Canada’s eCommerce giant Shopify recently introduced a tool allowing retailers to pool customer data and better target ads in the wake of Apple’s ongoing privacy crackdown.
Harley Finkelstein, Shopify’s president, revealed that after establishing partnerships with Meta and Google in 2022, its “Audiences” marketing tool was a key area of focus at a time when an eCommerce industry slowdown was forcing the $46 billion company to make cutbacks in other parts of its business.
Marketers can then target ads at “lookalike” customers who might be more likely to buy their products because they purchased similar items from another retailer.
The new system was launched to skirt Apple’s rules against tracking iPhone users, which put a multibillion-dollar dent in the online advertising industry last year and compete with Amazon’s fast-growing ads business.
Shopify Audiences could offer a considerable growth opportunity during a recession. Cash-strapped consumers are squeezing retailers even if it is not a significant money maker for the eCommerce platform. Advertising has already become big business for Shopify’s rival Amazon, which allows third-party sellers to advertise their products on its marketplace.
Amazon’s advertising revenue grew 30% to $9.5 billion in the third quarter of 2022, excluding currency fluctuations. Traditional retailers, including J Sainsbury in the UK, are already emulating the strategy.
Apple’s introduction of a new requirement for mobile device developers to obtain consent to track users between apps and websites has caused an uproar across the online advertising industry over the past 18 months.