March 1, 2022
Targeting users based on their browsing behavior is no longer possible, which means companies now need to figure out ways to show hyper relevant content without having user-specific data. In Meta’s Q4/21 earnings call, they cited Apple’s iOS privacy updates as a challenge, “there’s a clear trend where less data is available to deliver personalized ads. But people still want to see relevant ads, and businesses still want to reach the right customers.”
Product relevancy is the best alternative to user-specific data. For example, imagine you are buying coffee and after you add it to your cart, you are shown a coffee maker or coffee mug with the option to add it to your cart. The likelihood of adding to cart at this point in time is higher than if you’re shown the same product when you’re not already thinking about coffee (e.g. if you were buying a lawn mower). This is an experience most of us are already quite familiar with from online marketplaces.
Historically, for companies that wanted to go straight D2C or didn’t have a broad product suite, they could rely on user-specific targeted ads. However, because this is no longer possible, I think we’ll begin to see marketplaces become an even more important distribution channel. I suspect we’ll also see new companies get started that are focused on helping brands access product relevant distribution channels. Canal is one that I’m especially excited about! Of course, the key to getting this right — whether it’s with a marketplace or with a company like Canal — is making sure the products and brands are complementary but not competitive.