Privacy-centric advertising practices

 

3 Pillars Of Privacy-Centric Marketing: Steps You Need To Take Now

Darren Yuen, CEO of ad agency Initiative Malaysia

PETALING JAYA: Since the beginning of this year, Google has limited third-party cookies for its Chrome web browser users, marking a first step towards eventually abandoning the files that have raised privacy concerns for some time.

The testing period of the deprecation of third-party cookies will continue till the third quarter of this year, by which time it will be ramped up to restrict all users.

The changes are causing a seismic shift in the way digital marketers operate across the brands they work with.

Darren Yuen, CEO of ad agency Initiative Malaysia, shared his views with StarBiz on how limiting third-party cookies would affect the way agencies and marketers work moving forward.

StarBiz: What are cookies and how have they been used in digital advertising?

Yuen: Cookies are small files which are used to target advertising by tracking web navigation and have recently been subject to greater regulation globally.

These text files gather data about users’ browsing activity, identify computers that are connected to a computer network and specifically are used to identify and track specific users.

First-party cookies collect information activities on a particular site to improve the user experience. These are website-specific and once you click off the site, first-party cookies stop tracking you.

Third-party cookies on the other hand, work by embedding a persistent file on individual computers, working across the Internet to collect information about overall browsing habits.

Unlike first-party cookies, third-party cookies are generated externally by digital advertising agencies.

When users visit a site, the cookies track the site activity and save data about the browsing session, such as the sites visited and how much time is spent on certain pages, etc.

This data is sent back to the third party who created the cookie and is used to build out individual and group audience profiles.

Why should cookies be restricted?

Privacy concerns around the world have been the main push behind the cookie’s demise.

Previously, users had no control over when companies tracked them with cookies, but key regulations such as the General Data Protection Regulation that mandates that websites must ask for consent before using cookies on users in the European Union and the European Economic Area have set a precedent worldwide, improving the quality of data collected.

How will the loss of third-party cookies impact the advertising industry and its implications for advertisers?

Historically, most advertisers have relied on third-party data to inform ad campaigns. The loss of these will signify a loss of detailed targeting capabilities and decreased capabilities to measure ad performance accurately.

While the death of the cookie will dramatically change the digital marketing landscape for good, new technologies are arising to replace third-party cookies or improve first-party cookies.

As such, there will now be an increased reliance on first-party data, contextual targeting (a technique where ads are placed based on the content of a particular web page) and third party alternatives to the cookie like The Trade Desk UID or Universal ID – a holistic targeting and measurement system that’s more privacy-conscious.

At this point, are advertisers in Malaysia prepared?

Some brands have begun investing in tech infrastructure to start collecting their own first party cookies and other data sources.

Brands are also starting to invest in alternative solutions like contextual targeting or implementing ways to map customer relationship management data directly to platforms for improved measurement.

However, there is a high cost of entry to improve these ad tech capabilities and advertisers are generally wary of newer capabilities.

Advertisers also have concerns around these changes.

For instance, there are uncertainties and a lack of understanding around new alternative solutions such as the increased use of UIDs, which is a privacy-focused, unencrypted identifier created from a user’s email address or phone number.

There are also concerns around the potential decrease in measuring campaign effectiveness and how brands can maintain personalised digital experiences without detailed interest and behaviour targeting.

What are some key steps to get advertisers prepared?

The most important thing is for advertisers to re-examine their existing digital marketing strategy to see ways in which reliance on third-party cookies can be eliminated.

For instance, advertisers need to allocate resources to collect and manage first-party data effectively.

On an immediate basis, it will be useful to also start testing alternative targeting approaches across current campaigns by partnering with ad tech firms to create inventive solutions based on the UIDs.

Initiative Malaysia has also developed a unique assessment approach for the brands we work with, through an Emerging Tech Assessment.

This helps assess a brand’s digital activity’s readiness to these changes by categorising it into high, medium and low-risk buckets.

From here, we help plot a roadmap over the coming months to mitigate any potential risk areas and look at technologies available that could supersede existing performance.

How will advertisers be impacted if they do not prepare themselves for this development?

