Daily Archives: October 5, 2021

The power of the European Central Bank

With inadequate fiscal policy, monetary policy labors to compensate, creating damaging economic distortions in the eurozone market.
By Bercan Begley – The pandemic has left millions of Europeans out of work and many underemployed, their businesses partly closed. Yet some are flourishing as never before. For European bourses, it has been marvelous. As the price of stocks has climbed, so has the wealth of those who own them.

Never have we seen such a disconnect between the real economy, the home of democracy, and the financial markets, the domicile for capitalists. And one institution has been at the centre of it all—the European Central Bank.

The ECB is perhaps the most powerful yet least understood institution in the eurozone. It has the power to engender economic, social and political change. Following the global financial crisis, the bank embarked on an epic experiment in monetary economics.

Two levers

There are two macroeconomic levers: fiscal and monetary policies. Before the introduction of the euro, both largely belonged to European Union member states. With monetary union, monetary policy moved to Frankfurt, centralized in the headquarters of the new ECB. Fiscal policy, such as tax-rate formulation, belonged to member states, but under the Maastricht treaty’s Stability and Growth Pact the European Commission supervised.

The lead-up to the crash saw profound capital misallocation in the eurozone. Pre-euro, ‘currency risk’ tempered financial venture-taking. A Munich-based bank would undertake due deliberation before converting Deutschmarks into Irish punts, due to the variability of exchange rates. Currency volatility played a risk-mitigating role, moderating investment allocation. Foolhardy owners of financial assets bore their losses and had no compensating recourse to the political domain. more>

Updates from Chicago Booth

Without cookies, online advertisers have to piece together crumbs
By Brian Wallheimer – Google announced this year that it would eliminate automatic third-party cookies on its Chrome browser. The company joins Apple and Mozilla, which earlier made users opt in to the technology on their browsers. While Google’s move may be positive for users who want privacy, it’s bad for companies that want to target ads to specific audiences.

Boston University’s Tesary Lin and Chicago Booth’s Sanjog Misra evaluated the alternatives for advertisers. Building an analytical framework and conducting an empirical experiment, they find that advertisers have few good options for constructing accurate user profiles.

“The system was already broken and imperfect,” Misra says. “Any time there is fragmentation, anything you want to measure is going to be off to some degree. Now the rules have changed, and it will exacerbate that fragmentation to a much greater degree.”

Cookies are tags from websites that live on a person’s computer or internet-capable device. When you search for shoes online, the search page and the sites you visit leave cookies that can be collected to tell a company such as Zappos that you’d be a good target for an ad.

Because people use more than one device, a third-party company can collect cookie data to see a person’s browsing history. These companies use a data-linking strategy to cross-reference cookies to see where names, email addresses, and other identifying features overlap and then stitch together a more complete user profile. Advertisers can track if an ad is effective, even if that ad is viewed on a smartphone by someone who bought the shoes on a laptop a day later. more>

Related>

Dangerous Environmental Changes Are Here. Do We Act or Remain Afraid?

IPCC 6th Assessment confirms the environmental peril in all too specific details. But what we do with that information is up to us.
By John Blyler – The Intergovernmental Panel on Climate Change (IPCC) has released the first portion of its Sixth Assessment Report on how climate change is altering the planet’s natural systems and environmental states. These changes are leading to worsening extreme weather events around the world.

The IPCC’s periodic reports are drafted by a consortium of the world’s top climate scientists and experts. The purpose of their work is to establish a technical foundation for policymakers to address climate change on multiple fronts, such as mitigation, adaptation, and assessing future risks.

The Intergovernmental Panel on Climate Change (IPCC) has released the first portion of its Sixth Assessment Report on how climate change is altering the planet’s natural systems and environmental states. These changes are leading to worsening extreme weather events around the world.

The IPCC’s periodic reports are drafted by a consortium of the world’s top climate scientists and experts. The purpose of their work is to establish a technical foundation for policymakers to address climate change on multiple fronts, such as mitigation, adaptation, and assessing future risks.

This gallery highlights only some of the takeaways and how technology can help. These summaries present a grim finding but not one without hope. more>

Updates from McKinsey

When agile marketing breaks the agency model
The journey to agile marketing can be hard. But for many marketers and agencies, it offers the opportunity to forge a better partnership.
By Clay Cowan, Jennifer Ellinas, and Rachael Schaffner –
Key takeaways

  • Agile marketing teams can deliver real business value for an organization.
  • But agile transformations can be challenging and place outsized strain on a marketing group’s agency relationships.
  • The most successful agile marketing teams are doubling down on sound agency management practices, including approaches to scopes of work, fee arrangements, improved operating model, talent and culture, and metrics./li>

Marketing leaders are increasingly turning to agile methodologies to help improve the speed and performance of their teams along with the many partners they use for creative, production, and measurement expertise. In our experience, though, the shift to agile is often far from seamless for these constellations of teams. Our recent survey of marketing executives found that only 3 percent characterized their transition to agile marketing with their partners as “smooth,” while more than 80 percent reported the journey to be filled with obstacles.

Managing multiple external partners can already be complicated in a traditional marketing department, and it’s an understandably significant shift to borrow operating methodologies from the IT world. Compounding that challenge is the fact that marketing requires engaging with so many more types of third parties, which include measurement, platform, and publishing partners. Google, Twitter, Facebook, and LinkedIn were mentioned by 40 percent of the executives as being among the additional partners they coordinate with today.

It’s no wonder, then, that when switching to agile methods, marketers often struggle with how best to involve their external partners and other third parties in their transformation. The result can leave some professionals feeling that agile marketing broke their agency model. more>