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Changes by Apple to limit how companies track iPhone users have created an opportunity for Shopify to turn its advertising business into a growth engine this year, president Harley Finkelstein told the Financial Times.
Why it matters: Shopify is doing the new year, new me thing (relatable, to be honest) after a painful 2022 that saw its share price fall 70%. E-commerce growth stalled as Covid lockdowns ended, and now the company needs to find another way to grow quickly.
- The company rolled out its advertising product, Shopify Audiences, last year, but Finkelstein’s comments suggest it will be a bigger priority in 2023.
Shopify’s advertising advantage stems from Apple’s privacy rules, implemented last year, that (among other things) severely restricted how companies can track and target people for digital ads.
- That policy made digital advertising on platforms like Facebook and Instagram less effective and more expensive.
- But Shopify is able to pool vast troves of data from all its storefronts in a way that allows individual merchants to better target ads without violating Apple’s privacy rules.
Zoom out: A bigger investment in its advertising platform would allow Shopify to open up another front in its fight with Amazon, which already earns nearly US$10 billion per quarter from its own fast-growing ad business.