Facebook Google advertising is facing privacy regulatory pressure, giving rise to cross-border e-commerce independent site permission marketing

21st Century Business Herald reporter Huang Wanyi, intern Xia Shiyi reported in Guangzhou

In order to comply with the more stringent privacy supervision situation, overseas Internet giants are accelerating the adjustment of their own advertising business policies, which in turn stirs the marketing nerves of the majority of overseas brands.

For example, starting January 19, 2022, Facebook restricts some advertiser targeting features, removing targeting options for some major categories, including user health information. Another internet advertising giant, Google, will also abandon the use of Chrome browser cookies in 2023, citing higher demands from users on privacy and data control rights.

"At present, most of the overseas enterprises with independent websites have successful business operations and marketing, and the main problem they face is the transformation of user access methods, and the way to do user access through cookies in the past will be more and more restricted and inefficient." At the "Post-Cookie Era Overseas Marketing" media communication meeting held recently, Darryl Su, vice president of data connection platform LiveRamp China, said.

The so-called independent website usually refers to the independent website of cross-border e-commerce sellers to promote and sell products, which is different from third-party comprehensive e-commerce platforms. The "14th Five-Year Plan" e-commerce development plan points out that it supports the global layout of e-commerce cross-border transaction service platform enterprises and cultivates a number of cross-border e-commerce independent stations. Cross-border e-commerce is one of the important industries for Chinese enterprises to go overseas, and there is a strong demand for overseas marketing, among which independent stations are extremely sensitive to the above-mentioned policy changes of overseas Internet advertising platforms.

Independent station marketing channels expose the drawbacks in a single way

At the media communication meeting, Yin Qianqing, CEO of cross-border e-commerce SaaS service provider Stream, told reporters that in the past few years, China's independent stations have developed in a spurt, and China has the ability to provide personalized and large supply in addition to having a very mature manufacturing supply chain. In addition to lowering the technical threshold to solve infrastructure problems, Facebook-based precision advertising platforms can also help these independent sites solve key customer acquisition problems.

However, single marketing channels that rely too much on advertising giants are also gradually exposing their drawbacks. According to a previous survey of 100 cross-border e-commerce sellers by the 21st Century Business Herald reporter, 63% and 34% of the sellers chose to use Facebook and Google when advertising, of which up to 59% of the sellers said that they had encountered Facebook bans.

Recent changes to the two major platforms, Facebook and Google, also show that the uncertainty of relying solely on these two platforms to run ads is increasing. For example, Facebook's third quarter 2021 financial report shows that Facebook's advertising unit price increased by 22% year-on-year, compared with a 47% increase in the second quarter.

Behind the increase in advertising rates, there is a controversy over the alleged monopoly of advertising agreements by Internet giants. More details were revealed in an antitrust lawsuit led by Texas Attorney General Ken Paxton in 2020, with Facebook and Google's CEOs signing a special deal that gave Facebook an edge in Google's bid for search ads.

In recent years, with the risk exposure of excessive dependence on third-party e-commerce platforms, the outlet for encouraging self-built independent stations has arrived, but compared with the advantages of user traffic brought by third-party platforms, independent stations need to spend more energy and financial resources to put their own advertisements for drainage.

According to the "2021-2022 China Cross-border Export E-commerce Industry and Independent Station Model Development Status and Trend Research Report" released by Ai Media Consulting, the number of independent stations established by Chinese enterprises overseas has reached 200,000, and from the perspective of cross-border e-commerce B2C market structure, the share of independent stations has increased from 9.8% in 2016 to 20.3% in 2020. When analyzing the operational differences between the marketing methods of independent stations and third-party e-commerce platforms, the report pointed out that the marketing methods of independent stations are search engine marketing, social media marketing, email marketing, etc., through the above channels to guide consumers to independent stations to complete orders, and follow-up needs to pay attention to maintaining the brand image and continuously maintaining the private domain traffic attracted by the brand.

"At present, excessive dependence on Facebook is the biggest bottleneck in the e-commerce marketing of overseas enterprises." Yin Qianqing pointed out that Facebook's advertising engagement in the fourth quarter of 2021 has dropped significantly, and the problem has been exposed very obviously. Now some customers do not rely entirely on Facebook, but choose to find alternative solutions, for example, in the live broadcast of TikTok, some customers will directly talk to some overseas media to talk about cooperation.

Stricter privacy regulations have led to permissioned marketing

In addition to the risks brought about by excessive dependence on a single marketing channel, cross-border e-commerce independent stations are also facing the marketing pressure of Internet advertising giants to tighten their privacy policies, so people in the advertising industry suggest that overseas companies pay attention to the data marketing model of one party that obtains user permission.

In early January, French data regulator CNIL released a document saying Google and Facebook were fined 150 million euros and 60 million euros, respectively, on the grounds that the two platforms could not allow French users to easily reject cookies, in violation of EU privacy regulations.

In the face of increasingly stringent privacy regulations, the two Internet giants are accelerating the adjustment of their advertising business policies. For example, starting January 19, 2022, Facebook restricts some advertiser targeting features, removing targeting options for some major categories, including user health information. Google will also abandon the use of Chrome browser cookies in 2023 on the grounds that users are placing higher demands on privacy and data control rights.

"In the past, when Internet supervision was not strict, independent stations could only use third-party user data, but in the context of the current tightening of supervision, non-permissioned user tracking was prohibited, and the advertising of overseas enterprises became inaccurate." Yin Qianxiang said that the marketing of overseas enterprises has undergone great changes, advertising has returned to the state of publicity, and independent stations must be precisely marketed by the data of the licensed party.

Su Shijie believes that permissioned marketing around user privacy protection will be the main axis of the future, especially the main axis of overseas precision marketing. "Privacy laws and regulations are not against precision marketing per se, it prohibits unauthorized precision marketing and discriminatory precision marketing. For example, today the same product service, because of a variety of different algorithms, to a variety of different groups of people different prices or service content and so on. In such a case, the core scenario needs to be based on explicit user authorization, that is, permissioned marketing. This puts forward high requirements for the accumulation of data assets of one party of the overseas brands and the ability to use the data of the other party. ”