Paypal preps Q2 marketing push after ‘clear positive’ ROI in 2014

Paypal is prepping a marketing drive for the second quarter of the year after hailing the “clear positive return on investment” its first global campaign yielded last year.

The payments service said 2015 would see a continuation of its focus on brand building championing how its payment options benefit people’s lives and the businesses that use its services. It has handed marketing a bigger role in its expansion plans that will see it split from parent business eBay later this year.

The campaign spurred Paypal revenue 18 per cent year-on-year to $2.16bn in the fourth quarter.

Paypal’s chief executive Dan Schulman’s background at companies such as American Express and Virgin Mobile gives him the consumer credentials needed to maintain momentum, eBay boss John Donahoe told analysts on a conference call for its first quarter earnings yesterday evening (21 January).

“PayPal really did marketing for the first time in 2014, and we had pretty clear positive return on investment. It was one of the contributors to those very high growth rates. Dan brings a lot of consumer marketing experience, and the 2015 plan continues and has even more marketing", he added.

“So the 2015 plan, which is, in many ways, a continuation of the current with more sharp focus is. And then [Dan's] simplifying the organisation to accelerate innovation.”

The push for a leaner organisation refers to a wider plan to slash around 2,400 jobs from Paypal, eBay Marketplaces and eBay Enterprise in the first quarter, which represents seven per cent of the total workforce.

Ebay posted a nine per cent year-on-year spike in revenue to 4.9bn in the fourth quarter. However, sales from the eBay marketplace e-commerce unit rose by just one per cent in the period to $2.33bn.

Donahoe attributed part of the revenue dip to an increase in operating expenses, which were 41 per cent of revenue in the quarter. The biggest drive of the lift was sales and marketing, he added, which drove traffic at Marketplaces and Paypal usage.

Moving forward, the business is revamping the user experience to make it more intuitive for users. Both marketing and product are very focused on that, said Donahoe.

Robert Swan, chief financial officer, added: "We're investing in marketing, improving product design and strengthening the SEO workflow to a more sustainable format. And we are prioritising our resources towards our core shoppers and doubling down on areas of strength like our $2 billion eBay Deals business."

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