- As companies jump into retail media, Avoid goes the other way and shuts down its advertising business.
- The ads generated most of the company’s revenue, but CEO David Yeom said they degrade the customer experience.
- Ads now generate 20% of revenue and the company says it has never been more profitable.
At a time when businesses of all stripes are getting into the advertising business, the Evite online party planner is going in the opposite direction.
CEO David Yeom said he was shutting down Evite’s advertising business because the ads were hurting the customer experience, leading to user opt-outs. Evite’s e-card business had also plummeted during the pandemic because people stopped hosting events and the company didn’t want to annoy its remaining customers. And it was difficult to become a major player in a space dominated by tech giants.
“Our users don’t like ads,” Yeom said. “When you’re thinking about creating a great event invitation, the last thing you want is for your guests to see William Sonoma or P&G ads. If you piss off your users, they’ll find a different alternative.”
Evite now derives 20% of its business from ads, up from 80% two years ago, and plans to exit the business entirely by the end of the year.
Evite was entirely ad-based when it was founded in 1998. Yeom, a former marketer at The Honest Company who co-founded online dollar store Hollar, bought Evite in 2020 from SiriusXM owner Liberty Media, with a group of private investors that included
co-founder Kevin Lin and Triller CEO Mike Lu. Along with the ad business, a 50-person ad sales team was eliminated.
“When you’re dealing with people, it’s always a tough thing,” he said of the decision. “Then came getting everyone to buy into this new vision.”
Evite now makes most of its money from the sale of new card designs and the commissions it receives from recommending party vendors and gift suggestions to users. He invested in his card designs, with animations and artist collaborations.
The company said its revenue has grown 73% since 2019 and is on track for record growth in 2022. Unconstrained by its advertisers, who were focused on the United States, Evite plans to soon to expand globally.
Evite’s move comes as many companies are getting into the advertising business to shore up their profit margins and use their data to help advertisers target consumers amid privacy changes by Apple and Google.
Yeom said ads can be useful when they’re helpful and relevant to consumers, but shouldn’t come at the expense of user experience.
“Keep your customers and users in mind,” he said.