It is imperative that brands make swift preparation for these changes as there will be serious repercussions in the coming year, with wastage of advertising budgets on less effective campaigns or possibly delivering ads that are irrelevant.Brands will also face difficulties in reaching and engaging with their high value target audiences and in the long run, lose competitiveness in the digital space. This shift towards more privacy-centric advertising practices is here to stay and brands need to hasten efforts to gain an edge over their competition.

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Overcapacity’ an excuse to target ‘Made-in-China’

 

The overarching US strategy of exaggerating the issue of China’s overcapacity … is aimed at checking China’s industrial development by resorting to a beggar-thy-neighbour policy. — China Daily

RECENTLY, some US and EU officials have said China’s overcapacity distorts global pricing and production patterns. Concur-rently, the Joe Biden administration is considering imposing high tariffs on Chinese steel and aluminum, potentially opening a new front in the ongoing trade conflicts in order to contain Beijing’s “Made in China” drive.

Overcapacity is an economic term that signifies a situation in which there is too much production capacity relative to current demand levels, and hence it should not be overly “pan-securitised”.

Capacity utilisation rates are crucial indicators of whether capacity is adequately leveraged, with a very high rate generally indicating a shortage and a low rate suggesting excess capacity or an irrational capacity structure.

According to the latest data from Trading Economics, the United States has a capacity utilisation rate of 78.3% while China’s stands at 75.9%.

Developed countries including the United States and European nations consider any rate between 79% and 83% an indicator of supply and demand. China’s rate is not significantly lower than the healthy range.

Moreover, China has eliminated outdated steel production capacity to a large extent, having reduced about 300 million tonnes of steel and one billion tonnes of coal capacities, including entirely eliminating 140 million tonnes of substandard steel capacity, over the past decade.

Western pressure on China’s industries and trade has intensified in recent years, with many Western countries restricting the export of semiconductors to China and curbing the import of Chinese-made new energy vehicles, while taking “reshoring” or “near-shoring” measures, further exacerbating global overcapacity and straining the global economic governance system.

This is not the first time the West is using “overcapacity” as a pretext to suppress China’s manufacturing sector. In 2012, the European Commission initiated an anti-dumping investigation into Chinese photovoltaic products, initially planning to impose a 47.6% tariff on them. But in July 2013, China and the European Union “amicably” settled the photovoltaic trade dispute.

Unlike previous occasions, however, this round of scrutiny by the West is focused on China’s advanced manufacturing, particularly in clean energy sectors such as electric vehicles (EVs), photovoltaic panels and lithium batteries – areas in which there is intense Sino-US competition and China enjoys competitive advantages.

In recent years, spurred by the “New Washington Consensus”, the Joe Biden administration has increasingly used administrative and other non-market forces to ensure it has the upper hand in its competition with China in strategic future industries.

Government intervention

Also, the United States has been strengthening the industrial policy through government intervention, which, in essence, is strategic protectionism.

As many as 49 industries including automobile, aerospace, defence, electrical equipment, information and communications technology, and renewable energy in the United States get huge government subsidies.

Also, while strengthening itself, the United States has also increased efforts to weaken others. In recent years, under the guise of combating climate change and promoting low-carbon development, the United States has enacted the Inflation Reduction Act, which imposes discriminatory subsidy policies on products from World Trade Organisation (WTO) member states, specifically EVs from China.

These measures distort fair competition and will disrupt the global supply chains, as well as violate WTO rules of national treatment and most-favoured-nation status.

With the US presidential election still seven months away, the “overcapacity” issue is likely to be exploited by US politicians on the campaign trail, and the United States could intensify its rhetoric on China’s overcapacity, possibly imposing tariffs on Chinese exports including EVs, power batteries and photovoltaic panels.

It could also ramp up anti-subsidy and anti-dumping investigations, and impose green or labour standards barriers to limit Chinese exports. Alternatively, it may continue to forge alliances based on different issues to contain China.

The overarching US strategy of exaggerating the issue of China’s overcapacity is not aimed at striking a balance between global supply and demand; instead, it is aimed at checking China’s industrial development by resorting to a beggar-thy-neighbour policy.

