Shopify Shares Data With Merchants to Support Targeted Ads

Shopify is aiming to grow its revenue by helping retailers deliver targeted ads. 

The eCommerce platform is using its recently announced partnerships with Meta and Google to identify and help retailers reach potential customers, the Financial Times (FT) reported Monday (Jan. 2). 

“Especially right now, merchants want to be able to find more customers,” Shopify President Harley Finkelstein told the FT. 

At a time when consumer spending has been slowed by economic uncertainty and rising inflation, the company’s tool, called Shopify Audiences, helps retailers deliver targeted ads. 

Shopify Audiences enables retailers to upload their customer data to Meta’s advertising platform, which then use the information to allow marketers to target their ads to consumers who have purchased similar products from other sources, according to the report.

When announcing the launch of this service in May, Shopify said that it provides a new, cost-effective way to reach those who are ready to buy. 

“Shopify Audiences uses the collective power of Shopify merchants that band together to unlock the power of their data,” Shopify Senior Product Lead Jonathan Zhao wrote in a May 11 blog post introducing the service. “Buyers who purchase from our merchants are some of the highest quality customers on the internet.” 

For Shopify, this tool has become a key opportunity because eCommerce sales have been slowing.

While retailers may be hesitant to contribute data that will be pooled and then used by other merchants — who could include their competitors — they also see their participation in Shopify Audiences as a way to reach new potential customers. 

In an email to PYMNTS, a Google spokesperson said there aren’t any new abilities for Shopify merchants than they already had with their Google Ads accounts, noting that Shopify merchants can only use their store-specific customer lists — also known as first-party data — which customers have given permission for that merchant to use, and that Shopify merchants still must comply with Google policies to upload data to Google Ads.

“There’s always going to be some apprehension about sharing data,” Finkelstein told the FT. “But that’s often offset by net net, am I making more money, am I selling more?” 

Many retailers are showing a renewed interest in ad sales. 

As PYMNTS reported Sept. 22, Walmart and its Sam’s Club warehouse unit made major media pushes at that time, while Amazon Advertising launched new ways for sellers to stand out in the “Attention Economy.”