[00:00:00] Phillip: Mark Grether, welcome to Future Commerce.

[00:00:02] Mark: Thanks so much for having me.

[00:00:03] Phillip: Thank you for opening up this beautiful space to us. Glad to have you here. On the show, you've said the merchant homepage is disappearing. What do you mean by that?

[00:00:14] Mark: You know, if you look into consumer behavior, we see that consumers are no longer starting the customer journey on search and then go to a merchant website to make a transaction. Instead, what they're doing is to actually start the search on LLMs, ChatGPT, Gemini, right, Claude, Perplexity. And then eventually they may actually then make the purchase on merchant websites. But over time, what we're seeing is that there will be more and more the situation where the consumer is actually making the purchase on the LLMs directly. There's no need for them actually, right, to go to the merchant website anymore.

[00:00:53] Phillip: How far are we away from that? This seems like a far future prospect.

[00:00:59] Mark: I'm not talking about that now an agent is making a decision on my behalf. Right? It's more, where is actually discovery happening, and where is actually discovery and purchase actually colliding into a very seamless process, and that I think is happening more and more within the LLMs. Right? Are we fully there yet? Definitely not. Right? Because the LLMs, while doing a fantastic job in helping with discovery, they do not yet have the fully fledged out kind of operations to actually ship products to consumers.

[00:01:32] Phillip: Future Commerce data, when we are polling consumers as of December, January 2026, we found 77, 76% of consumers prefer to have control. They don't want necessarily... they to finish the shopping journey in the LLM when we ask them. They like to click through to the brand website. That's today. You're speaking about a current behavior that you're believing is latent, maybe already exists now, but it would have to be pervasive for the merchant homepage to be deprioritized over time.

[00:02:15] Mark: But look... look what happened with publishers. Right? Because what... what happens if publishers, I...

[00:02:21] Phillip: Think about it all the time because I am one.

[00:02:22] Mark: You... you right. And... and... and what happens with a lot of publishers is, in the past, a consumer was looking for some content, again, was searching for it, and then eventually they went to the publisher side to really dive deep into the content and consume content. What is now happening is they're getting actually the content results within LLMs, and hence, there's no longer the need to go actually to publisher websites. Mhmm. And so my prediction is actually something very similar might actually also happen to merchants. Again, it might take a bit longer because the infrastructure needs to be built behind the scenes. But what may happen is that the storefront, right, moves to the LLMs. The physical delivery of goods might still be carried out by the merchants, but the storefront itself is no longer sitting on a merchant website, but it's actually moving to the LLMs.

[00:03:18] Phillip: And there's a lot of folks in the content ecosystem. This is a zero-click phenomenon, right? We're getting the information that we need. We don't have to click through anymore. Much like Uber, we used to go to transit. Transit comes to us. Now, have some experience there. And that, you've been at PayPal for a couple years here building the ads business. You've built ads businesses, I think, for most of your career, right? Yeah. How does the ads business that you've been building here at PayPal differ from your experience in the past, and what has changed here in the last couple of years that's informing your current journey?

[00:03:55] Mark: The big difference compared to building the advertising business at Uber, right, or building the advertising business out of Amazon is just the breadth of our data, which means we are sitting across 30,000,000 merchants, 400,000,000 consumers. Right? So we are seeing what consumers do, not just from a single merchant perspective, no matter how large the merchant is, but we're seeing it across all the merchants. Right? And that gives us this kind of much more horizontal view of consumer behavior. And I think that is the key difference. The other key difference is, is we're not just seeing behavior. We're actually seeing the real transactions. We know what actually people are purchasing. Right? Not whether they search for something, whether they're proud for something, we actually see what they are actually buying. And that is again the other big difference compared to where I was in... in the past. In addition to that, it's not just that we... we have PayPal, we also have, as you know, Venmo, right? Of course. Which means we know what people are sharing with each other, right? How many... you can't imagine how many kind of Uber emojis fly between people, how many pizza logos fly between people, right? People share with each other Uber rides or pizzas, and we also have that as part of what we call a transaction graph. And last but not least, we have, as I mentioned earlier, the browsing behavior from Honey. And all of that actually comes together to the PayPal transaction graph, and having access to that richness of data is really a really fantastic starting point to build an advertising business on top of that.

