Why Rakuten is investing in AI-powered media buying

It did so to provide the Japanese market with a more accurate platform.

One of the largest challenges advertisers in Japan currently face is in building strong prospecting segments and retargeting pools outside of their own websites.

This is often due to the difficulty faced in finding the right advertising option for their demographic, one option may work well for one company’s audience but may fall flat for another.

Rakuten has been trying to change that by investigating the possibility of realizing digital marketing that did not depend on personal attributes and the company began more specific planning in February 2019.

As part of that planning, it signed a joint venture agreement that was entered into with Sqreem Technologies on September 30. Sqreem is a Singapore-based AI company that provides a marketing solution not dependent on individual identifiable data but by utilizing an AI automated behavioural pattern analysis platform that analyses consumer behaviour data quickly.

Ryugen Shimizu, representative director and president Ryugen Shimizu, who is also the president of LinkShare Japan, which operates Rakuten Marketing Japan, will helm Rakuten-Sqreem.

It did so to provide the Japanese market with a more accurate platform by combining the proprietary behavioral pattern analytical data of Sqreem with Rakuten’s own consumer behavior data.

“Our aim is to maximize the performance provided to advertisers by developing and operating a digital marketing service that is independent of personal attributes and safe for users through the analysis of data collected by Rakuten and other open data available online,” a Rakuten spokesperson tells The Drum.

“By combining the over 100 million Rakuten members and their data with the behavioural pattern analysis data of Sqreem, we expect to improve ad performance and create new value for the Japanese market by bringing clarity to increasingly complex consumer behaviour.”

The phasing out of cookies by Chrome and other Internet browsers, and stricter privacy regulations will likely impact most of the industry.

However, Rakuten-Sqreem has never and will never use cookies, according to Ian Chapman-Banks, the chief executive and co-founder of Sqreem Technologies.

Instead, he says they use anonymized behavioral data that tracks and predicts how groups behave as its model affords more cost efficiency as Rakuten is able to reach the right consumer at the right time.

“The personal information collected from customers by Rakuten and Rakuten-Sqreem is managed responsibly by Rakuten according to the relevant laws and the privacy policy stipulated by Rakuten and will not be provided to any party outside the group without the customer’s consent,” explains the Rakuten spokesperson, adding that the personal information handled by Rakuten is also handled appropriately and is not shared outside the group without the customer’s consent.

“When we consign tasks involving confidential information to a subcontractor, we follow internal regulations established for outsourcing to examine the state of security at that subcontractor and audit it. We also have internal regulations for categorizing user information into different levels and regulations on the handling thereof. When information is provided outside the company, the information is encrypted according to the level and provided according to specified procedures.”

Ultimately, Chapman-Banks says Rakuten-Sqreem wants to simplify the media buying process for small and medium enterprises (SMEs) so they can use self-serving platforms and buy media by themselves.

Presently, advertisers have mainly had a hands-off approach to buying digital media and would leave the operations to an appointed agency who would handle everything from creative creation to buying media.

This was largely due to either advertisers having limited resources, in the case of SMEs for example, or due to the complexity involved in larger campaigns launched for global multi-national corporations.

“Even amongst major global companies, some are already starting to move small portions of their media to internal teams for cost efficiency,” explains Chapman-Banks.

“With this trend growing, Rakuten Sqreem aims to find a way to help these groups of advertisers while supporting the majority with our managed services.”

Join us, it's free.

Become a member to get access to:

  • Exclusive Content
  • Daily and specialised newsletters
  • Research and analysis

Join us, it’s free.

Want to read this article and others just like it? All you need to do is become a member of The Drum. Basic membership is quick, free and you will be able to receive daily news updates.