The Future Of Advertising - Dr. Mark Grether

0:00The CMO Whisperer:Hey, welcome to The CMO Whisperer Show. I'm your host, Steve Olenski. Part marketing practitioner, part ad agency veteran, part journalist, I was a writer for Forbes for 10 years. I've had so many insightful conversations over the years with business leaders, to athletes, to celebrities, to of course, CMOs. The only difference now is instead of sharing those insights through written form, I'm doing it this way. My guest today is Mark Grether, SVP and General Manager of PayPal Ads. Mark has helped shape some of the biggest shifts in modern advertising, from co-founding Zaxxas at WPP to leading Sysmec, I hope I pronounced that right, he'll tell me, through its acquisition by Amazon, to helping grow Uber advertising into a billion-dollar global business with more than half a million advertisers.

0:50The CMO Whisperer:Today at PayPal, he's focused on building an advertising business designed to help merchants sell smarter and consumers discover more of what they actually care about. Mark, my newfound friend, welcome to the show. Steve, thanks so much for having me. You are very welcome. We overcame quite a few obstacles to get to this point, but we plow through. Okay, I'm jumping right in. And I want to start with commerce media, right? Which really become one of the biggest conversations in marketing. But I think a lot of people define it differently, right? And when you strip away the buzzwords, what does it really mean?

1:24Mark Grether:For us, it means kind of running an advertising program that is powered by transaction data. It's really about the fact that here at PayPal, we have the transaction data across 30 million merchants, 400 million consumers globally. And we use the transaction data and not just kind of behavioral insights or lookalike modeled data or whatever it may be to run advertising campaigns on our own properties, but also on the open web. And so we're using the transaction data for targeting. We're using it for measurement. We're using it for insights. We're providing closed loop attribution back to our advertisers.

2:03Mark Grether:Again, all powered by our transaction data. And we call it actually our transaction graph.

2:07The CMO Whisperer:So what do you think marketers taking a step back from PayPal when they hear the word commerce media? Are there misconceptions about it?

2:14Mark Grether:I wouldn't say there's a misconception. There's obviously a huge kind of excitement in our industry about commerce media, right? A lot of advertisers leaning in. And I do think that in many cases, they underestimate the power of commerce media because they typically just kind of work with a, let's say, single retailer, right? And a single retailer typically has limited transaction data. How often are consumers actually going to a single retailer, whether it's in-store or on-site? And then even if they come off, you only know what happens on your own properties, right? So in many cases, commercial media is very much limited to a retailer's perspective.

2:54Mark Grether:And hence, from an avatar's perspective, it's also quite limited to what you can do with them. In our case, we're obviously different because with PayPal, we're sitting across so many merchants. And as such, we are enabled to provide a much broader perspective on consumers. And therefore, I think we can provide a much kind of more comprehensive advertising strategy to our advertisers.

3:16The CMO Whisperer:I hope those sirens weren't coming for you, by the way.

3:20Mark Grether:Everything good, you know. Living in New York. Living in New York. That's what you have in New York.

3:25The CMO Whisperer:We keep it real here. So I love that. Okay. So we've gone from an internet built around attention, right, to one increasingly built around intent, right? Right, from attention to intent. How much, in your opinion, does that fundamentally change advertising from attention to intent?

3:40Mark Grether:I would actually go a step further, right? Attention, intent to actually action. Action in the sense of actually making purchases. I think that's the real power of commerce media. It's really about the action. It's really about what consumers not only browse for, search for, right, or eventually have an intention to buy. It's all about what they actually do buy. And I think that is the big, big difference in commerce media compared to what has happened in the past and how kind of advertising was executed over the last 10, 15 years. As we now getting so close to the actual action of consumers, obviously that signal is much, much more powerful for advertisers.

4:21Mark Grether:And again, helps them to better understand their audiences. So one key kind of benefit that we have is the richness of insights we provide to our advertisers based on the actions that consumers take across all merchants. And then deploying that insight one-to-one from a targeting capabilities perspective. I think the action piece is the big differentiator compared to what has happened in the past.

4:45The CMO Whisperer:So there's a four-letter word, and I believe it's a four-letter word, literally and figuratively, it's a silo, right? It's always the death of any brand. no matter what those silos are. But today, and for you, I want to talk about a lot of brands still separate media, commerce, CX, payments, and so on into different silos. Two-part question, why is that? And do you think those walls are starting to or eventually will come down, those silos?

5:12Mark Grether:I do hope so, because historically, right, there was media buying in TV operate differently from media buying in radio and print and out of home and social and search. And hence, you had to have specialists, right, in how to actually execute campaigns in these different categories. I think the big difference, if you think about it now, is that way of the transaction data spanning across CTV, across digital out of home, across social search, commerce media, right? You have a much more holistic perspective on how campaigns actually perform. And hence, the campaign execution is now more and more often actually across all different channels holistically in one single campaign.