[00:05:36] Phillip: You said transaction graph, and I'm just inferring here. But I think about what I buy because we say at Future Commerce, we have this thesis. Not many editorial outlets have a thesis. We have a thesis that commerce is culture. Right? The way that we experience culture is through what we buy. And to some degree, I believe who I am is experienced through what I buy. Because it's a function of, I experience my life through what I buy. It's part of my aspiration of who I want to become. And so what I hear you saying is that you have insight into people's, like, culture of people and who they are and how we're actually building the future of society. Say more about the transaction graph and how that plays into your outlook on building that future of the ads business.

[00:06:30] Mark: Mhmm. I think you make a really good point in this kind of who I am is kind of what I'm buying, right? Right. In a... And the difference with PayPal is, what the benefit of PayPal is, that we have, again, this holistic view on what you're actually buying, on so many different categories. Right? Whether it's in... in travel, whether it's in fashion, whether it's in... in groceries, whatever it may be. Right? We all know that. And so we have, again, this... this richness of understanding who you are as an individual. Right? And... and not only can we then explain what you purchased in the past, but obviously, we also can make good inferences what you're going to buy in the future.

[00:07:08] Phillip: Right.

[00:07:08] Mark: Right? Which is what... what matters most to... to the advertisers. Now to your question, what are we using the data for? Right? And there are two main kind of use cases. The first one is from a merchant perspective. We're helping them to reach the right audiences based on the transaction data. That's the obvious one. Right? Mhmm. But what's also important for the merchant is we're also helping them with generating insights about their consumers and potential prospects, but we're also helping them to actually measure the success of campaigns. Mhmm. Right? If I'm selling... we both have here sneakers. Right? If... if... if I'm someone who's selling sneakers, I would like to understand where are my consumers, on which merchant websites are they actually selling my... buying my sneakers. Right. Right? And if I spend money into an advertising campaign with retailer number one, right, what is my return on that spend? Mhmm. And more importantly, what is the return of the spend relative to me spending my advertising dollars with retailer B? Right? And so we are the ones who basically have this kind of cross-retailer perspective because, again, we see everything. And so from that perspective, being able to target, providing insights, and then providing kind of closed-loop attribution is the key differentiator that we can provide to them.

[00:08:30] Phillip: I think this is a really relevant time and topic because there's been a lot of questioning about, you know, we spend a lot of money, a lot of time in retail media. And I think a lot of folks are starting to question, what has been the efficacy and the return for all of that investment? And do the right networks actually exist right now that actually target the audiences? And, they show up... is my brand showing up at the right time during that buyer journey? It... it also reminds me, I... I saw a recent Google stat, and of course, you know, everybody likes to talk their own book, but it said 89% of social media attribution purchases that are based on last-click data actually began their journey either on YouTube or on Google search. And we're not seeing, because we don't do a lot of multi-click attribution these days, we're not actually seeing a lot of the full of the buyer journey. And so I'm really interested into what you're talking about because of the way that our purchase behavior informs future predictive behavior. Where does, leaving the web for a moment, talk to me a little bit about CTV and some of the other areas where buyer decisions are being formed and tastes are being formed.

