[Special Interview] What is the ultimate digital marketing that Mr. Arima, who has been involved in Internet advertising for 20 years, aims for? Part 2

We are pleased to present the second part of our interview with Makoto Arima, President of Rakuten Data Marketing, Vice President, Executive Officer, and CRO of Rakuten.

Here, we reviewed the structure of the Rakuten Marketing Platform (RMP), a marketing solution promoted by the Rakuten Group, and talked about the ultimate

digital marketing

we are aiming for in collaboration with Dentsu, and the future of

Internet advertising

.

In May 2018, Rakuten unified the branding of its advertising products into the “Rakuten Marketing Platform.”

“Rakuten Marketing Platform (RMP)” is a full-funnel marketing solution that utilizes the “Rakuten Ecosystem (economic zone),” which is developed using over 100 million Rakuten IDs and consumer behavior analysis data such as purchasing data based on them.

A variety of products are available to provide a one-stop solution to all marketing processes.

Mr. Arima has the following to say about RMP, which was realized by combining Rakuten’s big data and Dentsu’s mass media strategy construction capabilities.

“Of the marketing funnel of awareness/interest/purchase/repeat/fan formation, Dentsu is good at before “purchasing,” while Rakuten is good at after “purchasing.” I think this combination is very interesting. Of the people who became aware of your product through TV or the Internet, how many of them purchased it and became repeat customers? I believe it is digital marketing.”

The ultimate digital marketing. To what extent has this vision been achieved at this stage?

“I’d like to say this with some self-reflection, but I think that Internet advertising in Japan is still at this level even though it’s been around for 20 years.AI has been introduced to analyze big data, and in the past few years, from data analysis to action Although the time and cost to create a TV has been dramatically shortened, there is still a huge disconnect between TV and the Internet in Japan. In America, a system has already been implemented in which a product banner appears on a user’s smartphone 10 seconds after watching a TV commercial online. This is the ideal format. Rather than thinking about TV versus the Internet, it is more important to think about how the two can work together, and I think that is exactly what we should be working on.”

Internet advertising includes “ad fraud” where robots view and click ads, “viewability” where ads are not actually seen by users, and “branding” where ads are displayed on undesirable sites. There are issues such as “safety.”

In order to solve these problems, it seems that there are advantages to using purchasing data as a standard. Mr. Arima analyzes it as follows.

“Up until now, Internet advertising has never been liked by users. This is because information that is not optimized for the user is displayed in a random and unscrupulous manner. For example, advertisements that persistently contact the browsers of people with poor eyesight. It’s only natural that people would hate it if they saw an ad for Lenses.In that respect, advertising based on purchase data has benefits for advertisers, publishers (sites that place ads), and users. This is what we call “Sampo-yoshi” Internet advertising.

First of all, for advertisers, reaching users who can expect to make a purchase increases the probability of increasing effectiveness. And for publishers who run ads, by running ads that lead to purchases, advertising costs tend to fall, which in turn makes it easier to pay for interview expenses. Our research has shown that users spend more time on sites with well-written articles, and that ads placed on sites with longer stays are more effective. Users will now see useful information instead of random irrelevant information. By optimizing information based on purchase data, the chances of seeing unnecessary advertisements are greatly reduced. By bringing benefits to each of the three parties, a virtuous cycle is created.”

Mr. Arima also prefaces this by saying that everything is based on the user’s permission.

“Survey results show that the time spent on Rakuten Market is three times longer than on competitors’ sites. Rather than coming to Rakuten Market to buy products, people are window-shopping to see what’s available. This is because many users come to the site with the intention of enjoying the site.The more products a user views, the more clearly the person’s hobbies and interests become.For example, there are people who view a lot of products related to hometown tax donations. If Rakuten Group’s efforts toward mobile and logistics services become more serious in the future, it will be possible to achieve more precise targeting, such as by displaying different Hometown Donation advertisements that match their needs. I believe that information will also lead to the realization of detailed services.”

When I asked about the future of Internet advertising, I heard the following, using examples of initiatives that only Rakuten, which has over 100 million IDs, can do.

“In terms of improving services for individual users, the possibilities for Internet advertising are almost limitless. For example, if a contact lens manufacturer wants to convey the appeal of its contact lenses to more than 1,000 people, On the other hand, there are many people who buy contact lenses on Rakuten Market.What should you do at that time?Rakuten allows you to analyze data such as their attributes using 920 items. From over 100 million IDs, AI searches for people in a similar demographic to the advertiser.The scale is decided based on the advertiser’s budget, and targets are targeted such as those who match 90% of the 920 items, and those who match 75%. This kind of approach is possible because we have over 100 million IDs.”

Rakuten’s advertising revenue in 2018 was 93 billion yen, with much of the advertising revenue coming from the approximately 47,000 stores on Rakuten Market.

Mr. Arima said enthusiastically that he would like to “double that amount to 200 billion yen” in 2021, three years from now.

Its advertising handling volume of 200 billion yen is comparable to that of some media outlets, including the largest television stations.

However, this number is not impossible if you take advantage of Rakuten’s ability to link online/offline/retail with Rakuten ID.

Lastly, I asked him to give a message to marketers.

“Even within the same company, there are still many cases in which the top and bottom of the marketing funnel are in charge of different departments and have different budgets, so I think we need to reevaluate things with the times.For us, we need to review things like TV, newspapers and magazines, SNS search, e-commerce sites, etc. The big challenge is how to integrate them and incorporate them into an operational PDCA cycle.We will continue to provide solutions and products that actively utilize purchasing data, so please look forward to it.”

Mr. Arima’s efforts to pursue the ultimate in digital marketing will continue.

Mr. Makoto Arima

Rakuten, Inc. Executive Vice President, CRO Media & Sports Company President, Rakuten Data Marketing, Inc. Representative Director, Rakuten Adroll, Inc. Representative Director, Chairman

He joined Yahoo as its first employee in 1996, at the dawn of the Internet, and later served as CEO of Google, supporting the development of Internet advertising in Japan. In July 2017, he became Rakuten’s executive vice president and CRO (chief revenue officer). At the same time, he became president and representative director of Rakuten Data Marketing, a joint venture between Rakuten and Dentsu, which began operations in October of the same year.