AI has firmly captured the attention of results-focused marketers. Now they want proof that it can create measurable business value.
One executive who has been working on this challenge is Mark Grether, the senior vice president and general manager of PayPal Ads, which he has led since joining PayPal in 2024. At PayPal, his team aims to build connections among advertisers, merchants, and PayPal, Venmo, and Honey users—an undertaking that involves transaction data from approximately one-fourth of the $6 trillion in annual global e-commerce.
Grether sat down at Cannes Lion with Jeff Jacobs, a partner and core leader in McKinsey’s Consumer Marketing Practice, to discuss how PayPal’s transaction data can connect marketing to actual purchases, why CMOs and CFOs need a common basis for investment decisions, how AI is reshaping customer journeys and personalization, and why newer businesses may benefit from building AI-first from the start.
The following transcript of their conversation has been edited for clarity and length.
Jeff Jacobs, McKinsey: Mark, you’re talking to marketers and technologists across the industry constantly. AI must be dominating the conversation, just as it is here at Cannes Lions. What’s most interesting to you about what you’re hearing right now?
Mark Grether, PayPal Ads: The AI conversation has evolved. A year ago, people were asking what AI could do. Now they’re asking, “How is it changing my business? How is it adding value, particularly given the cost of using AI?”
The second question is differentiation. If companies are building on many of the same LLMs [large language models], how do they create a competitive advantage? One answer is proprietary data.
When transaction data becomes an advantage
Jeff Jacobs: What does that look like in practice?
Mark Grether: PayPal has proprietary data across 400 million consumers and 30 million merchants globally. That gives us transaction data that shows not just what someone might be interested in but whether a purchase actually happens and whether our marketing is working.
What we build is based on what we call our “transaction graph”—a view of PayPal’s consumer, merchant, and transaction data that helps connect marketing activity with actual purchases. That ability to see whether marketing leads to a transaction is important because it helps us ensure our investments are paying off.
Let the results speak
At Cannes, we made a conscious decision not to launch another feature. Instead, we worked with advertising partners on case studies to show whether what we’ve built over the past 18 months performs for advertisers.
The results are starting to show. With Best Buy, our campaigns delivered a strong return on ad spend. With Adorama, we were able to help reach incremental users, and we’ve also been doing measurement work with Etsy.
That was our theme here: Move beyond talking about what technology can do and demonstrate the results.
AI reshapes the customer journey
Jeff Jacobs: Beyond efficiency, how do you see AI changing marketing itself?
Mark Grether: From a marketing perspective, a lot of AI is about efficiency: How can I execute campaigns more efficiently? How can I use agents for campaign reporting, setup, and measurement?
What we haven’t done enough is look at how AI is changing consumer behavior and what that means for marketing. What we’ve seen in our own data is that a lot of customer journeys don’t start with traditional search anymore. They start with AI. That’s a huge change for marketers. The question becomes, How do I reach consumers in this new journey with the right message at the right time?
Jeff Jacobs: From a growth perspective, what should marketers be thinking about as they apply AI?
Mark Grether: We understood audiences pretty well 15 years ago, but everyone saw the same big TV ad because it was too expensive and time-consuming to produce 50 different versions. Today, you can.
Mass customization—the individualization of messages—will be amplified with AI. There’s a huge opportunity to go much deeper into individual needs rather than broad segments.
C-Suite Growth Talks
The advantage of building AI-first
Jeff Jacobs: How do you move beyond pilot purgatory and one-off use cases to impact at scale?
Mark Grether: PayPal Ads is two years old, which means we’re still a baby. When we build out processes, we can do it with an AI-first mindset.
That gives us an advantage because we don’t have to change legacy processes or behaviors. We can build everything with an AI mindset, which gives us the speed to iterate quickly and grow much faster.
You could almost say we have a “late-mover” advantage. Others started earlier, but they may now be sitting on legacy technology stacks and processes. Building AI-first gives us speed and flexibility that is really differentiating.
How to bridge the goals of the CMO and CFO
Jeff Jacobs: When you sit down with a CMO and CFO together, where should the conversation begin?
Mark Grether: Start with resource allocation. We speak with both the CMO and the CFO, and often the first question is for the CFO: How much should the company invest in marketing, and how can that investment help drive market share? Then we speak to the CMO about incrementality: If I spend a dollar on one platform rather than another, what incremental return on investment does that dollar generate?
Answering that requires a consistent way to measure impact across investments. That gives the CFO and CMO a common basis for deciding both how much to invest in marketing and where that investment can have the greatest impact.
What happens when the marketing funnel becomes a cylinder
Jeff Jacobs: Commerce media is often associated with the lower end of the marketing funnel. How do you think about brand building?
Mark Grether: One challenge is connecting brand dollars with transactions. How can we almost turn the funnel into more of a cylinder and become more efficient in who we reach to build awareness among the people most likely to convert?
There’s also an opportunity for greater collaboration between us and retailers. A retailer may be a PayPal customer or partner while also operating its own commerce media business. We may want to reach its customers, while it may want to reach consumers across PayPal or Venmo.
That changes the conversation from “How do we compete?” to “What can we do together? How can one plus one equal three?” For example, we’ve run multiple successful campaigns with Best Buy that delivered a strong return on ad spend. Increasingly, those opportunities start with conversations between CMOs or advertising leaders about how the combination can create more value than either company could create alone.
