Uber, and Amazon’s ad business before that. At Uber, he helmed the ads division which he grew into a $1 billion business. PayPal is hoping to see something similar.
Balancing Act
Stepping back, though this is the latest twist in the retail media plotline, it’s not a necessarily new concept. As noted, Master Card has been deploying its aggregate purchase data for years. In its case, the data is served back to merchants to help them gain consumer insights, among other things.
But whether for merchant use in strategic positioning, or in building an ad/media business, the data is used in first-party ways. While these moves may have privacy kneejerks, they’re technically compliant in that consumers’ data aren’t being sold to, nor changing hands with, third parties for ad targeting.
Beyond that technical advantage, it’s unclear what assurances PayPal and Chase will make to ease consumer concerns or consternation. Will they apply granular consumer-level targeting with personal identifiable information (PII)… Or will they create broader personas (a.k.a. audience targeting)?
These answers, and other moves that come next from financial services players will be telling. Though they sit on a goldmine of consumer purchase data, it won’t mean anything if end-users don’t trust them. So their next steps will be a balancing act of running an ad network without alienating their core users.
