PayPal Ads positioned itself as a distinct category within the expanding commerce media landscape during CES 2026, with leadership emphasizing the company's unique cross-merchant visibility spanning 30 percent of global commerce transactions.

Dr. Mark Grether, senior vice president and general manager of PayPal Ads, detailed the payment giant's strategic differentiation from traditional retail media networks during a January 8 interview at the C-Space Studio. According to the executive, PayPal processes transactions across 30 million merchants and 400 million consumers, creating what the company characterizes as a "transaction graph" that provides visibility into purchase behavior competitors cannot replicate.

"We have transaction data across 30 million merchants across 400 million consumers," Grether stated in the interview. "We see about 30% of all global commerce with more data than any other kind of retailer in the world."

The scale positions PayPal within an emerging category that extends beyond conventional retail media definitions. Grether outlined a framework distinguishing between retail media networks, commerce platforms, and financial media networks based on their data access patterns and cross-merchant visibility. Retailers observe consumer behavior exclusively within their own properties. Commerce platforms track activity on individual commerce sites. PayPal operates horizontally across merchants, observing consumer journeys as they move between retailers, marketplaces, and service providers.

This cross-merchant perspective enables identification of purchase patterns invisible to platform-specific analytics. A consumer might search for running shoes on one retailer, compare prices on a marketplace, consult an AI assistant for recommendations, read reviews on social platforms, send money via Venmo for race entries, and purchase gear through PayPal checkout. According to Grether, PayPal maintains visibility across these discrete touchpoints that other platforms observe in isolation.

Consumer journeys now start with ChatGPT

The executive highlighted fundamental shifts in how consumers begin purchase journeys, citing specific behavioral patterns PayPal observes through its transaction graph. Recent data shows many customer journeys now originate with ChatGPT rather than traditional search engines. Consumers explore products through conversational AI interfaces, transition to Amazon for deeper product research, then move to specific retailers for price comparisons before completing transactions.

"A lot of customer journeys actually start with GPT," Grether explained. "People explore on ChatGPT, then they eventually go to Amazon to dive deeper into the product that they're interested in, but then before they actually make a transaction more often than not they actually go then to a specific retailer, do price comparisons and things like that."

The observation aligns with broader industry evidence of AI-driven search behavior transformation. Google VP Robby Stein confirmed in October 2025 that queries in AI Mode run two to three times longer than traditional searches, providing enhanced intent signals for advertising targeting.

The shift creates measurement challenges for advertisers attempting to track conversions across fragmented touchpoints. IAB Tech Lab opened its agentic framework in November 2025 specifically to address attribution modeling complications when autonomous agents control campaign execution across multiple platforms simultaneously.

PayPal's horizontal visibility across merchants positions the company to observe these multi-platform journeys. The transaction graph connects data from PayPal transactions, Venmo bill-splitting activities, and Honey browser extension browsing behavior. Honey provides insight into pre-purchase activity including search behavior on Amazon, Google queries, and ChatGPT interactions through user opt-ins permitting the company to understand browsing patterns across the open web.

Identity verification differentiates payment-based targeting

The company's identity infrastructure represents another differentiator from behavioral advertising approaches. According to Grether, PayPal's payments business requires verification that specific individuals match account credentials rather than probabilistic identity matching. This verification necessity creates what the executive described as "a very high level of fidelity when it comes to our identity program."

"As we are a payments company, we need to know if John is truly John," Grether stated. "Right. And not just approximately John, right? And so we have a very high level of fidelity when it comes to our identity program."

The 400 million unified consumer IDs enable targeting based on verified identity rather than device fingerprints, cookies, or probabilistic matching. This approach contrasts with advertising platforms navigating privacy regulations and third-party cookie deprecation through contextual targeting and cohort-based approaches.

PayPal launched its advertising platform in April 2025, expanding to shoppable Storefront Ads in June 2025. The advertising products leverage transaction data across PayPal, Venmo, and Honey to deliver targeted campaigns across publisher websites and connected television environments.

The company established strategic partnerships to expand reach beyond its own properties. PayPal partnered with PubMatic in September 2025 to deliver commerce-driven advertising through programmatic infrastructure. The integration provided advertisers access to premium publisher networks reaching audiences across more than 2,000 premium publishers with brand-safe placements.

Storefront Ads flip merchant acquisition model

Grether outlined PayPal's approach to shoppable advertising, which the company positions as fundamentally different from traditional merchant acquisition strategies. The Storefront Ads format enables direct purchases within ad units across the open web without requiring consumers to navigate to merchant websites.

