I need to admit something, something that nearly everyone I have ever spoken with vehemently denies and yet the industry is predicted to generate $407 Billion in revenue this year - I have bought something after clicking on an ad.
Even more so, I am proud of this behavior. I know it’s shocking to hear someone so brazenly declare that they enjoy seeing an ad and purchasing an item they need or want. I am in a select few who participate in an industry, eCommerce, that contributes to a large portion of the $86 Billion in Revenue that Facebook made in 2020.
The term “personalized advertising” has been discussed at length given the updates from Apple and Google. Mobile web does not have platform neutrality. Apple and Google are the dominant mobile platforms, and they are the gatekeepers to who and how one plays on their hardware. Apple is unilaterally changing its rules and is forcing the industry to comply.
I am a fan of experiencing this personalized advertising. When the prompt appears in various social apps asking “will you allow tracking”, I’ll be part of the tiny cohort expected to opt-in.
What is the benefit of all this tracking to the end consumer? Outside of the 2015 study from Deloitte that Facebook’s as a platform created 4.5 MM jobs globally and contributed 227 Billion to the global economy that year alone.
Let’s explore a modest example.
Have you ever wanted to purchase an item? Perhaps you wanted to buy a new baseball cap and didn’t want to support Amazon. Welcome to the power of personalized advertising and it’s shopping experience!
All you need to do is visit any hat store that is well ranked in a google search. That store will more than likely have a Facebook Pixel in place. Click around the site a bit, maybe add a hat to your cart but here is the twist... don’t purchase anything.
Then go about your day. The average person consumes about 300 feet of newsfeed on Facebook or Instagram a day. Before you can hashtag the latest pic of you and your pup, you will start seeing ads in that newsfeed related to baseball caps. Click on the ads and window-shop a bit more in a given store.
Rinse and repeat until you find the perfect baseball cap for your needs. Facebook’s personal advertising experience eventually served me an ad from Sendero Provisions.
Don’t know who Sendero Provisions is? Neither did I.
I found a great hat that even donates to a national park I absolutely love - Yosemite.
Personalized advertising allowed me to support a small start up of what appears to be three dudes who like the outdoors. The horror.
This is the big, bad boogie-man at the center of all the news stories and Netflix documentaries.
If you are brave enough to participate in the $400 Billion industry of eCommerce, you too can use Facebook’s personal shopper feature to find new brands in all sorts of verticals: mattresses, bicycles, blenders, diapers, vitamins, shirts, cars, etc.
Simply follow these steps:
This process of Facebook predicting that I am interested in hats and serving me more hat related ads is what is threatened by the pixel updates. We don’t want to discount the issues with user privacy; however, we have not seen one article written about how many small companies benefit from these algorithms.
There are over 500,000 active merchants on Shopify. Unilateral changes by one platform or another will impact their ability to serve “hat” ads. Until we update our society to not be consumption driven, people buying goods and services are quite important to keeping the world turning.
The phone book no longer exists and it is difficult/expensive to buy a TV ad. Social networks allow these SMBs access to new customers and personalized ad algorithms provide a useful service to both the store owner and end consumer.
Weirdly, none of these changes to advertising “privacy” will negatively impact Apple or Google’s ability to effectively reach people within their walled ad buys. The story is not the same for any competitor.
Over the next several weeks we will be writing about the potential impacts and more specific predictions as we are ever closer to the A-Pixel-Lypse. Overall, we want to provide the market our recommendations on building resilient marketing systems.
“Wind extinguishes a candle and energizes fire." Time to be a system that is energized by these winds of change.