[00:10:00] Mark: You made a great point, which is, as an advertiser, right, I spend money on CTV. Then the question is, does it actually drive transactions? Right. Right? That's a big question. At the end, as a CMO, you need to justify the spend in front of your CFO. You have to have the data. And what's happening today is, in the best case scenario, you have a CTV provider who is connected to a retail outlet, and you can connect the dots between both. But how often is it that you might see actually a campaign on CTV, and you shop somewhere else. Right? That's... Which people can't connect. Sure. People can't connect. Right. They can't connect the dots unless... now that's where PayPal and our identity comes into play. Right? Unless you have someone like us who actually is integrated on all the merchant websites and is actually therefore seeing all the transactions that happen across all the merchants and can tie it back to the CTV campaign because we have this unified identity, right? One of the key things which I think is a little bit kind of underestimated in terms of importance is the fact that we have, across our 400,000,000 consumers, our own identity. Mhmm. Now the trick about our identity is it was built from a finance perspective. Meaning, I need to understand that you are you and not your twin brother. Right. If I receive money from you or if I wanna pay you. Right? Meaning, our identity has to clear a much higher bar compared to probabilistic IDs or cookies. Right? And hence, we are in a position to stitch together data much better than anyone else. Hence, we can help with, to your earlier point, with attribution and measurement. Right? Again, it's not based on probabilistic IDs, on cookies. It's based on the real ID that is used to actually make transactions with your PayPal account.

[00:12:05] Phillip: Sure. And those are irrespective of payment method because you have such a surface area across the web because of... Exactly. ...the payments profile. Think that... that's so interesting because the CMO and CFO relationship notwithstanding, the digital identity resolution question is one that keeps coming up over and over again, especially as you see new products come up in market, depending on who's taking over the subway this week. But there's these questions around how does the identity resolution, how is that being accomplished, what is it being used for, and how is it... is it able to be used in my business in all regions? And I think that that's another question is, how can merchants expect to be able to use this in campaigns in North America versus Europe? Is this a global solution? Give a little bit of a sense of how that plays out.

[00:13:07] Mark: Yeah, sure. So we started about two years ago, right? And so right now we are live in The US, in UK, and Germany, which obviously from an advertising perspective are the biggest and most important markets. Yeah. And so the products are alive in all these markets. So we have the... the PayPal ID, right? We have the targeting and the measurement. We have our own supply. We have CTV supply, which you spoke about. Right? We have another thing which we haven't spoken about yet, coming back to your earlier point about zero-click or one-click, which is we have a product called Storefront Ads. And the idea of Storefront Ads is that the creative itself becomes the shop. Mhmm. Meaning, you actually are now... are getting exposed to the... the sneakers. Right? And we know that you're into buying sneakers. And, if one click, you can actually make the purchase. We already know who you are. We know your bank account. We... we know your address. Right? Everything is kind of pre-populated. And so from a consumer perspective, it becomes super easy to basically, you know, finish a transaction.

[00:14:11] Phillip: Mhmm.

[00:14:11] Mark: And from a merchant perspective, it means that while we earlier spoke about consumers over time may not go to your website anymore because the... the shopping interface has moved into LLMs, it means that you can actually turn any interaction that you have with consumer, whether it's on your own site, it's in LLMs, whether it's on the open web, right... Right. ...into a shoppable experience. And I think that is really, really important because merchants will be challenged not getting enough reach in the future. Mhmm. If everything eventually gets more and more concentrated to LLMs. So they need to basically be wherever the consumer is and turn every opportunity into a purchasable kind of experience for the consumers to really make sure that they're kind of maximizing transaction opportunities.

[00:15:05] Phillip: This shoppable ads, think it definitely brings back the performance versus brand conversation. It's sort of the never-ending loop. I think that comes up over and over again too. Now we're in the CTV conversation around performance versus brand, and that's... we're having the same conversation but in a new channel. And I think we're also needing to have a conversation around how trends and creators start to inform how we're creating new creative in those channels. Because I start to see how we're shifting creative into performance in those channels, because I think authenticity and storytelling are part of those channels because we have a little bit longer of a format, a little more targeted format in CTV. So how do you keep at PayPal, how are you helping to keep the insights and measurement piece as that creative plane expands in the authenticity and storytelling?

