Displaying items by tag: Advertising

(Washington)

Sneaking in right after Christmas and just before a change of administration, the SEC has announced an important rule change that affects all advisors. In particular, the SEC has updated a rule that has not been touched in decades and was increasingly out of touch with reality. The change has to do with marketing communications, particularly those through internet channels. According to Barron’s, “The new regulation also allows financial advisors to use testimonials, endorsements, and third-party ratings to woo potential clients, as long as they meet certain conditions”. SEC chief Jay Clayton commented that “The marketing rule reflects important updates to the traditional advertising and solicitation regimes, which have not been amended for decades, despite our evolving financial markets and technology. This comprehensive framework for regulating advisers’ marketing communications recognizes the increasing use of electronic media and mobile communications and will serve to improve the quality of information available to investors”.

FINSUM: Advisors have had to tread very lightly in digital communications/advertising for years because of a high degree of uncertainty about what was permissible. This goes a long way towards making that very clear.

(San Francisco)

The market seems to be ignoring it, but Facebook is facing a major challenge to its business model. One so big in fact, that it is an esoteric threat to its whole way of making money (not to mention the rest of social media). That challenge is the collective ditching of third party cookies, which are little tools used to track users across sites. Third party cookies are used to assemble profiles of user behavior that then allow Facebook to deliver targeted ads. Since third party cookies are now being phased out by major browsers, Facebook (and other social media companies) are going to have a much tougher time assembling behavioral profiles, and this could ultimately have a cataclysmic effect on revenue and profitability. According to a research analyst, and explained by Barron’s, the big worry is that the decline of cookies—which is being called the “cookiepocalypse—will “will lead to ‘signal loss’ for advertisers, leading to reduced returns on advertising, and then an ‘implosion’ in ad spend by direct-to-consumer advertisers”.

FINSUM: As a publication, we understand this better than most. If Facebook ads are no longer as targeted, then their click-through rates will be worse. When that happens, advertisers will get worse overall results. This will mean they spend less dollars and pricing power will plummet. Facebook is definitely working on a work around, but until there is a concrete solution, this is a big threat.

(San Francisco)

Remember all those privacy policy email updates you got over the last few weeks? Well in case you were not paying attention, they arrived because of a landmark change in the way the EU is governing data, and even US companies needed to comply if they had any European customers. Well, under the new rules, Google is already seen as the big winner, which we thought investors might like to know. Google has been able to get data use consent from users much more successfully than others, and in turn, it has been routing many of its ad customers to its own ad exchanges instead of those of vendors.

FINSUM: As was always going to be the case, it looks like the big tech powers will be able to use the new data regulations to their advantage. Theoretically this could be a boost to Google’s cash cow Adsense business.