The narrative of overcapacity is crafted by the United States to curb China’s industrial upgrading, safeguard certain Western countries’ vested interests in the global industry and supply chains, promote the reshoring of supply chains to the United States, bolster the US’ manufacturing competitiveness, contain China’s technological progress and prevent it from achieving breakthroughs in advanced manufacturing and strategic industries. — China Daily/ANN

Zhang Monan is deputy director of the Institute of American and European Studies at the China Centre for International Economic Exchanges. The views expressed are the writer’s own.

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Fund-of-Funds to fuel local firms

Fund RM1BIL set aside to invest in innovative highi-growth start-ups, says PM 

Fund of Funds (FOF) Explained: How It Works, Pro & Cons, Example

KUALA LUMPUR: A sum of RM1bil for the “National Fund-of-Funds” will be set up to invest in innovative high-growth Malaysian companies, says Datuk Seri Anwar Ibrahim.

“I am pleased to share that Khazanah Nasional Bhd will launch a ‘National Fund-of-Funds’ with an initial RM1bil allocation,” the Prime Minister said when delivering his keynote address at the launch of the inaugural KL20 Summit here yesterday.

He said the setting up of the fund represented the government’s continued commitment to assisting local companies such as those run by bumiputra entrepreneurs, as well as startups and small and medium enterprises (SMEs), in line with Budget 2024 allocations.

ALSO READ: Policy advisory panel to focus on growth and economy

He said the government acknowledged the growing importance of startups in driving technological advancements in the country.

As such, he said the KL20 Summit provided an ideal launchpad for innovative ideas.

“KL20 does not simply represent a single-event summit but marks a clear break from the past, which is a comprehensive effort to catalyse the technology ecosystem,” he said

He added that KL20 would fit strategically into the central governing economic philosophy of the Madani Economic Framework, which is underscored by the principle that economic growth and compatible distribution are in harmony with market forces.

ALSO READ: Elevating the country to be a leading startup destination

“The government is also aiming to centralise investment agencies such as Malaysia Venture Capital Management Bhd (Mavcap) and Penjana Kapital under Khazanah Nasional,” he said.

Anwar also announced the signing of agreements involving 25 entities from various sectors of the startup ecosystem to help create cutting-edge technology ventures in Malaysia.

Among them was the Asean Investment Initiative between Khazanah Nasional, Kumpulan Wang Persaraan (KWAP) and Blue Chip Venture Capital that will invest RM3bil in the South-East Asian and Malaysian ecosystems.

ALSO READ: KL20 Summit 2024 to attract high-quality investments - PM

He also said that 12 international venture capital firms would be setting up offices in Kuala Lumpur, which will help Malaysian startups be discovered and nurtured to be globally successful.

On semiconductors, he said the nation’s substantial hold on the backend had made it conducive to pursue high-value front-end work, primarily in the integrated circuit (IC) design category.

“I am pleased to announce the largest IC Design Park in South-East Asia, which will house world-class anchor tenants and collaborate with global companies such as Arm.

“This is done with the backing of the Selangor Information Technology and Digital Economy Corporation (Sidec), with the Selangor state government, and this is proof that momentum is already being built on the ground,” he said.

ALSO READ: Making the Malaysian startup pitch

He added that the country was positioning itself as one of the leaders in semiconductors, clean energy, agritech and Islamic fintech.

To make Malaysia a true gateway to major economies, Anwar said a city-to-city connection between Kuala Lumpur and Hangzhou would be established so that capital, talent and market access would no longer be a barrier.

Earlier in his speech, Economy Minister Rafizi Ramli said the goal of the KL20 Action Plan was to bring the top 20 startups in the world into the country.

This, he said, would be done through the immediate introduction of several measures.

He said the move was aimed at accelerating the critical areas of a startup ecosystem here.

“The ambition is for Malaysia to be the choice destination for early-stage and growth capital and to be the centre for world-class entrepreneurs and skilled talent,” said Rafizi.

He added that it was also the goal for the nation to be the home for leading startups in the world.

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Related stories:

Policy advisory panel to focus on growth and economy

Elevating the country to be a leading startup destination

Enhancing the venture capital ecosystem

Making the Malaysian startup pitch

KL20 Summit 2024 to attract high-quality investments - PM

RM1bil for 'Fund-of-Funds' to invest in high-growth firms

Timely focus on startups