5:57Mark Grether:Obviously, AI from an execution perspective is helping you in doing that. And so I do think over time, we are less siloed in campaign execution and in the evaluation how something performs in one specific area. And you have a much more broader perspective. And put yourself in the shoes of, let's say, a CFO, right? Because at the end of the day, the CFO is the one who decides how much money the marketeer is allowed to spend. And the CFO, he doesn't care whether it's search or social, right? Or CTV or whatnot. Most importantly, he cares how are we doing compared to our competitors? Are we actually winning share?

6:35Mark Grether:Or what do we need to do to win share, right? And that, again, requires this holistic perspective across all the touch points that you have with your consumers, across all the opportunities where consumers can actually buy your products. And that's when you think about PayPal, that's where we come in because we have this holistic view, right? We can provide the CFO with this kind of holistic view across all touch points where transactions happen. We can provide them with insights like market share. We can give them an understanding how market share actually could evolve depending on how much you spend in marketing.

7:05Mark Grether:And then you basically, once you've had this conversation with the CFO, once he has made a decision how much money to spend, you can then go to the next layer down and talk to the CMO and the agency how to best deploy the marketing dollars that you've given from the CFO. And if you come about that question, then it's actually all about incrementality. The question is, where do I spend my next marketing dollar to get the most bang for the buck? Where do I have the highest incrementality? Again, across all channels. It's not just within search or within social. It's about, should I spend the next dollar in social, in search, in commerce media?

7:42Mark Grether:Where should I spend my next dollar? Where do I get the most incremental outcome out of it? And so that's why I do think silos are going away to answer your original question. It is a much more holistic perspective, data-backed, data-driven. And you have to view across all the different channels from a transaction perspective. And that's exactly what we deliver to our advertisers.

8:01The CMO Whisperer:Not to be hyperbolic, but I truly believe if you don't, if you have silos now, you're really setting yourself up, right? Again, no hyperbole. And I think you will agree now more than ever, you cannot have departments working independent of one another.

8:17Mark Grether:You just can't. I completely agree with you, but that's also why there is a lot of kind of movement in the CMO organization, right? To exactly go to such a kind of holistic viewpoint. Yeah. And to your point away from the silence silos. And I would even say that AI is helping us because the execution, right, within silos is not done by agents. And therefore, as a human, you can step back for a moment, right, and have a more holistic view and a more strategic view across how you deploy media spend most effectively across the different kind of channels. Right.

8:52The CMO Whisperer:Okay, we got it. If I don't bring up an AI on this call, I may get in trouble. We got to pick your brand on AI. Of course we do, right? So the first question for someone like you, and I get it, there's a caveat that we're recording this on May 14, 2026. And it could change literally by the time we're done recording this, let alone in a year.

9:12Mark Grether:But as it sits right now, where do you think AI is going to change like commerce and consumer behavior?

9:18The CMO Whisperer:Where do you see the biggest impact on those two things, particularly commerce media and consumer behavior?

9:22Mark Grether:Yeah, great question. And I think right now, most of us look at AI in the form of how can I leverage AI to more efficiently execute campaigns? How can I improve AI from a targeting, from a measurement perspective, from a campaign execution perspective and whatnot, right? And yes, there is obviously a lot of value in doing that. But I think the bigger question, the more exciting question is the one you raised, how is actually AI changing consumer behavior? And so, for example, when we see, if we look in our data, that more and more consumers actually start the purchase journey actually on LLMs in chat, GBT, in cloud, as opposed to on search, right?

10:03Mark Grether:And so the initial impulse comes from LLMs. That's where they smarten themselves up what to buy. They may then go into search to fine tune their understanding of what product they want to shop for. And then maybe they go to a merchant to actually make the purchase. But the starting point of the customer journey more and more often, actually we see in our data, actually starts in chat GPT or cloud. And I think that has fundamentally changed over the last few, I would say maybe 12 months or so. The question is to what extent are we trusting our agents to shop on our own behalf? That's kind of the next step.

10:39Mark Grether:That's also where I would argue PayPal is very helpful because as consumers, we have a really inherited trust in the PayPal brand. when it comes to executing transactions, trusting PayPal with money, right? And so I would foresee a future where it's not just about the agents making purchases on your behalf, but also about who do you trust your money with when it comes to agents' commerce. And I do think PayPal is really well positioned in this new area where you trust PayPal, you allow an agent with PayPal to make a transaction on your behalf, right? Which is obviously no fraud, no things like that.

11:17Mark Grether:So I think that is kind of the next frontier. Less about cost efficiencies in marketing. It's more about changing or adopting to the change in consumer behavior. I think that's the next kind of big frontier.

