E-Commerce’s New Bullseye

DALL·E 2024 06 27 16.39.08 An image of a bullseye with an arrow through it, with blue tones and theme. The bullseye is centered with a clean and modern look. The overall feel is

Welcome to Katalys Connect – your weekly shortcut to the latest in performance marketing.

[Read time: 4 minutes]

What’s in this issue? Each Tuesday, we pack the latest trends, actionable insights, and industry breakthroughs into a quick read – ensuring you’re not just keeping up, you’re staying ahead.

  • Monetization: Discover how publishers tackle AI threats, boost affiliate revenue for Prime Day, and enhance retail media partnerships for precise data and brand safety.
  • Growth: Discover how publishers tackle AI threats, boost affiliate revenue for Prime Day, and enhance retail media partnerships for precise data and brand safety.
  • The Future of Commerce: Uncover Gen-Z’s shift from Google to Reddit for product searches, the launch of Shopify’s “Sidekick” chatbot to streamline merchant tasks, and the rise in online coupon use driven by economic pressures.

Publishers vs. AI Crawlers • AI Search startup Perplexity is bypassing content restrictions, training its model, and risking publishers billions in ad revenue losses.

  • Though major publishers like The New York Times, The Guardian, and Forbes have blocked Perplexity AI to prevent unauthorized content use, Perplexity seems to disregard these standards – despite claiming otherwise.

  • The publishing industry could lose over $10 billion as AI models use content and reduce traffic to original news sites, leading to significant losses in display and pre-roll video ad revenue.

Prime Day Playbook • Publishers are enhancing shopping experiences, increasing content, and using detailed audience segmentation to boost affiliate revenue for Amazon Prime Day 2024 – rumored for July.

  • Condé Nast is enhancing its site with original photos, video reviews, and real-time pricing updates, expecting higher conversions and affiliate revenue.

  • She Media is using detailed data to tailor shopping experiences, testing distribution through newsletters and platforms like Flipboard and Apple News for broader reach.

Publishers’ RMN Partnerships Publishers are becoming key partners for retail media networks (RMNs) by enhancing data precision, ensuring brand safety, and providing additional off-site ad inventory.

  • Publishers offer valuable first-party data from content engagement, providing advertisers with accurate audience targeting and helping them better understand buyer interests and behaviors.

  • Publishers also provide a brand-safe environment, crucial amid reputational risks from high-risk digital ads and inadequate content moderation, with minimal impact on purchase intent even near hard-hitting news stories.

New Era for Reddit Ads • Reddit’s new Conversation Ads integrate directly into discussion threads, aiming to leverage the platform’s authentic user interactions.

  • Reddit claims that combining Feed and Conversation Ads significantly boosts Action Intent by more than double compared to Feed-only ads (+2.44% to +5.46%).

  • New machine learning tools for brand safety controls will be introduced later this year, ensuring a secure environment for advertisers and maintaining the integrity of the platform’s ad placements.

E-Commerce’s New Bullseye • Target is expanding its third-party marketplace by integrating Shopify merchants, allowing them to sell to millions of new shoppers through Target Plus.

  • This partnership aims to boost Target’s marketplace, which lags behind competitors like Amazon and Walmart, by featuring popular Shopify sellers like True Classic and Caden Lane.

  • Following a 3.7% decline in comparable sales, Target’s collaboration with Shopify is a strategic effort to revitalize its market presence and improve sales performance.

AI Ad Control Meta and Google push AI-driven ad products, aiming to automate ad creation and placement causing marketers to worry about their ability to stand out.

  • In an economic climate where many DTC startups are struggling, brands feel pressured to adopt AI tools to enhance ad performance bringing concerns about transparency and control.

  • Many brands fear that relying heavily on AI for ad creation will result in homogenized content, eroding their unique brand voice and making their ads indistinguishable from competitors.
Future of Commerce

Social Media > Google • Young consumers are moving from Google to Reddit for product searches, favoring community-driven and authentic content over traditional search engines.

  • Gen Z is using search engines less for product discovery due to frustrations with mobile-friendliness and complex interfaces.

  • Social media usage for finding new brands has increased by 36% since 2018, with brands needing to focus on engaging social media content to reach Gen-Z.

Meet Shopify’s Sidekick • Shopify’s new “Sidekick” chatbot is set to assist merchants with tasks like generating discount codes and reports, enhancing efficiency for Shopify users.

  • The “Sidekick” chatbot is now live for English-speaking merchants in North America, providing tailored assistance with tasks and currently allowing other global merchants to join a waitlist to access the feature.

  • Shopify will also introduce additional AI tools, including automated product categorization and suggested replies for customer chats.

Shoppers Turn to Coupons With inflation and interest rates climbing, more U.S. shoppers are turning to online coupons to save money on their purchases.

  • A study by SimplyCodes reveals that over 60% of Americans actively seek and use coupon codes, with 54% reporting increased usage in the past year due to economic pressures like inflation and cost of living.

  • The majority of online purchases using coupons are for clothing and shoes (65%), followed by personal care and cosmetics (53%), with travel-related purchases trailing at 17%.

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