Hello. Wowsa! You all showed up for this newsletter relaunch last week. I'm humbled and now feel a sense of responsibility to bring it. Before we dive into today's main topic, Shopify ads, I wanted to discuss the tone of the email.
The casual tone differs from your typical B2B SaaS marketing email/newsletter, as I want it to feel like we're having a chat or a consulting sesh together. I'm generally fairly casual, so why would this be any different?
In Today's newsletter, we'll discuss:
Random thoughts about Shopify Editions
Shopify Ads
An app spotlight that doesn’t get enough exposure
Shopify Editions - Winter ‘24
It's always so exciting to hear the latest news coming down from the mothership. The news is always packed with so many fun enhancements. This year Shopify sent out some packages to a few partners throughout the world to celebrate. It was fun seeing the unboxings and product layout shots across X. I’d been wanting Shopify to offer more merch to partners and Shopify Supply delivered. Did you order the keyboard yet?
Shopify Unite
I will always remember the big news during the second Shopify Unite in San Francisco: Loren Padelford announced a multi-lingual and multi-currency rollout prematurely. It didn't matter - that is what everyone wanted to hear.
On the app side
Enough overviews of these announcements are available so I won't bore you with the blow-by-blow updates on theme upgrades, marketing for merchants, AI and all of that exciting stuff.
On the app side, this year was massive with Shopify going beyond the 100 variant limitations that had devs and merchants in a chokehold for literally years. This was an announcement that I would have honestly loved to have witnessed live in an auditorium within the ecosystem. Imagine fireworks going off over the Golden Gate Bridge level of wowie!
In my opinion, the other big whopper of an announcement was adding native subscription functionality to the platform. I’ve seen some screenshots of people playing around with it so far, and it looks pretty amazing.
With the cost of Shopify going up for merchants, having out-of-the-box functionality available without having to use apps for the basics of those features makes perfect sense for merchants to get the value out of their subscriptions.
For the apps that built their livelihood off those weaknesses within native Shopify, ie subscription apps, customization apps, bundle apps, just continue to innovate beyond what Shopify builds in to the platform. You will for sure still have a place for merchants to grow with you.
The takeaway is to continue to offer value within your apps beyond the basics. This ties into what I said during the last newsletter, and I will probably bring it up repeatedly; it's crucial for apps to never rest on your laurels. Prioritize development over all else always.
On the marketing side, having Shopify build these basic functions in can only drive awareness to apps with more sophistication. The ideal customer that you want to install your app anyway will outgrow what is natively available to them, and look towards your solution. We can call these the "graduation" apps for merchants who outgrow the basics and need more. Stay tuned: I want to continue this conversation when we discuss pricing in our next issue.
AR/VR
What has been missing since Shopify stopped in person partner events…
AR/VR innovations available to merchants. Who remembers the first Shopify Unite where we played with the HTC Vive? We fantasized about the day that commerce would occur exclusively in virtual reality, and we explored what that could look like in its infancy.
Apple made a big move last week by releasing the Vision Pro. And last week, Apple released over 600 apps and games that will be compatible to use with the device. BRAVO Apple. This is a move towards making this tech more accessible to people. It's not lost on me that the price point is not for the average, but we're getting there! Baby steps!
During the 3rd Unite in Toronto, we played with products on mobile devices in augmented reality. That was so sick!
All is not lost in this world, as the website itself for Winter Editions flexed some wild 3D animations and graphics. Shopify Supply showcases a lot of bells and whistles of what is possible for merchants to do with fun animations. This reminds me of the early flash website days. IFKYK
I don't love the use of the word "BUT" here... But where is the promise of a greater future using this technology that is approachable to merchants this year? If the first Unite was almost 8 years ago (GASP), did no one else expect to be further along for merchants to have this tech available at a reasonable price point by now? Am I asking for too much too soon?
Well, you can still partner and build something within the 3D space with Shopify. Mark my words that you will wish you jumped on this sooner than later. Just sayin.
https://www.shopify.com/3d
Did you know that I offer consulting calls for Shopify app operations? Please reply to this email to book a session with me to discuss the operations of your Shopify app.
