Location-BasedMobile Advertising:Q1 Highlights

Q1 2014

1Quarterly Report Q1 2014

Location-based advertising provided a 36% lift in CTR on average compared to campaigns that didn’t leverage location. The Computers & Internet category saw the greatest boost, with an 11% lift in CTR from location-based targeting. CPG and Cable and Phone Services rounded out the top 3.

Location-Based AdvertisingBoosts Performance

36%

x

11% 4%7%

Source: PayPal Media Network, Q1 2014

2Quarterly Report Q1 2014

Mobile users who were located within 1-6 miles of an advertised location were most likely to engage with an ad.

Proximity Matters

0-1 3-4 4-5 6-75-6 7-8 8-9 9-10 10-15 15-20 20+ miles0-1 1-2 2-3

1.00%

0.99%

0.87%

0.94%0.89%

0.88%

0.90%

0.86%

0.84%

0.89%0.88%

1.01%

1.00%

Source: PayPal Media Network, Q1 2014

InsightProximity is key in the Quick Service Restaurants category, which had its best performance in the 1–3 mile distance band.

3Quarterly Report Q1 2014

New York was the most targeted city on our network, with almost twice as many geo-fenced impressions as Los Angeles, the second most targeted city on our network.

New York City

Los Angeles

San Francisco

San Diego

Houston

Chicago Philadelphia

Las Vegas

DallasSan Antonio

Source: PayPal Media Network, Q1 2014

Top 10 Geo-Fenced Cities

4Quarterly Report Q1 2014

Other

Map

Learn More

Purchase

Call

View Product (1%)

Play Game

20%

8%

2%

2%

5%

6%

27%

28%

Coupon (1%)

Visit Website

Select Location

Source: PayPal Media Network, Q1 2014

Geo-targeted campaigns showed a strong effect on actions associated with purchase intent, with more than half (52%) of landing page clicks comprised of lower-funnel actions – Map, Purchase, Call, Coupon, or View Product.

Mobile Advertising Drives Lower-Funnel Actions

5Quarterly Report Q1 2014

Retail Dominates Q1

Top 10 VerticalsRanked by Number ofCampaigns

1. Specialty Retailers 2. Automotive Sales & Services 3. Apparel Retailers 4. CPG - Consumer Packaged Goods 5. Big Box Retailers 6. Financial Services, Products & Insurance 7. Travel & Transportation 8. Computers & Internet 9. Cable, Phone, & Internet Services 10. Health - Medicine & Services

11%9%

6%

5%

5%

14%

13%

16%

16%

3%

3%

Specialty Retailers

Automotive Sales & Services

Apparel Retailers

Consumer Packaged Goods

Big Box Retailers

Financial ServicesProducts & Insurance

Travel & Transportation

Computers & Internet

Health - Medicine & Services

Cable, Phone, & Internet Services

Other

Source: PayPal Media Network, Q1 2014

Retailers ran 38% of geo-fenced campaigns on our network in Q1 underscoring the importance of location-based targeting for driving consumers into stores.

Who is Leveraging Geo-Targeting?

6Quarterly Report Q1 2014

Case Study: Auto Save Closed Loop Offer

advertising.paypal.com (866) 649-4373 | advertise@paypal.com

1-800

Objective

1-80

• Acquire new customers• • Increase basket size among existing customers

Solution

Usin

The target lists used purchase intent segments,

Results by goal & audience segment

ACQUISITION:

GIFT GIVERS

4.4:1 ROI

REACTIVATION:

DORMANT CUSTOMERS

4.5:1 ROI

INCREASE BASKET:

EXISTING CUSTOMERS

4.3:1 ROI

ACQUISITION:

LOOKALIKES

2.4:1 ROI

an initial email or ad impression through to the

7Quarterly Report Q1 2014

7.3 million people bought lunch at a quick service restaurant in the last 7 days.

19 million people have taken a beach vacation over the past 2 years.

1.4 people have made an in-store purchase at Neiman Marcus in the last 30 days.

18 million people shopped online for a car rental in the past 6 months.

4.1 million people will purchase a new residence within the year.

5.2 million people plan on buying an iPad in the next half year.

1.6 million people on our network like to golf and own a Dell computer.

In the past 7 days, 700,000 people on our network have had a Coca-Cola classic AND a regular Pepsi.

283,000 people on our network live in an apartment and work for a non-profit organization.

1.3 million people on our network are in between the ages of 25-34 and are getting married within the next 12

months.

1.8 million people on our network have stayed in a Best Western in the past 3 months AND currently own a cat.

991,000 people on our network read the New York Times yesterday and own a Visa debit card.

50,200 people on our network have been to Chipotle for dinner this week and own a fish.

PayPal Media Network Reach Facts

PayPal Media Network Fun Facts

Source: Nielsen Mobile @Plan