New Trend in Online Revenue

Popular mobile game site GREE is bucking the recent trend in decreasing revenue for online businesses. Last month GREE announced that their net profit will probably hit JPY3.5bn on sales of JPY11.2bn for the financial year ending June 30th. These numbers are nothing to sneeze at. At a time when corporate ad budgets are being squeezed in Japan, it is impressive to see a fairly new company report earnings as high as GREE.  Most online businesses continue to rely on ad dollars to fire their growth engines. And though over the years we have witnessed a redistribution in ad spending from traditional print and TV to online media, the last few quarters have revealed to us that even web and mobile players are not immune to ad spending cutbacks. Unlike most SNS and content sites that rely on corporate ad revenue, GREE generates most of its cash flow directly from its users.  More than 70% of GREE’s income is derived from selling enhancements and avatar accessories to users of its free mobile games. The comparatively low cost of selling digital content will help make companies like GREE, Yahoo Auctions and other similar entities the dominant business models for the digital age.

Better Shores: Why you need to come to Japan

As a Japan-based on-line marketing consultant, I’m the first to admit that the recent economic downturn worried me more than just a little. Most of my clients are overseas businesses looking to expand their on-line sales in the Japanese market. Marketing and advertising are usually the first victims in any recession and so I fully expected to see a marked decrease in the number of inquiries in my email in-box.  Yet strangely enough, I have witnessed just the opposite. Why the surge in interest in Japan? It doesn’t take a genius to see that companies are desperate for sales. And even though Japan is not immune to the problems facing America, there is one notable difference between there and here; The Japanese still have cash. Plenty of it. While Americans gorged themselves on endless credit and sub-prime buffets, the Japanese quietly continued to sock away cash in zero percent interest bank accounts. This means that even though unemployment is on the rise and factories are closing, the Japanese have more spending capital available to them then their American counterparts.  The world economy has changed. America may have lost it dominance in matters of growth and commerce and now many are looking to the East (China, Japan, Korea, etc) as ground zero for the next era of economic bloom. If you have an on-line business, you need to start planning your entry into the Japanese market now. That means making the necessary connections locally to assist in brand-building, site and product localization, customer service and building an affiliate sales based. Over the next few weeks I will be writing more about what you need to do to start your entry into Japan. Don’t let the economy get you down, make Japan part of your long-term sales strategy.

ValueCommerce Launches Movalue Affiliate Service for Mobile Phone Sites

In a move sure to make many of Japan’s mobile media ad networks a tad nervous, ValueCommerce, Japan’s oldest and largest affiliate media network, has announced the launch of their mobile affiliate platform. The service, called MoValue, promises to offer improved convenience to a broad array of e-commerce sites (advertisers) and media (affiliate partners). ValueCommerce plans to capitalize on its expertise in the affiliate marketing space and create a service that addresses the specific needs of mobile publishers. For several years now, the Valuecommerce platform offered features for mobile publishers and advertisers. Plans are to have the current mobile services rolled into the MoValue platform in the future. Below is a list of features I copied from the official press release. This platform is much needed good news for ValueCommerce. I always felt it was unfair that the largest and oldest affiliate provider in Japan did not have its own mobile platform. Now they do. And with their current line up of partners like Yahoo Japan, we can expect MoValue to offer mobile penetration unlike smaller competitors.

Features of Movalue (for e-commerce sites/advertisers)

• Support for links to individual products, effective for product promotion
• Separate reward settings for specific media and specific product groups
• Budget limit setting
• Support for unique user check
• Support for systems-based management of ad-placement schedules
• Media approach using e-mail network
• Support for incentive point programs
• Media examination by dedicated staff
• Initial cost: 50,000 yen (excluding tax)
• Monthly subscription: 40,000 yen (excluding tax)
• Commission: Variable with performance-based reward

Features of Movalue (for affiliate partners)

• Control screen accessible to both PCs and mobile phones, plus rich reporting
• Three carriers covered by a single ad tag
• Real-time editing of ad tags
• Support for links to individual products
• Support for incentive point programs
• Usage is free of charge. Reward rates start from 1,000 yen with ValueCommerce covering the bank transfer fee.
• E-mail support available

Newscorp plans Japan online ad entry

No longer content sitting in the sidelines while Japan’s online ad market grows past $6 billion a year, Newscorp plans to enter the Japanese online ad market in a big way. The initial plan for the New York-based media company is to purchase ad space from Web-site operators, then find marketers to fill the space and distribute the ads. With the goal of increasing global online ad revenue to 100 billion yen over five years, Newscorp will need to make some targeted acquisitions soon. With the ad market in Japan already reaching saturation, I think snapping up a few floundering mobile and web affiliate networks might help build the foundations of a lucrative ad business. Or Newscorp could approach Yahoo Japan directly and tender an offer for it’s share of the Valuecommerce network.  Owning a property like Valuecommerce with its large inventory of ad slots can’t be a bad thing.