Rakuten Advertising is a subsidiary of the Japanese Rakuten Group, created in 1997, and is present in several sectors of activity: e-commerce (marketplace), banking, health (research against cancer), cryptocurrency, telephony (as an operator in Japan) .
Rakuten’s advertising division develops technologies to improve advertisers’ campaigns online and delivers a global offering. Thus, it is organized around 3 main business, affiliation, and programmatic activity: targeting and retargeting and, finally, advertising activity, to market the Rakuten Group’s asset inventories.
On the occasion of the latest edition of Inbound Marketing France, at the end of January, we met Edward Loeck, Senior Vice President of Rakuten Advertising for Southern Europe, who gave us an overview of affiliation and its trends, the key players in it and how Rakuten Advertising supports them in managing their campaigns.
Where is the affiliate market today?
When you look at the affiliate market from France, it is a marketing method that has always been unpopular. But when we look at it from the United States or other countries in the world, we realize that affiliation remains, for all advertisers, an important lever. At Rakuten, we believe this is an underdeveloped crane that is technology-centric.
All means of communication via the Internet today is a “technology”. Even if the term is not very beautiful, it means that we have added technology, automation and intelligence in all our online marketing tools. Such was the case for the show, with machine learning and programming, as for other levers, with more and more software making smart decisions. By doing so, we have improved performance.
However, this was not the case for affiliation, which remained a very manual lever, as relationships remain very human with advertisers on one side, affiliates on the other and the platform in the middle. There was no market hub that we’re working on.
What actions did you take to bring about this change?
All the logic of automation, machine learning and data usage that might be on display, we’re trying to integrate into belonging. How do you choose the right advertisers when you’re an affiliate? How to deliver the right message to the right user at the right time?
We launched a new feature of dynamic commissioning And it is the first step: the commission that the ally will receive will depend on the type of Internet user who is making a transaction. We’ll see if he’s an old or new customer and what kind of product he’s buying. The advertiser may set different rewards depending on the value or importance of the current purchase. If we analyze the value that each of these affiliates brings and we reward them accordingly, we can take a smart and scientific approach. This will allow us to break away from the clichés that we could have in this market.
Who are the actors interested in affiliation?
Basically, it’s a lever aimed at all kinds of players, whether it’s a very large group or VSE, at least in theory. In practice, we note that there is a distinct brand. It is possible to do this if you are a small business, because the model is economically viable. The size that these small businesses can expect will be less than that of the big advertisers.
What is your role with advertisers?
We managed to attract the interest of many international advertisers to be their escort in France, but also in other markets in which we are present. In the affiliate market, platforms are often content with offering tracking and providing an affiliate network for advertisers. But the service concept was previously absent to explain or guide advertisers, to help them build an affiliate strategy.
With our Rakuten affiliate platform, we have a different approach. We try to build an affiliate strategy with our advertisers to get the most out of all affiliates, whatever their type. We analyze the performance of affiliate marketers, if they bring in new customers or some of them have not come back for a long time, if they achieve increased sales, what is the margin level of customers brought by the affiliation … We try to provide great support and joint building of the affiliate marketing strategy for the advertiser. And as we go forward, we try to technically disrupt affiliate platforms by putting more and more automation and machine learning into them.
How do you respond to criticisms of affiliate automation?
Machine learning technology automates a number of processes to improve performance. But the automation mode does not mean withdrawing from the human being, people should continue to talk to each other and, on the contrary, should meet. Affiliation is a superhuman profession: it is the formation of a network of business stakeholders. There is a community interested in the advertisers and affiliates they work with. They have a real need for close human relationships, and feedback, to see what works.
What are the advantages of belonging to advertisers?
The advantage of affiliation over all other marketing tools (search, retargeting, prospecting, etc.) is that it is long-term and recurring. And the longer it lasts, the better your performance will be. Since you will be sharing margin or sales volume with your affiliates, by definition, you are starting on a sound economic footing. This is the only leverage on the Internet where there is a real partnership. Advertisers achieve financial balance through affiliation, which is what interests them very much.
Through affiliate platforms such as Rakuten Advertising, international companies, which have the ability to deliver in many geographies, can also build a network of business providers and start doing business without leaving their offices. We have the opportunity to build this network for them all over the world. This is a real interest because today there are very few players who are able to launch affiliate campaigns all over the world.
What are the disadvantages of membership?
Affiliation requires that we spend time on it, and therefore allocate resources to it in order for it to really succeed. Creating relationships with affiliates, meeting them, discussing them, making deals… takes a lot of time. Since the types of affiliate marketers are elaborate (email senders, coupons, influencers, etc.), care must be taken that the reward set for each is fair and matches the real value they bring. If everyone gets paid the same, it’s not fair. For example, a coupon site, which is at the end of the chain when an Internet user makes the transaction, has absolutely no value in what it creates for you as a brand as a fashion influencer, or content site or blog. We must pay attention to these different balances. It requires action and thought. Since affiliation is long-term, it is a permanent and recurring market, and it requires investment from companies.
What are the affiliation trends?
Brands need more and more advice and support, especially for big advertisers, who will mobilize a lot of resources from us to help them, or even manage their program for them. Others absorb the resources to grow their affiliate program themselves. They’ll ask us the technology to do that, and provide a network. From time to time they will also ask us for advice, for example before embarking on an international market, or sector reports to better understand the types of affiliates. This allows us to focus on this added value, which we can offer our advertisers from an advice point of view. It makes the work more interesting.