Rakuten Advertising is a subsidiary of the Japanese group Rakuten, founded in 1997, present in many sectors of activity: e-commerce (marketplace), banking, health (research against cancer), cryptocurrency and telephony (operating in Japan).
This Rakuten advertising division develops technologies to optimize advertisers’ online campaigns and offers a global offering. It is therefore structured around 3 main businesses, affiliation, a programmatic activity: targeting and retargeting, and finally a promotional activity for the commercialization of the Rakuten Group’s assets stocks.
Celebrating the last edition of Inbound Marketing France at the end of January, we met Édouard Lauwick, Rakuten Advertising’s Senior Vice President for Southern Europe, who gave us an overview of the affiliation and its trends, its key players and how Rakuten Advertising helps them manage their campaigns.
Where is the affiliate market today?
If you look at the affiliate market from France, it’s a marketing lever that has always been unpopular. But if we look at it from the United States or other countries around the world, we find that affiliation remains an important lever for all advertisers. At Rakuten, we believe this is a lever that has not yet evolved, its technological fulcrum.
All levers of online communication are now “technoized”. Even if the term is not very pretty, it means that we have added technology, automation and intelligence to every lever of online marketing. This was the case with display, machine learning and the other levers, with more and more software making intelligent decisions. And we’ve improved performance along the way.
However, this was not the case for the affiliation, which has remained an extremely manual lever, where relationships remain very human with advertisers on one side, affiliates on the other and the platform in the middle. There wasn’t that linchpin of the market we work on.
What actions did you take to bring about this change?
All the logic of automation, machine learning, using data that we might have exhibited, we’re trying to put them into one affiliation. As an affiliate, how do I choose the right advertisers? How do you deliver the right message to the right user at the right time?
We’ve introduced a new feature of dynamic commissioning This is a first step: the commission that the affiliate receives depends on the type of Internet user making a transaction. We will see if it is an old or a new customer and what type of product they buy. The advertiser can determine different remuneration depending on the value or importance of the current purchase. By analyzing the value each of these partners brings and rewarding them accordingly, we can take an intelligent and scientific approach. This allows us to get out of the cliché that we can have in this market.
Who are the stakeholders affected by belonging?
Basically it’s a lever that caters to all types of players, whether it’s a very large group or a VSE, at least in theory. In practice, we notice that there is a brand markup. This is possible if you are a small business as the model is economically viable. The volume these small businesses can expect will only be less than for the largest advertisers.
What is your role with advertisers?
We manage to attract many international advertisers to be accompanied in France but also in the other markets where we are present. In the affiliate market, platforms have very often been content with offering tracking and providing an affiliate network for advertisers. But the service concept was previously lacking to explain or guide advertisers to help them build an affiliate strategy.
We take a different approach through our affiliate platform Rakuten. We try to develop an affiliate strategy with our advertisers to get the best out of all affiliates, regardless of their type. We analyze the performance of the affiliates, whether they bring new customers or some who haven’t returned for a long time, whether they generate additional sales, what is the margin of customers won through the affiliates… We try to provide authoritative support and helping to shape the affiliate strategy for the advertiser. And over time, we’re trying to technologically revolutionize affiliate platforms by building more and more automation and machine learning into them.
How do you respond to criticism of affiliate automation?
Machine learning technology automates a number of processes to improve performance. However, introducing automation does not mean withdrawing from people, people must continue to talk to each other and, on the contrary, meet. Affiliation is a superhuman job: it’s building a network of business contributors. There is a community of interest with advertisers and the partners they work with. They have a real need for close human connections, feedback to know what is working.
What are the benefits of membership for advertisers?
The advantage of affiliation over all other marketing levers (search, retargeting, prospecting, etc.) is that it is sustainable and recurring. The longer it takes, the more you will improve your performance. Since you share the margin or sales with your affiliates, you start on a solid economic basis by definition. This is the only lever on the internet where there is a real partnership. Advertisers achieve financial compensation through membership, which is very interesting for them.
With affiliate platforms like Rakuten Advertising, international companies that can deliver in many geographic areas can also build a network of business intermediaries and start doing business without leaving their office. We have the opportunity to build this network for them all over the world. This is a real interest as today there are few players capable of launching affiliate campaigns all over the world.
What are the disadvantages of membership?
Belonging requires that we dedicate time and resources to make it really work. Building relationships with affiliates, meeting them, discussing with them, doing business… It takes a lot of time. Since the types of affiliates are varied (emailers, couponing, influencers, etc.), care must be taken to ensure that the compensation established in each case is fair and reflects the actual value it brings. If everyone is paid the same, it’s not fair. For example, the couponing site that is at the very end of the chain when the internet user is going to make the transaction does not have the same value in what it creates for you as a brand as a fashion influencer, content site or to blog. We have to pay attention to these different balances. It takes work, thought. Because the affiliation is long-term, it is a multi-year and recurring market that requires investment from companies.
What are the affiliate trends?
Brands always need more advice and support, especially for the biggest advertisers who will mobilize many resources from us to help them or even manage their program for them. Others internalize resources to grow their affiliate program themselves. You will ask us for the appropriate technology and provision of a network. From time to time they also ask us for advice, for example before venturing into an international market, or for industry reports to better understand the types of affiliates. This allows us to focus on that added value that we can bring to our advertisers from a consulting perspective. That makes the job more interesting.