Over the past few decades, the development of the internet has resulted in a dramatic increase in remote shopping. Online marketplaces have made it possible for companies anywhere in the world to sell their products or services to a much larger audience, removing geographical limitations. It’s now possible for both large corporations and no-name brands to increase their sales and expand their market.
MDM Inc. entered the online shopping marketplace space in 1997 and would have been considered one of the little guys in terms of business size. The Japanese electronic marketplace company, now called Rakuten Inc., is headquartered in Tokyo and is now a publicly traded company with about 10,000 employees worldwide and dozens of subsidiaries.
Today, the Rakuten Affiliate Marketplace, just one of Rakuten’s “sub-businesses,” offers more than 18 million products and serves more than 20 million customers worldwide. We spoke with Chad Jaquays, SVP of Global Publisher Group at Rakuten Marketing, to learn more about affiliate marketing.
Matching Big Brands With Startups
What makes Rakuten so powerful is their ability to connect the little guys (referred to as publishers) with the big guys (referred to as advertisers). “There is no other place where a startup company can basically build a website or an app and create relationships with some of the top brands on the planet,” Jaquays said.
Before online marketplaces, the alternative would’ve been to go out and try to make these relationships and deal with creating and negotiating individual contracts, which would cost lots of time and money. All required fees are paid by advertisers and not the affiliate publishers.
Startup companies looking to market a product to a broad audience can do so through the Rakuten marketplace. Although it’s not realistic for someone to start a blog and immediately earn big partnerships from within Rakuten’s network, anyone can become a publisher once they’ve been reviewed by the compliance team.
The compliance team reviews every publisher to ensure they are only working with high-quality websites or apps. Some industries will have a higher barrier of entry, such as those dealing with financial products. There is a lot of money to be made in affiliate marketing and some of the largest brands today started in this space.
Scaling to Achieve the ‘Snowball Effect’
Publishers that work with Rakuten are encouraged to market their products in a personable, individual style that speaks directly to their customer base. It’s very important to know who your audience is and match those audiences with the right brands.
Jaquays emphasized the importance of diversifying your marketing strategy because you can’t put all your eggs in one basket. Relying on just one method or source for traffic will put you at the mercy of those systems, which will ultimately cause your business to fail.
Jaquays offered up 7 tips on how publishers can diversify their marketing:
1) Produce content with embedded links
3) Understand and use SEO
4) Collect customer information and data
5) Incentivize customers
6) Promote on social media
7) Get extremely granular with campaigns and strategies
“Once you have defined what these strategies are, you can scale it until it doesn’t work anymore,” he said. Companies can start small, but they can also truly get rich in this business by finding what works and scaling it until it breaks and you need to go back and make changes or tweaks. “With that scale it’s a snowball effect because you typically start to get stronger offers and you have people that are reaching out to you.”
The Rakuten Marketplace is not just a platform for bringing small businesses and startups together with big brands; they are also a community. Publishers are encouraged to get to know other publishers and form beneficial business relationships.
Rakuten hosts multiple publisher and advertising events around the world throughout the year to help bring advertisers and publishers together. Many of these valuable relationships are formed while attending these events. “Making real friends in this industry will help you in the long run whether you’re going through a recession in your industry and people are having a hard time or if they are expanding. These relationships are key,” he said.
Looking forward, Rakuten is currently investing in its global reach and focusing on the ways by which consumer data is interpreted. If publishers can customize affiliate advertisements based on a specific consumer, then advertising can become more pointed, personable and effective rather than wasteful and unnoticed. However, this can be a convoluted problem that deals with a wide variety of devices and publishing platforms, so incentivizing the publishers according to the complete path between click and purchase will be the next step.