Shopify Ads
I've seen a lot of buzz on X (formerly Twitter), where Shopify devs complain about Shopify ads not being the most profitable channel. I have managed Shopify ad campaigns across various apps with varying degrees of success. Before I go into what I know to be true, if you tried Shopify ads in the past and failed, I suggest implementing the age-old saying - if at first, you don't succeed at testing out a marketing channel, try again later. You never know if the timing was off before.
What success looks like initially
In my experience, what makes a Shopify ads campaign successful comes down to the following things:
A strong app with excellent UI/UX and valuable features at a fair price.
If your app is in a competitive category, merchants will install a few different options, and the best app wins in providing value. The others will churn. You’re prob wondering why I’m talking about post-click stuff here. You’ll see, keep reading.
Early metric numbers to review within a 7, 30-60 day window would be cost per click (CPC), cost per install (CPI), spend at the keyword level, and daily budget spend. I'd also be looking at the countries the app receives installs from. We'll discuss the remainder of the metrics down below.
Overall installs to the app, including organic installs. If the overall number is more than before the ads, the ads are likely also driving organic installs. Remember page domination on Google? It's a similar vibe here. If you have a way of seeing which keywords are resulting in installs and you're seeing more branded keywords, that could also be a clue especially if the stores are in higher tiers with potentially more decision makers.
Ad attribution calculation
Because of the way Shopify does ad attribution, it can be tricky to discern what's truly working and what's not in real time. The reason for this is because there is a lagging attribution in Shopify. If a merchant who installs the app from an ad uninstalls within 30 days, the install will not count towards the ad performance. Moreover, based on the app's onboarding flow (trial period, payout period, etc), there is also a lag in revenue and customer attribution. Because of this, the safety zone for diagnosing performance is at least 64 days in the rearview mirror. For reference, I am currently reading total profitability performance from ads from August 1-October 31, 2023 for my clients right now.
The metrics below come from an app that isn't in a highly competitive category but some of the keywords are competitive and therefore cost higher to get exposure. The lowest pricing tier for this app is $25/month, with the average customer spending around $80/month.
The below information comes directly from Shopify and can be read more thoroughly here:
How long of a delay can there be between the install and a customer converting?
The total maximum potential delay is up to 64 days and any free trial period. The timeframes are broken down as follows:
Post-click install attribution window: Up to 30 days delay
Merchant monthly billing cycle: Up to 29 days delay
Reconciliation period by Shopify: Up to 5 days
Source: Shopify
App categories
There was some chatter about popular app categories vs niche apps and how the niche apps might have a more challenging time. It depends on your expectations of performance. True, the volume of installs will be significantly lower for a niche app, but it does not mean that the numbers won't number in terms of ad campaign profitability.
This campaign is from a 'niche' app in the B2B category of apps. The installs were not daily. The daily budget was never maxed out. The lowest pricing tier for this app is $30/month, so having a CPI at $19 is acceptable. The revenue received from the ad campaign was profitable for the app despite it being a low-volume ad campaign.
Ad campaigns can fail
The worst time I ever had managing a Shopify app ad campaign was for a multiple-function app. It had so many features it was hard for Shopify to place the app. The cost per click was so high. The conversion rates were terrible. The profitability was nonexistent. We even tried to optimize around the top few features used the most in the app. That even failed.
I’ve also run ad campaigns for apps that have very high churn. The performance looks horrendous on those campaigns. Remember what I said earlier about if someone uninstalls before the 30 days after converting on the ad and how it won’t be counted in the performance? Yeah, it’s a mess. Whereas, Google or Facebook will count the conversion regardless of uninstalls. I honestly prefer Shopify’s way but it’s just something to keep in mind when diagnosing performance.
So, are Shopify ads for all apps? No, but they also can be wildly successful.
Shopify App Spotlight
The app spotlighted in this issue ties together the product variant options and the 3D subjects discussed earlier in the email. Since I went off earlier about the whole AR and VR thing, it would only be right to spotlight a Shopify app available for merchants to install in the app store.
Angle 3D Configurator ‑3D & AR
You will need a 3D model of your product, so there is that barrier to entry. Still, overall, they make it easy for merchants to customize products, sell more products in bundles, and offer an exciting shopping experience in augmented reality.
Check it out on this store to see how cool this is!
That does it for this week's newsletter. Yay, we did it!!
If you're still reading this to the end, you're a real one, and I thank you!
Bye,
Deb
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