Friday, December 14, 2007

Is It Time for a PayPal Ad Campaign?

With Paypal increasingly becoming the favored child of eBay, Inc. and distancing itself from its older sibling (eBay Marketplaces) the announcement yesterday of the hiring of 4 new executives makes lots of sense. The future for PayPal is outside of the protective walls of eBay and these 4 new executives, while established payments professionals, are outsiders to eBay.

I originally just glanced over the list of new hires until this morning when I noticed one of them was the new PayPal CMO (Chief Marketing Officer).

Barry Herstein is Chief Marketing Officer, responsible for PayPal's global branding and marketing initiatives. Herstein was formerly CMO for American Express International's consumer business where he developed and implemented integrated consumer marketing strategies designed to grow AmEx usage outside of the U.S.

While, it appears Mr. Herstein was brought on to develop the Global PayPal business, I believe if PayPal wants to get traction on the other side of the eBay wall, they need to consider a comprehensive ad campaign including, for the first time ever (as far as I can tell) a TV ad campaign. After all Visa, Amex and Master Card all do extensive TV advertising. If PayPal wants to play with the big boys they will have to also. PayPal is an established brand on eBay but needs to become a worldwide consumer brand, that requires the kind of reach TV provides.

Just one suggestion, hire an agency other than BBDO, New York.

Just my 5 cents


ONLYEBAY said...

Interesting take. I agree with you this could be in the works. After all, a CMO of this calibre won't be happy with a budget limited to banner ads!

Randy Smythe said...

With the competitve pressures on PayPal and growth of the non-eBay business they need to expand the brand. TV would certainly do that. It is still the most powerful consumer marketing tool available.

Anonymous said...

Credit card companies advertise on tv to the consumer, in an attempt to get them to use or sign up for that card and use them at the places they normally pay for goods and services instead of using a different card or cash.

They can do this because they have the huge market penetration.

At this point I would think it would be more effective for PayPal to advertise direct to vendors to get them to accept PayPal, like they surely did with Southwest and Blizzard.

Until PayPal gets brick and mortar penetration levels that most credit cards have, I don't think tv advertising would be the best use of advertising budget

Randy Smythe said...

I think they will continue their efforts to sign-up merchants as you pointed out but since most paypal account holders are currently eBay customers they need to reach out to new consumers.

Merchant's are signing up to accept Paypal as a payment option because it has a pretty significant customer base but PayPal needs to branch out to introduce PayPal to a new group of consumers. That requires TV, IMO

The creation of the CMO position and hiring of an ex-AMEX CMO certainly tells me they are looking past just signing up merchants.