"What we are now doing with what we call storefront ads, we are flipping the script and say as opposed to consumers have to go to a merchant, the merchants go to where the consumers are on the web," Grether explained. "And we are basically now transforming every touch point on the open web into a shoppable moment."

The approach reverses the decade-long model where merchants spent money on Google to attract people to their websites for conversion. Storefront Ads bring product catalogs directly to consumers wherever they browse, eliminating navigation friction between advertisement exposure and transaction completion.

According to the executive, the format addresses merchant struggles attracting traffic to their own properties. By enabling purchases within ad units themselves, merchants access broader consumer reach while consumers gain convenience through one-click checkout using existing PayPal credentials and shipping information.

Shoppable advertising formats have proliferated across digital channels throughout 2025. Roku launched its Ads Manager platform in September 2024, introducing Shopify integration that enabled the first connected television advertising with direct on-screen purchases using remote controls. Google launched accelerated checkout for Demand Gen campaigns in April 2025, reducing friction between advertisement engagement and transaction completion.

The convergence extends beyond advertising into AI assistant interfaces. PayPal partnered with Microsoft on January 8, 2026, to power Copilot Checkout, enabling shoppers to discover products and complete transactions entirely within the Copilot experience without leaving the platform.

AI doesn't replace advertising, it intensifies it

Grether addressed questions about whether artificial intelligence eliminates the need for advertising by predicting and influencing purchasing decisions before consumers recognize their own needs. According to the executive, AI-powered prediction represents an evolution rather than elimination of traditional advertising objectives.

"I would actually say that is advertising," Grether stated when asked about AI systems predicting consumer needs. "If you think about advertising, what was advertising? Advertising was in many ways influencing consumer behaviors and predicting what consumers actually should buy before they even know that they should buy it."

The executive characterized AI-powered targeting as "ads on steroids" - a technological advancement that amplifies advertising's fundamental purpose of creating desire and influencing purchase behavior. This perspective contrasts with industry speculation that AI assistants might reduce advertising inventory by providing direct recommendations without paid placements.

Industry research from MiQ in November 2025 revealed 72 percent of marketers plan to apply AI in more ways over the next 12 months, yet only 45 percent feel confident in their ability to apply it successfully. The disconnect between adoption intentions and implementation confidence reflects an industry eager to advance while developing necessary skills and systems.

PayPal's three strategic priorities for 2026 center on merchant support rather than direct consumer acquisition. According to Grether, the company aims to help merchants sell more through enhanced targeting, become more profitable by growing their own retail media businesses, and prepare for the AI world through solutions like Storefront Ads that make merchant catalogs purchasable on large language model interfaces.

"We want to help our merchants to sell more," Grether stated. "We secondly want to help our merchants to become more profitable helping for example with their own retail media efforts growing their retail media businesses. And the third one is we want to help them to be ready for the AI world."

The merchant-centric approach aligns with broader commerce media network strategies observed across the industry. Mastercard launched its commerce media network in October 2025, leveraging permissioned transaction data from more than 160 billion annual payments processed in 2024. The network operates with an existing base of 25,000 advertisers reaching 500 million enrolled consumers across owned channels, bank outlets, and publishing partners worldwide.

Commerce media maturity varies across industries

The commerce media landscape extends beyond traditional retail into financial services, travel, hospitality, and quick-service restaurants. According to Koddi research published in November 2025, commerce media is projected to exceed $1.3 trillion by 2030, transforming transactional environments like retailer sites, booking platforms, and delivery apps into high-performing digital channels.

Networks operate at different maturity points ranging from early pilots to enterprise-grade programs. Retail media networks face automation and scaling challenges despite strong foundations in data and partnerships. Only 16 percent have achieved centralized or automated creative management. Just under half report disconnected onsite, offsite, and in-store inventory. Sixty-three percent identify measurement as their biggest barrier, with few able to track incrementality or closed-loop attribution across online and offline sales.

Financial services networks achieved 26 percent stating they offer full-funnel commerce media, largely reflecting rigorous data governance rather than complete media readiness. Travel and hospitality companies capture valuable consumer data from search to booking to loyalty redemption, yet only 8 percent qualify as trailblazers. Their challenge centers on converting rich intent signals into scalable monetization.

PayPal's positioning within financial services commerce media provides certain structural advantages. Payment platforms observe transactions across multiple merchants and categories rather than within single retail environments. This cross-merchant visibility enables audience targeting based on verified purchase behavior across the entire commerce ecosystem rather than isolated retail relationships.

PayPal announced Transaction Graph Insights & Measurement on January 6, 2026, providing advertisers with cross-merchant visibility into actual purchase behavior. The program draws from PayPal's transaction graph connecting more than 430 million consumer accounts and tens of millions of merchants to identify high-intent shoppers before conversions occur elsewhere.

