Revenue Magazine Covers Japanese Online Marketing

Eric Reyes of Revenue Magazine recently wrote about the fast-moving world of online marketing in Japan. The article, entitled “Eastern Promises” gives us a broad view of how affiliate marketing in particular is carving a uniquely Japanese niche in the online marketing world. Yours truly was interviewed for the article, and anyone who follows my blog will recognize some of my statements from past blog entries. One interesting point covered in the article is a statement by a Linkshare representative who said that the Japanese market has reached saturation. There is no more room for new networks to enter the field, and little room for existing networks to expand. I’ve covered this in the past, though I don’t agree that the market is completely saturated. There is room for businesses looking to service the mobile space which I feel is still not fully mature in terms of marketing sophistication. Overall Mr. Reyes did a fine job in his article. Check out the article here and let me know what you think.

People, Places and Things

Ok, let’s get the apologies out of the way…I’m sorry I haven’t written didley-sqwat in over two months. There was so much going on since the start of the year that I hardly had time to squeeze out an original thought let alone write something interesting. I’ll return tomorrow with a review of an article written in Revenue Today about the Japanese affiliate industry, updates on the local market and pending changes to my blog. For now, I’ve got people to see, places to go and things to do. See ya.

Performance based ad expenditures up in 2007

AUN Consulting released their 2007 Internet ad report and found that performance based ad spend was up for both web and mobile. The total amount spent by Japanese companies on pay-for-performance ads in 2007 was 144 billion Yen (a 39% increase from the previous year). Web based P4P ads up 32% to 127.7 billion Yen, while mobile P4P ads were up 152% to 16.4 billion Yen. Performance based ad expenditures still represent a fraction of overall online ad spend. Total  Internet ad expenditure for 2007 was 489.3 billion Yen (web: 430 billion, mobile: 59.3 billion) Search based ads was also up 23% in 2007 to 107.8 billion Yen while contextual advertising saw a 109% increase from the previous year finishing off at 19.9 billion Yen. I believe that the online advertising market in Japan has finally come to its own. Spending will continue to climb as more advertisers discover the reaching power of SNS and mobile properties. Performance based mobile advertising will probably see the biggest increase over the coming years with projected spending surpassing web based spending by 2011. Mobile gaming and SNS sites such as Mobage Town and Mixi Mobile stand to benefit the most from the projected increase. I haven’t made any predictions for 2008 yet, but if I did, it would include an 30% increase in the number of mobile affiliate networks operating in Japan and possibly Yahoo Japan opening up their contextual ad business to both web and mobile publishers.

Networks begin sharing information on fraudulent partners

Back in June of this year, the Japan Affiliate Service Kyokai (JASK), an organization of Japanese affiliate service providers, announced that starting in October 2007, they would begin sharing information to identify affiliate partners with which member companies have discontinued agreements due to fraudulent activities. Member companies will refer to a common database of partner information when taking on new affiliates or examining the continuation of an affiliate agreement with a pre-existing partner on their network. No doubt, this is a move in the right direction for the Japanese affiliate industry. Though the level of fraudulent activity is no where near what it is in the USA, Japan might be seen as virgin ground for future scamsters, so this kind of inter-network cooperation should help both the providers and those whose money is most at stake, the advertisers. The following types of information will be used to identify affiliate partners that have committed fraud:
1) Name (company name) of affiliate partner
2) URL of registered website
3) e-mail address
4) Details of fraudulent activities
5) Industry of relevant advertisers
6) Seven-digit registered bank account number
7) Name of Member Company

One thing that wasn’t clear in all of this was if JASK member companies plan to create some kind of appeals process to allow affiliates an opportunity to defend themselves if they feel they were unfairly placed on the blacklist. I speak from personal experience when I say that there are times when an affiliate provider will kick you off their network over a simple misunderstanding that could have been cleared up with one phone call. Now with all JASK member networks working off the same blacklist, a professional affiliate marketer may find himself banned from network X due to some SEO practice that is not necessarily looked down on in network Y. In addition, has JASK clearly defined what falls under “fraudulent activity”? Unless there is a clear and common set of standards among all member networks, I fear that we may see good affiliates unnecessarily prevented from doing business.