How companies will switch marketing tactics in the future

According to a report from the New York Times, X.com could lose up to $75 million dollars in revenue as companies pause advertising on the platform. This pullback compounds with a similar trend from last year when companies were pulling back on digital ads due to fears of a recession.

This may be even more worrisome for X as Amplitude (AMPL) CEO Spenser Skates joins Yahoo Finance to discuss this trend and how the landscape of companies advertising to their consumers will change from using "third-party" platforms — like Meta's Facebook (META) or X — and instead directly advertise to existing customer bases.

"There are tons of ways that companies can now reach their end customers. We've seen that, Klaviyo (KVYO) is a great example of that, where they're focused on if you had already someone who signed up for your site and they haven't maybe checked out, how can you send them a message or a special offer to get them over that last hurdle?" Skates explains.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

- Spencer, I got to ask you, given what you guys do about the story we were just talking about. I'm calling a little bit of audible here because I know you're here to talk to us about public offerings. But we were just talking about X and a lot of brands pulling there-- or at least pausing their campaigns on X. What you do is help brands figure out, for example, if their brand campaigns, if their advertising, is effective.

Now you're the CEO of a public company. So I don't know if you can tell us this about your clients. But what are you seeing in terms of engagement on something like an X these days?

SPENSER SKATES: I think what we're seeing is a switch from what I think of as third party and advertising data. So for example, using X or even Meta or Google as a platform and instead thinking about ways to engage the customer base you already have with first party data. So what are ways that you can show them new offerings, customize the experience better for them, or just make changes to the product to enhance the value that you already have?

Because it's much, much easier to engage with a set of customers you already have. It's about 10 times easier than to try to go acquire a new customer. And so I think we're going to continue to see a decline in general brand advertising. And instead, advertising that's more focused on targeted demographics, targeted users, people that really resonate with a particular message.

- And so Spencer, if I may then follow up, how does that communication occur? Does it happen through the direct channels that the brand has with its customers, email, text, what have you, is that how it's going on?

SPENSER SKATES: That's exactly right. So there's a lot of different ways between phones, between websites, between emails, between new platforms like VR and AR. There's tons of ways that companies can now reach their end customers. And we've seen that. Klaviyo is a great example of that where they're focused on, if you had already someone who signed up for your site and they haven't maybe checked out, how can you send them a message or a special offer to get them over that last hurdle?

And so I think we'll see a lot more of that generally versus generalized brand advertising like you see on X.

- It looks like you still have items in your cart, I've definitely gotten some of those emails.

SPENSER SKATES: Exactly.

- Thanks a lot. Spencer Skates, appreciate it.