After the recent rollout of its “Audiences” marketing tool, Shopify wanted to find a solution to circumvent Apple’s changes to ad data collection, which ended the collection of third-party data without users’ express permission (most of which declined, according to Financial Times (opens in a new tab)).
While this is expected to cost the global advertising market billions of dollars, independent merchants will pay twice as much in mid-2022 to find new customers than the year before, according to Kaz Nejatian, vice president of product at Shopify. A sea shift in which practices are challenged does not necessarily have such a negative impact on all businesses.
Shopify audience
One such example is Amazon, which focuses its ad targeting on data collected internally; Apple guidelines still allow for first-party data collection.
Shopify Audiences handles similar types of data internally, despite integrations with Instagram and Google, which the company argues constitute first-party data, thereby bypassing Apple’s rules.
Shopify shares are down about three-quarters of their value from their post-pandemic highs in 2021, hoping the move will provide a healthy boost to its revenue.
The early rise in the company’s value saw its founder and CEO Tobias Lütke admit to overestimating the e-commerce industry’s growth following the easing of restrictions, according to Financial Times.
It has since announced layoffs of nearly 15% of its workforce as it looks to make cuts in other areas of its business. Company President Harley Finkelstein explained that Shopify has shifted its focus to operations with “short-term returns” in an effort to regain some market share.
While providing a valuable tool for businesses looking to grow their ad revenue, Shopify’s Audiences tool is getting some attention. Much of this revolves around the fact that retailers have to share data more openly with potential competitors, though Finkelstein explained that such concerns can often be negated when a company is thus able to sell more products.