The methodology differs substantially from attribution models that assign credit to specific touchpoints without establishing causal relationships between advertising exposure and purchase behavior. Transaction Graph Measurement represents PayPal's first-party measurement suite built specifically on the transaction graph using deterministic-driven identity. The system delivers campaign reporting, insights, attribution, and incrementality analysis using actual purchase data rather than probabilistic models.

Retail media projected to capture 20% of ad revenue

The broader retail and commerce media sector continues rapid expansion. Research from Omdia published in September 2025 projects retail media networks will exceed $300 billion by 2030, representing approximately 20 percent of total global advertising revenue.

IAB Europe's data from March 2025 shows retail media achieved 22.1 percent growth in 2024, outpacing the broader advertising market's 6.1 percent growth by nearly four times. This acceleration reflects significant budget reallocation, with performance advertising budgets contributing 55 percent of shifted investment into retail media channels.

Several factors drive the remarkable growth trajectory. Retailers actively seek new revenue streams beyond traditional commerce operations. Brands demand more targeted advertising solutions with measurable return on investment. First-party data gains increasing value in privacy-focused digital environments. Technological advancements enable more sophisticated retail media offerings.

IAB Europe updated its Pan-European Retail & Commerce Media Landscape Map in October 2025, documenting ecosystem growth with new entrants. The organization released updated pan-European definitions in March 2025, establishing consensus across the National Federation and IAB network throughout Europe. The framework addresses three distinct categories: on-site retail media, off-site retail media, and in-store digital retail media.

Commerce media networks encompass travel and mobility services, payment providers, food delivery platforms, and classified advertisement services. This distinction reflects the expanding scope of commerce-driven advertising beyond traditional retail environments.

PayPal's entry into commerce media coincides with intensifying competition among payment processors and commerce platforms seeking to enable transactions through AI assistants. The company competes with established retail media networks while differentiating through cross-merchant transaction visibility that retail-specific platforms cannot replicate.

The fundamental question centers on whether payment networks can successfully monetize their transaction data through advertising while maintaining consumer trust in payment security and privacy. Grether emphasized relevance as the key consideration in leveraging transaction data for advertising purposes.

"At the end it all needs to become relevant for the consumers," Grether stated regarding privacy and personalization balance. "It's really important that we are leveraging our transaction data... to really bring more relevant, more personalized kind of experiences to our consumers."

The advertising industry faces substantial transformation as consumer journeys fragment across search engines, AI assistants, social platforms, marketplaces, and specialized commerce environments. PayPal's horizontal visibility across these touchpoints positions the company to observe behavioral patterns that platform-specific analytics miss. Whether this cross-merchant perspective translates to sustainable advertising revenue remains an open question as commerce media networks proliferate across industries.

Timeline

Summary

Who: Dr. Mark Grether, senior vice president and general manager of PayPal Ads, spoke at CES 2026 about PayPal's commerce media strategy. The San Jose-based payment company operates advertising programs leveraging transaction data from 400 million consumers and 30 million merchants globally.

What: PayPal Ads positions itself as a distinct category within commerce media through cross-merchant transaction visibility spanning 30 percent of global commerce. The company's transaction graph connects data from PayPal transactions, Venmo activities, and Honey browsing behavior to provide horizontal visibility across merchants that retail-specific platforms cannot replicate. Strategic priorities for 2026 include helping merchants sell more through enhanced targeting, supporting merchant retail media businesses, and preparing catalogs for AI-driven shopping through Storefront Ads and partnerships like Copilot Checkout.

When: The interview occurred on January 8, 2026, during CES at the C-Space Studio. PayPal launched its advertising platform in April 2025, expanded to shoppable Storefront Ads in June 2025, and introduced Transaction Graph Insights & Measurement on January 6, 2026.

Where: PayPal operates advertising programs across publisher websites, connected television environments, and AI assistant interfaces. The company's transaction graph provides visibility across the open web through Honey browser extension data, payment transactions across merchants globally, and Venmo social payment activities. Storefront Ads transform touchpoints on the open web into shoppable moments without requiring navigation to merchant websites.

Why: Consumer journey fragmentation across search engines, AI assistants, marketplaces, and social platforms creates measurement gaps for advertisers attempting to track conversions. PayPal's cross-merchant visibility addresses these gaps by observing purchase behavior as consumers move between platforms. The shift from search-initiated journeys to AI-driven product discovery fundamentally changes how merchants reach consumers, requiring new approaches like shoppable advertising formats that bring catalogs to consumers wherever they browse rather than driving traffic to merchant websites.

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