Home Ad Exchange News Meet Shopify Audiences (But It Ain’t Advertising); Microsoft Bing Embraces Chatbot Mode

Meet Shopify Audiences (But It Ain’t Advertising); Microsoft Bing Embraces Chatbot Mode

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Comic: A.I. Ad Campaign

Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.

The One-Stop Shop

Shopify is loath to earn ad dollars, but fills a valuable niche as a payment data supplier for Google, Meta, TikTok, Snapchat and Pinterest. 

Although Google and Meta have their own first-party payment data strategies (see: Facebook and Instagram Shops, Google Pay, et al.) – they don’t have Google or Meta-level scale. But Shopify Audiences, Shopify’s solution, pools purchase data from across retailers and merchants to create lookalike audiences and attribute sales. 

Generating audiences is a win-win for Shopify and the platforms. Earnings are limited, because Shopify takes no cut of ad budgets, but campaigns direct traffic to Shopify, which means it’s able to collect the payment processing fee. Low-hanging revenue is nothing to sniff at. Plus, it’s a value-add to merchants struggling with marketing growth. 

“Especially right now, merchants want to be able to find more customers,” Shopify President Harley Finkelstein tells the Financial Times

Also important: Google’s and Meta’s involvement implies that the question of whether this data-sharing arrangement passes muster with Apple’s ATT has been settled.

Plenty of ad tech vendors pitch this type of service and, realistically, if they’re not overselling what they’re able to do, they’re probably violating privacy policies. Shopify’s claim to first-party data rights, apparently, clears the bar.

BinGPT

Microsoft will update the Bing search engine to return conversational text for certain queries, The Information reports.

If this humanlike AI response machine sounds like ChatGPT, that’s because it is ChatGPT. 

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In 2019, Microsoft invested $1 billion in OpenAI, the maker of ChatGPT and AI image generator DALL-E. ChatGPT has since emerged as a tool potentially powerful enough to shake Google from the top down – which is not easy. TikTok, by comparison, has been hailed for years as a search engine challenger, but remains just a blip on Google Search’s own competitive radar. 

Integrating ChatGPT’s conversational element into Bing is a huge opportunity in its own right, not to mention the side benefit of PR buzz and getting people to consider Bing as a Google alternative with a differentiated selling point … rather than as a shadow version with a generous rewards program for Xbox customers.

So, is the robot revolution nigh? Not just yet.

There are limits to what ChatGPT can do via Bing or otherwise. As OpenAI CEO Sam Altman acknowledged in a tweet a few weeks ago, “it’s a mistake to be relying on it for anything important right now.”

Downwardly Mobile

Apple’s ATT’s effects on mobile gaming will become more apparent in 2023, predicts Eric Seufert at Mobile Dev Memo.

ATT and the post-COVID rightsizing of mobile commerce were a drag on mobile gaming, which shrank by 6% in 2022 compared to 2021. And growth is unlikely to rebound by even 5% YOY in 2023, even with improvements to Apple’s measurement tech.

Mobile gaming companies must pivot. Larger game publishers might rely more on M&A than user acquisition to add DAUs, since ATT has made direct-response advertising less effective.

Likewise, since mobile marketers aren’t achieving the same ROAS post-ATT, many game developers will spend less to promote their games in other games. This leaves a major inventory vacuum, since games often advertise within other gaming apps. Brand spend could grow to 10% of in-game ads as a result, but game developers must win new, nonendemic budgets.

Google’s Better Ads Experiences policy will also be a blow to hypercasual games that grow their DAUs by advertising in ad-heavy “feeder apps.” It’s a terrible user experience and super low-quality supply, but many games do rely on the tactic.

But Wait, There’s More!

The year ahead in privacy and your data: Expect less third-party tracking and a lot more ads. [Gizmodo]

Paramount Advertising announces an integration with Unified ID 2.0 for CTV campaigns. [release]

Marketing and fundraising company Moore announces the acquisition of Merkle’s Response Management Group. [release]

Privacy tech startup Caden raises a $6 million seed round. [release]

Amidst the market carnage, a silver lining is emerging for some ad tech companies. [Digiday]

You’re Hired!

Teads promotes Monique Pintarelli to president for North America. [release]

Amanda Forrester joins OpenX as VP of marketing. [release]

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