In Depth

PayPal Goes Big On Buy Buttons

When “Mad Men” went off the air earlier this year, a slew of think pieces, listicles, memes and blog posts flooded the Internet, dissecting how different the world of 1960s was from the 2010s. And while those differences were hashed out in terms of style, language, workplace culture and gender relations – surprisingly little ink was spilled about how very different the advertising world of today is from the early television era of the great ad men that Don Draper and company were emblematic of.  

In the 1970s, a decade after the world of “Mad Men” came of age, buying an ad on television was a surefire way to gain access to 70 percent of American consumers – consumers who had little else both to distract them and access to discover new products and services.  

Flash forward 50 years and the situation is a whole lot different. The average consumer consumes nine DVDs worth of information per day on their non-working hours. And if the quick math on that seems to add up to something impossible for humans who also eat, shower, sleep, commute and converse with others, it is because consumers have become the ultimate digital multitaskers — and consume roughly 15.5 hours worth of data per day while doing other things. Other things, that, as this piece points out, has contributed to the humans having an attention span that is shorter than that of a goldfish (10 seconds).

Americans are still watching television at night (or some cord-cutter variation thereof) but they aren’t watching commercials nor are they even skipping past them; they are turning the volume down so they can shop, research products, post pictures of kids/pets, plan travel and learn celebrity gossip on their phones and tablets.

Which is giving rise to a wholesale disruption in the advertising business. Why buy ads if, instead, brands can embed a commerce experience inside of ads or contextual posts in the places consumers go to discover new things to buy.

Say hello to Modest, the company that as of yesterday, is now part of PayPal’s expanding commerce empire. Yesterday, shortly after the news was announced, Modest CEO and co-founder Harper Reed spoke with MPD CEO Karen Webster to discuss the acquisition, and Braintree’s General Manager and Chief Technical Officer Juan Benitez joined the conversation.

“When we founded Modest in late 2012/early 2013, our big goal was to solve and fix commerce on all the places where it doesn’t work,” Reed told Webster.

Or, more appropriately, didn’t exist.

Modest was thinking about the notion of buy buttons before buy buttons were a “thing” in commerce. The problem that Reed and his co-founder were trying to overcome back in the stone age of mobile commerce in 2012, was the lousy experience of conducting commerce on a teeny weeny mobile screen (think back to 2012, now…)

And the rest, as they say, is history. Modest and PayPal’s Braintree, which share Chicago as their home turf, realized that they were kindred spirits when it comes to their ambition to simply commerce – but not just on a mobile device. On a mobile device in an environment where commerce is more reasonably thought of as an “in the moment” buying opportunity.

“Braintree and PayPal have been working for quite some time to help merchants and consumers connect with mobile transactions. We’ve done that through a powerful SDKs for merchants and powerful buying experience for consumers – like in  our One Touch product,” Benitez noted. “What we can now do with Modest is enhance the next level of that foundation and plumbing, so that connections happening between the consumer, the merchant and the various [social] platforms of the world – like Pinterest – can have commerce interactions that are entirely smooth and seamless.”

That symmetry of focus – on both the consumer and the merchant side – is what Reed noted he thought made PayPal/Braintree the best home for his emerging startup, particularly as it works to do the one thing that all startups need to do to succeed long term: scale.  

“We’ve always seen that what we were doing had to solve a problem for both the consumer and the merchant,” Reed told Webster. “And, we found that we could solve those problems at Modest, but we didn’t have scale. Now [with the acquisition] we do.”

Reed is unusual for a payments player, or at least comes by way of an unusual background. Immediately before forming Modest he was the CTO for President Obama’s 2012 re-election campaign (Modest co-founder Dylan Richard was the lead engineer for the campaign). But Reed noted that in whatever business he’s been in — which has included a diverse portfolio of companies selling encyclopedias, garments (working with Threadless) or the wonderful world of accepting online donations — his career has really been about making it easier for exchanges of value of any kind to happen.

“The best part of this is making our solutions future-proof for the retailer,” Reed noted. “In the past retailers had such a hard time achieving the tech that fast firms are able to achieve. No longer is that the case, we can create tools that can make a retailer just as fast as any other technology company.”

And those tools — which they can now build alongside Braintree’s consumer payments capabilities — will help what Webster called the “data gap,” where merchants know that there are opportunities for conversions via digital upgrades, but are unsure of whether those opportunities are worth the collection of costs that can go along with enabling those channels.  

“What PayPal and Braintree have developed, and what Modest has built, are all premised on the merchant not having to make any meaningful changes,” Benitez noted. “They don’t need a different dashboard, they don’t have another level of complexity or another set of things to go manage to have these experiences. Taking what we all bring to the table is going to give us a chance to continue to further that and do an even better job of making this transparent for the merchant and taking the friction out.”

Because, at the end of the day, the new world of marketing and sales is to consumers who are on the go, and who will abandon their carts and run at the first sign of friction. “The next chapter is where it really gets fun,” Reed noted. After all, buy buttons aren’t only about making a sale for a retailer; they are also a chance for a consumer to get what they want.”

As with any acquisition that is less than 24 hours old (at least publicly) how all of the pieces come together remains to be determined, through both Benitez and Reed noted that the new roadmap will be shipshape very soon. And, it will also come in the form of a full collaborative effort of both teams, as the entire Modest staff is joining the PayPal/Braintree team and will be working out of their corporate offices in Chicago.  

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

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