2PM - Letter No. 902: Mount Shopify

Shopify's Enterprise Pivot: “This is now Shopify Mountain,” proclaimed MrBeast. The sponsored video was incredibly corny and overly-dramatic but no one can claim it didn’t have the intended effect.

Jimmy “MrBeast” Donaldson is a brilliant marketer, creator, businessperson, and philanthropist. And the timing couldn’t be better for Shopify. The company could use a bit of savvy marketing, value creation, new business, and a bit of charity after a difficult year. In that way (and in only that way), the partnership made sense. Donaldson spent ample time praising Shopify in the 12 minute advertisement; it has now been viewed 61 million times since its December 24th publish. To put it in perspective, this is over 1/2 of the typical Super Bowl ad viewership for what I suspect was a fraction of the cost ($7M). (Read More...)

Shopify in advertising push to fill void left by Apple crackdown

Advertising in focus / FT 🔐: Shopify is seeking to fill a lucrative gap in marketing data left by Apple's privacy crackdown by offering retailers a new way to target potential customers through the world's largest ad platforms. Harley Finkelstein, Shopify's president, told the Financial Times, that after striking alliances 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 $46bn company to make cutbacks in other parts of its business.

Google and Meta's ad dominance fades as TikTok, Netflix emerge

Advertising in focus / WSJ: Amazon further solidified its spot as third-largest digital-ad platform in the U.S. last year For the first time in nearly a decade, the two largest players in online advertising are no longer raking in the majority of U.S. digital-ad dollars, a decline that industry insiders expect to continue in years to come.

DTC brands are embracing traditional marketing mediums

Advertising in focus / AdAge: Not only are catalogs replacing some digital marketing strategies, but for DTC brands that don’t have a physical footprint, they can also take on the role of a typical brick-and-mortar store, as is the case for Smartwool. The brand is predominantly known for its wool socks and base layers, but it is using catalogs to showcase its broader product selection, including activewear, said Denise Anderson, head of global marketing and creative for Smartwool. 

Hollywood talent agencies seek new deals tied to Netflix ads

Advertising in Focus / FT 🔐: The creative talent behind shows on Netflix's new ad-supported service should earn more money if their series are popular with viewers, the chief of one of Hollywood's top talent agencies has argued, a move that would represent a major shift in the streaming pioneer's model.

Advertising has changed significantly over the years, particularly with the rise of digital media. The first four points are widely understood. But it's point five that seems to have shifted digital media away from "the use of data and personalization" and "targeting specific audiences" to using homegrown versions of consumer data (first party) to attract advertisers to new platforms. This includes; Amazon, Netflix, and Shopify.

1. Shift from traditional to digital media: There has been a significant shift from traditional media (such as television, radio, and print) to digital media (such as the internet, social media, and mobile apps). This has changed the way that companies reach and communicate with their target audience.

2. Increased use of third party data and personalization: With the rise of digital media, it has become easier for companies to collect and analyze data about their target audience. This has led to the increased use of personalization in advertising, with ads being tailored to the interests and behaviors of individual users.

3. Rise of programmatic advertising: Programmatic advertising refers to the use of software to automate the buying and selling of advertising. This has made it easier for companies to target specific audiences and track the effectiveness of their ads.

4. Increased use of video: Video has become an increasingly popular format for advertising, particularly on social media and other digital platforms.

5. Changes in regulation: Apple’s iOS 14.5 privacy update cut Facebook and Instagram’s successful advertising businesses off at the knees, stated here as a loss of access to the company’s “primary stream of revenue”. It was a critical move that Apple positioned as a win for user data privacy. But, as we have mentioned a number of times, it’s also Apple building a walled garden (or a content fortress), no longer letting companies like Meta and Google serve their customers without paying a tax to Apple for allowing it.

Updated For January 1: All categories of the list have been updated with major movement throughout the list. Of the major movers, look at the following brands: Diff Eyewear, Rudis, Lola, Wilton, Food52, and James Allen. We’ve updated the “previous” column to better illustrate positive (+) and negative (-) movement. A “0” means no movement at all. A major update to the list is in the works. 

Data: the secret weapon for eCommerce merchants

Data / SupplyChainBrain: The year 2022 was one of slower growth for e-commerce, as markets reverted to pre-pandemic levels. Despite this, merchants, analysts and investors are optimistic that online shopping will continue to grow in 2023. It has been projected that worldwide e-commerce sales will surpass $6 trillion in valuation and make up more than 22% of total retail sales, up from $3.4 trillion (13.8%) in 2019.

Retail apocalypse warning after Macy's begins 100 store closures

Retail Real Estate / The Sun: MORE department store closures have been projected for 2023, with even some of the most popular retailers potentially affected. With Macy's plans to close 125 locations over the next three years, experts warned that other major retailers such as Nordstrom and Kohl's could be following in their footsteps.

Wall Street speculates Bezos could return as CEO

eCommerce / Daily Mail: Wall Street analyst Michael Batnick predicts Bezos will 'pull a Bob Iger' in 2023 Batnick thinks Bezos will return and replace his hand-picked CEO Andy Jassy In November, Iger pulled a similar move and replaced his successor Bob Chapek Amazon stock suffered its worse decline in 2022 since the Dot Com crash.

Logistics industry sheds paperwork in race to the digital frontier

Logistics / Bloomberg: As former Amazon.com executive turned Flexport Co-CEO Dave Clark told Bloomberg in an interview, “we’re early innings still, or maybe the late innings of the first phase, which is people starting to get their data digitized and have visualization of their data.”