PayPal to Increase Marketing Spending to Promote Offline Efforts

By | Jul 10, 2013

PayPal President David Marcus announced in May that the eBay-owned payment company will this year up its marketing efforts with increased spending as part of an effort to move into physical stores.

"You'll start seeing us amping marketing up later this year," Marcus said.

In pursuing a much larger market than its internet beginnings, the company expects to be operating in 2 million stores at the end of 2013 as it attempts to become a common method of offline consumer payment. Currently, Paypal is working on ways to attract consumers to use the service instead of credit and debit cards.

Through the use of a smartphone app customers would use the service at store checkouts, or by typing in a mobile phone number and four-digit PIN at counters. Also, shoppers can purchase goods with a card linked to their PayPal account.

"Swiping a card in a store is not hard," Marcus explained. "We really have to bring a lot of value to consumers to change that behavior."

The company's marketing is playing a big role in the push. So far they have used actor Jeff Goldblum in various online promotional video ads.

In 2011, eBay commissioned a large TV ad campaigned which helped revitalize its virtual marketplace. EBay delayed marketing efforts until it had solved customer problems with the website and PayPal is adopting a similar approach in its expansion to physical stores.

"We want to make sure we have enough density of consumer experiences before we do a lot of marketing," Marcus said. "We have really only one chance at this and we do not want to disappoint customers."

The company has been experimenting with new ways to pay in Jamba Juice, a line of smoothie stores, where customers order ahead using the smartphone app and receive their drinks in another line.

This has been tested this at seven Jamba stores in the San Francisco Bay area, and will be made available at more stores across the United States. The company has plans for similar initiatives with other businesses which are to be announced at later date, Marcus added.

Marcus also explained that the company had created a new partnership with RadioShack Corp in which PayPal can now be used in all RadioShack stores.

Produced by IBM's Midsize Insider, based on Reuters reporting

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