11:29The CMO Whisperer:So I know one of the fears, and I have this fear as a consumer, and you probably do too, is because AI makes everything easier, if that makes sense. And having just so many pieces of content and marketing and ads just flooding, right, and more noise to me and i've thought this word is important 10 years ago let alone 10 minutes ago is relevance when the the brands to me that are able to cut through the noise that is just exploding of course with ai what would you say to what do you say to a brand who's like how do i make sure right that okay i'm gonna use ai anybody who says they don't is flat out lying first of all but you gotta stay relevant to your consumer and true to your brand does that make sense it makes

12:10Mark Grether:sense but at other that's why i do believe that even though we all talk about ai and about the the kind of um the kind of technical power that sits behind ai i would argue that brands emotions relationships become even more important than ever in the future if we are surrounded around with ai agents the few kind of folks that are left so to speak right we are getting closer and closer and relationships and branding and brands and a trust that you have in brands becomes even more important which is why you see a lot of advertisers now investing more actually in brand than they've done maybe three years ago where it was all about performance performance performance right and shifting a little bit back to two brands because in a world where ai is easily kind of comparing different products side by side the question really is from a consumer perspective how do you actually pick one product over the other.

13:08Mark Grether:Interestingly enough, most likely it is because you recognize one brand over the other, you trust the brand versus the other. You just don't have the kind of the detailed level to understand what a feature A versus feature B is really truly differentiating. And so you need to trust and you trust the brand. And that's again why I do believe even in an air world, it's almost ironically brand building becomes not even more important than ever. Yeah, yeah.

13:33The CMO Whisperer:Yeah. You know, in the past, advertising has really been good at predicting what consumers might want, whereas commerce data gets much closer to what they actually do, right? And the question is, do you think the future of marketing becomes less predictive and more behavioral?

13:47Mark Grether:It's a great question. Again, I do think that a lot of the both AI and the way how we execute marketing campaigns is predicated on the actual transaction data as opposed to the intent, right? And then we build basically backwards from the transaction data. And if you do know that someone actually bought a Groose, then we can also interfere what else he or she is going to buy, which complements this next vacation. So I do think it's a lot about the transaction as the hard signal when it comes to building audiences, running campaigns, and even AI, right? AI at the end, they also need to have hard data to rely on, which is they will also look for sources of transaction data that they use to power their own kind of algos and agents.

14:34Mark Grether:I do believe that the transaction data will become more important than ever. And I would even argue that the ones who have proprietary access to transaction data will actually have a competitive advantage versus others who are just having access to data that everyone has access to. Yeah, yeah.

14:51The CMO Whisperer:You know, we're now in this era now where it seems like every platform wants to become an advertising platform. Yep. And so the question for you is, what separates the companies that generally kind of have the right to play in commerce media from the ones who are just chasing ad dollars?

15:04Mark Grether:A couple of things. I mean, the first one is if you think about, you're right, everyone wants to build a retail media company, right? But most of them actually, they do not have truly differentiated audience data. And most of them don't have the scale to really pull it off. Because as an avatar, you don't want to spend money on the 100th retail media company, right? It's just too fragmented. You have to have differentiated data. You have to have scale. You also have to write internal kind of culture to be ready, right, to build an advertising business, which is typically kind of outside of your typical swim lanes, right?

15:39Mark Grether:And so it's not that easy to kind of build an advertising business from within scratch. But I do think if you are successful in doing it, the role of the CMO is fundamentally changing. And what I mean by that is that in the past, the CMO was typically considered a cost center, right? And most likely the CMO actually spent more money than the rest of the company spent on employees. So it's a huge cost center, right? But if you do commerce media, retail media right, suddenly the role of the CMO changes from being a cost center to becoming a profit center. because you eventually make more money in retail media that you're actually spending on marketing.

16:24Mark Grether:And hence the relationships that you have with vendors, with other advertisers is changing from being a buyer to becoming a buyer and a seller at the same time. And as a CMO, you suddenly need to be much more commercially minded. And so I think it's a fascinating time how the role of the CMO and the requirements for CMO is changing, right? It's not just about creative anymore. It's not just about data and performance anymore. It's suddenly you have to have a commercial mindset. You're becoming a buyer of media, but at the same time a seller of media, right? You're becoming suddenly the leader of a PNL.

17:02Mark Grether:You're becoming a profit center as opposed to just a cost center. So it's really fascinating to see and exciting, I think, for CMOs, how the role of CMOs are evolving in the world where we are now having the opportunity to build commerce media networks at scale.

17:16The CMO Whisperer:You're obviously preaching to the choir. You know, I talk to CMOs all the time and that's exactly the reality. And I would add an operator as well to that list of, right? But it's exciting. Some are a little intimidated, but others are going toward that as a challenge. They're going, yes, all I've ever wanted was the opportunity to own, kind of control my fate.

17:36Mark Grether:Exactly. You become a much, much more owner of your own destiny, right? Because suddenly if you actually now make money on selling media, you can yourself decide how much do you want to reinvest into marketing as opposed to begging the CFO to get an extra dollar to spend.