Linkshare updates

Starting March 16th, Linkshare Japan reduced the age requirements for registering as an affiliate on their network. The requirement was dropped from 20 years to 18 years. This is in keeping with trends showing a greater amount of mobile and web activity among Japanese teens than previously thought. Many popular blogs and mobile sites are operated by people under 20 years old. By lowering the age limit Linkshare hopes to tap into a lucrative media market.

Network Profile: ValueCommerce

The first Japanese affiliate network I’ll be profiling is the biggest and oldest dog on the block; ValueCommerce. My dealings with ValueCommerce go back to its begining in 1999. Back then I was running the online sales division for a Japanese direct marketer. After experimenting with CPM and CPC media buys, I went looking for a performance based advertising solution. ValueCommerce had just started offering affiliate program services that year and within a few months I signed on as one of their first merchants. It was a slow climb, but within a few years, my affiliate program was the number one earner for ValueCommerce and top of the list in total commission payments to affiliates. This success developed as a results of ValueCommerce’s main strength: a broad media reach and quality partner sites. Today ValueCommerce continues to lead the pack in a fast growing industry. Back in 2005, Yahoo Japan agreed to purchase 49% of ValueCommerce thus forming a partnership that would allow ValueCommerce to gain access to Yahoo Japan’s media channels for distribution of its affiliate offers. The Yahoo Japan deal effectively increases ValueCommerce’s partner network to over 370,000 when you include he Geocities properties into the mix. Japan in general lags behind the use of data feeds among the top networks. ValueCommerce is working hard to get more of it’s merchants to use data feeds, but at last count only about 3 merchants out of over 1600 supply data feeds to it’s affiliates. Linkshare is a bit ahead with over 20 merchants out of 270 using data feeds. On the technical side, ValueCommerce offers both merchants and affiliates a robust (and bilingual) reporting platform. The level of analysis available from the ValueCommerce system is unlike any of is Japanese competitors. Not all is rosy though. Many smaller networks offer better handling of mobile affiliate offers and the current mobile partner network is still too small and too dependant on CPC to offer significant ROI for smaller merchants. I’m told that ValueCommerce is working to address these needs. It no doubt must feel the pressure to improve its mobile network as players like Adways and Mobile Affiliate continue to nip at their heels. My overall opinion of ValueCommerce is quite positive. VC is the bull in the china hop and every affiliate network in Japan has no choice but to watch their every move. As the industry continues to expand at a rate of 40% a year, ValueCommerce will have to find ways to improve its mobile business, expand its media reach without sacrificing the quality they have built their reputation on.

From Loan Sharks to Loan Minnows- Cashing in on loan affiliate programs

In a country with one of the highest personal savings rate in the world, it is suprising to see how well the consumer finance industry is doing here in Japan. Cashing or card-loan businesses as they are known here is a multi-billion dollar industry. Over the last few years, the industry has undergone alot of regulatory changes (most needed), but the recent capping of interest rates seems to have had the biggest negative affect on those of us that make a living promoting card-loans online. The first thing many affiliate marketers noticed was an overall drop in average commission payouts per transaction. For those who drive traffic to their loan offer sites via direct media buys and keyword ads, the drop hurt most. I also started to notice some of the big finance companies either dropping all of their affiliate programs or consolodating all of the programs into one network. Those of us who manage media sites targeting consumer finance remember the good old days of loan offer commission payouts (last year). When loan companies started using affiliate programs to drive loan applications to their sites, affiliates could expect commissions as high as 30,000 JPY ($300 USD) per completed applications! Before long, every Tom, Dick and Harry with a web page was picking up loan banners and buying up top keywords. Eventually the loan companies began to segment their affiliate commission system to allow high payments for contracted loan applications and lower payouts for completed applications. We even noticed some companies paying very high commissions on the draw down (when the borrower withdraws money from an ATM). There is little danger of loan companies abandoning affiliate marketing especially now since there is a greater demand for new customer acquisition. But the lower commission rates will mean less direct ad spending by super affiliates and more emphasis on building quality informative sites. What can we expect to see in the future for Japanese consumer loan affiliate programs? I expect to see smaller affiliate networks focusing on finance and the larger networks working harder to keep their finance merchants by implementing stricter compliance rules for loan affiliates. The days when loan affiliate programs paid 30,000 JPY per application may be gone, but there is still much gold to mine in this valley.

Japanese Network Highlights

Since the main focus of this blog is an inside look into the Japanese affiliate marketing industry (or Japanese online media in general), I thought I should occasionally profile some of the popular affiliate marketing networks. I’ll try to add at least one network profile a week and include some general information from both merchant and affiliate sides. At the moment, there are at least 50 networks operating in Japan but I estimate that the top 5 cover 90% of the market. I’ve already started to compile a list of networks to cover including some of the smaller mobile platform networks that are showing tremendous promise in a fast growing field. If there are any networks that you would like me to to profile, please feel free to ask.