The digital advertising industry has long had a problem with identity. Many solutions built to help with this issue use estimates, probabilities, and other signals to attempt to identify consumers for better ad performance for ecommerce companies and advertisers. However, these aren’t always the most reliable signals.
PayPal released a brand-new tool that aims to solve this issue and offer more accurate ad targeting.
PayPal Creates a Solution for Advertising’s Identity Problem
The tool is called PayPal Ads ID, and it’s an advertising identifier that uses verified commerce relationships for identification, as opposed to signals like cookies or IP addresses. Historically, digital advertising has struggled mightily with identification.
In fact, only 21% of publishers, brands, and agencies say they are very confident in their ability to accurately identify and reach their target market on digital channels. This means nearly 80% struggle to reach and identify their audience, which leads to plenty of wasted ad spend, time, and effort among advertisers.
These difficulties among advertisers make sense, as relying on signals like cookies and IP addresses may help identify a specific device, but not an individual user.
This solution from PayPal aims to take advertising identification from something probabilistic that relies on guesswork and estimates to something deterministic that uses verified user data.
What is PayPal Ads ID?
PayPal Ads ID is an identity solution that builds advertising signals from browsing behavior throughout the PayPal ecosystem. It gets its verified data from the same accounts that consumers use when they shop and spend money with either PayPal or Venmo.
Unlike other types of signals, the signal quality within the PayPal Ads ID doesn’t weaken or change across different platforms, devices, or other environments, as it’s based on authenticated user accounts and data.
In fact, the solution is built on real purchasing data that includes more than 25 billion transactions across over 400 million PayPal and Venmo accounts. As a result, advertisers and brands can feel confident in using the signals built by PayPal Ads ID to achieve better and more consistent ad targeting.
Speaking about the solution, the SVP & GM of PayPal Ads, Mark Grether, said that “Identity is the foundation everything else in advertising is built on. For too long, that foundation has been guesswork”.
He also added that “PayPal Ads ID changes that. When your identity layer is built on verified commerce relationships, you’re no longer estimating who someone is, you’re reaching them with confidence.”
According to PayPal, this solution has been launched with a set of technology partners that are testing it by integrating it within open web, CTV, commerce, and native environments. This includes Rokt, Taboola, Magnite, and PubMatic.
How PayPal Ads ID Helps Advertisers and Brands
This new solution from PayPal has the potential to truly change the digital advertising landscape for advertisers and brands alike. First, it’s a more trustworthy and consistent alternative to cookies and other signals that may not offer great cross-device accuracy.
Next, the solution offers true closed-loop attribution. While other solutions make estimates, PayPal Ads ID aligns the transaction layer and identity layer to help companies measure actual outcomes.
For example, the solution can help brands track whether an ad actually led to a purchase, and which channels and campaigns drive purchases in general. This is important as sales by channel is one of the most important ecommerce KPIs to track.
The solution may also let companies reduce wasted ad spend by targeting more accurately the first time, rather than forcing companies to constantly shift and adjust ads to achieve results, or continuing to show ads to consumers who have already purchased their product.
PayPal Ads ID also helps you recognize the same audiences everywhere, no matter where they browse. While mobile devices are the most popular medium for shopping online, consumers today use a wide range of devices to search, browse, and purchase.
As a result, simply relying on cookies or IP addresses for identifying a consumer may no longer suffice, as they’ll likely use multiple devices to browse, and/or many people may use the same device at different times.
Taking Privacy Seriously
Finally, PayPal Ads ID was designed to be a secure solution for companies and consumers alike. The identifier is encrypted, deidentified, and aggregated to protect transaction details, user privacy, and even merchant names. Also, consumers have clear controls that let them decide whether or not they participate in PayPal Ads ID.
This is crucial amid increasing scrutiny of data collection and the ongoing evolution of global privacy regulations such as GDPR and CCPA.
While the solution is brand-new, it seems like it could grow into a solid solution for ecommerce brands and advertisers to improve match rates, boost return on ad spend (ROAS), and better recognize users across devices and platforms.
