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Shopify Is an Advertising Holdout. How Long Can That Last?

By  |  April 28, 2022 6:00 AM PDT

Shopify has long held back from selling ads even as Amazon and other e-commerce rivals have leaned in. That’s because Shopify, which operates a shopping app and powers the websites of around 2 million online merchants, feared small merchants might be turned off if they felt pressure to spend more to get their products in front of customers.

But the company has a large trove of data on the shopping habits of millions of people that it could use to target product ads to them. And Shopify’s business growth has declined dramatically since November, so the prospect of running ads on merchant sites and its shopping app has never been more appealing.

Shopify’s dilemma is similar to that of Netflix. Leaders of the streaming app vehemently opposed ads for more than a decade. Then last week, after its subscription growth came to a halt, Netflix reversed course and followed its rivals by saying it would likely sell ads.

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