[00:16:06] Mark: Yeah.

[00:16:07] Phillip: And how do you help merchants...

[00:16:08] Mark: And merchants? Let's talk about... for... for about creators for a moment. Right? If you think about creators at the end, explicitly, implicitly, they're almost running kind of two businesses at the same time. Mhmm. The first one is they are creating a platform that attracts consumers by having engaging content on the platform. But what implicitly they do is they are generating data about the consumers. That's what at the end, what it is. Right? It's like Google is all about, you search something, which means you'll give data to Google. If you take an Uber ride, you give data to Uber. If you make a transaction with PayPal, you give data to PayPal. If you are engaging with a creator, you give the creator data about yourself, about your interests, and so on and so forth. Right? The question now is, how actually cost-efficient can you create the content and the data that is produced? That's kind of, at the end, what a creator needs to think about. Right? How can I create as much data as possible as in a... in a very efficient form by being a... a fantastic creator? And then the second business, which the creator is running, again, implicitly or explicitly, is how do I actually monetize the data?

[00:17:26] Phillip: Right.

[00:17:27] Mark: And that typically happens with ads. Right? And if I now can show that the ads actually perform, I actually get paid more money for my ads. Right? So the creator has now two things to do. He needs to create content that generates data, and he is then running an advertising business that ideally is highly performant to monetize the data that he's creating. Yeah? And what we now bring to the table is we're helping him stitching those two worlds together with the payments, ID, the measurement, enriching the data with the transaction graph. Right? So we're helping the creator to basically make this flywheel spin faster.

[00:18:09] Phillip: There's a... you're going to Cannes. Give me a little bit about how you're showing up there and your activation. Are you speaking?

[00:18:24] Mark: Yeah, indeed. So Cannes for us is a couple of things. It is mainly speaking to both brands and agencies and having speaking engagement, right? To really make sure that more people understand how PayPal Ads can help with their own businesses, right? That's kind of the main purpose. And that's why we're spending a lot of time there, which is why we have a small group over there to really kind of get in front of advertisers and agencies. We didn't talk about, like today, about the PayPal Ads product. Storefront Ads will be a big topic. Curated ads, CTV will be a big topic. Measurement will be a big topic. Identity will become a big topic, right? And then of course, we can also talk to some of our partners and to see what can we do together as we go into 2027.

[00:19:17] Phillip: I'm really big on partner ecosystems. I've spent twenty-two years in e-commerce and retail, and I think that the partner ecosystems are often overlooked as how you find your way to success, right? Agency partners, technology partners. Any... any suggestions or any advice on how you guys show up in the market?

[00:19:39] Mark: Yeah. I mean, for us, is kind of, a, to your point, we... we are heavy leaning into... into partners because you don't wanna kind of reinvent the wheel. Mhmm. For the tenth time. Right? If someone has done that and perfected it. And so if you look down at the partners that we're looking into, basically three dimensions. The first one is who can help us on the demand side. Mhmm. Right? What are the channel partners, agencies, an example, right? Sure. Helping us with bringing demand. Who can help us on the supply side, right? That's why we talk to publishers, and that's why we talk to SSPs and others helping us on the supply side, right? And then in the middle, who can help us in stitching it together from a tech perspective, from a data, from a measurement perspective. So it's demand on the one hand, supply on the other hand, and who's helping us to bring those two dimensions together.

[00:20:31] Phillip: I'm just fascinated that you've accomplished so much in just a couple short years. I can't wait to see you at Cannes. We'll be there. I think we're going to be doing a little bit of content with you guys, and I hope to catch you maybe on stage.

[00:20:46] Mark: Yeah, of course. You. Thank you.

[00:20:48] Phillip: I'm Mark Grether. Thank you for joining us for Future Commerce, and congrats on all your success so far.

[00:20:52] Mark: Thanks so much for having me. Thanks. Thank you.