Affiliate communication, Point Site, Resale market, Cashless payment
2020/04/1７
SPI Interactive have worked with cases with digital media audit and consultation for dealing with many international advertisers so far. In these works, I found some critical issues for marketing communication.
Many of marketing teams should take quick action and to be required to achieve clear KPI goals with the lowest cost day to day through digital platform. As a result, marketing team and ad agencies develop communication campaign and select suitable media plans to meet given and a part of all KPI achievements. However, some of them take only responsibility of these given and narrow objectives and target KPIs. To put it the other way, some of them don’t need to take care of and take responsibility for fundamental business impact whatever it bring negative impact to your business.
As a result, in some cases, it seem to be some sales opportunity loss, falling market prices and brand/product risk. In one of cases, sales opportunity loss could be 100M yen by our estimation.
Also, it could be caused by marketing staff doesn’t know and consider whole market situation such as market, media, platform business, and general consumer behavior deeply and widely.
It’s only summary report. I’d pick up key points from full report for readers to understand the overall market situation.
Narrow marketing objectives and KPIs make marketing team at frontline not take any responsibility of other business impact because in many cases, there are many LOBs who are dealing with product, brand, media, sales, purchasing, etc. each LOB staff has different objectives and KPIs whatever company would eager to maximize sales and profit and minimize cost. Also, each LOB tend not to be exceeding other LOB R&R. For example, the retail sales team doesn’t have any responsibility of sales through eCOM if the retail sales team has objectives and KPIs related with only their own sales channel and marketing activities.
Main reason is that marketing team tends to be focusing on only specific KPIs. Many of them don’t mind other business side-effect by their marketing activities because they don’t have any responsibility except their own KPIs. Company evaluates only their achievement of their KPIs.
If the person who take responsibility of only marketing KPI such as CVs and the number of application, CXO and relevant senior management level should overlook whole marketing sales and marketing activity impact to business loss.
KPIs are very important to know visible indicator for marketing and business evaluation and decision. Hence someone who should not evaluate only narrow and some specific KPIs with narrow viewpoint and marketing objectives, also overlook wider marketing and business impact by marketing activities through sales touch point, distribution market, business model, consumer behavior and other marketing related business.
For CXO and high senior, if it’s not sure whether the business has been placed in such a condition.
Under product and brand communication, there are multiple choices for digital media. In Japan, many product and brand company have been using Display, Search, Video, SNS.
Moreover, by product and service features, some brand and product select to use “Affiliate communication” due to the deep and wide information by 3rd party.
From audience side at digital media, they have strong motivation to search information more and more to meet suitable information for their consideration of judgement to select the best one.
Whatever many product and brand side try to get attention from audience by display and search, nowadays many audience don’t want to pay attention them so much because of too many ads. They avoid click them. There are many fake ads and not suitable ads too whatever publisher, media and DSP use high quality targeting data. We think people is going away such general ad execution media day by day.
As a result, many brand and product marketers have been using affiliate communication.
注１.市場規模は、アフィリエイト広告の成果報酬額、手数料、諸費用(初期費用、月額費用、オプション費用)など合算し算出した。
注2.2018年度は見込値、2019年度以降は予測値
SPI Interactive has searched current affiliate activates in Japan since 2019 Aug. There are some issues for product and brand communication to use affiliate commutation.
What we need to pay attention is not just for marketing communication specialist.
We would recommend CXO level know your current digital communication and backside market that is going on for your brand and product by non real your consumers and it’s really excellent marketing commutation ROI or not.
The reason is that your marketing communication team deeply think how to achieve KGI/KPI and to improve ROI. But frontline staff of communication basically is focusing on very narrow part of their role.
Some brand and product through affiliate campaigns generate sales opportunity loss and market price down. Also, some results of campaign is far away from the objectives that brand and product company set.
Some affiliate sites are not good enough quality for keeping good brand and product image to consumers.
It seems that some affiliate campaigns run well. But its cost is going to be too high for different KGI/KPI/Real sales contribution.
Under affiliate ad scheme, tracking method is very important. It has been facing tracking issues.
Notice: In this basic summary, we are not able to explain detail and case studies. The main reason is that what we explain about affiliate ad issue and solution is giving some idea for some people who are cheating advertisers to avoid checking “Communication quality” by advertisers and 3rd party authorities. Also, some of point-out and solutions are the hint for resellers to do more resale business. We will provide solution idea to authorized client only under our digital consultation.
Of course, media cost for each media depends on CPA and the target number of acquisition because the number of potential acquisition target are limited. Also, depends on product and service, acquisition hurdle and potential target numbers are different. Marketers should know each media business model for background cost.
Pure Affiliate:
Basically the cost is only site development and running cost. No extra cost for CP applicants through these affiliate site because these affiliate site owner earn these cost from ad agency, ASP, client directory.
Point Site:
It needs to give incentive such as “POINT” to applicants. CPA is included in these incentive cost. The high incentive can make point site acquire CP applicants easily. As a result, CPA tends to be higher than Search/Display ad and Pure Affiliate automatically. Also consumers like to apply CP through point site because of incentive.
Point Site + PSIA(Point Site Inducement Affiliate) + (Search/Display):
In addition to incentive cost, it needs to acquire new members to make them apply client campaign if the current point members are not enough numbers. As a result, it needs to run ad campaign for acquiring new point site members. It’s kind of recruiting. It means point site needs to pay incentive cost for campaign applied members, plus ad cost for PSIA and display/search ad. If Point site cover these extra cost by itself under fixed CPA, its revenue is going down. It’s very hard to think.
Currently, many brand and product companies use affiliate ads. In SPI interactive tracking, here is some solutions for using affiliate ads around some brand and products.
Notice: In this basic summary, we are not able to explain detail what the affiliate market is going on. The main reason is that what we explain about affiliate ad issue and solution is giving some idea for some people who are cheating advertisers to avoid checking “Communication quality” by advertisers and 3rd party authorities. We will provide solution idea to authorized client only under our digital consultation.
The category tends to use affiliate because there are many competitors and no big advantage of product and service or difficult to explain differentiation or easy to compare function, spec, price, advantage and disadvantage with ranking and parallel comparison.
In the past, brand and product side showed comparison data and chart such as Brand A, B, C, D. However, they were not able to show other competitor’s brand and product names. On the other hands, affiliate ads can do it.
At least, it would be better for high level marketing communication person who is dealing with below product/service categories to review your affiliate campaigns from now on.
Financial :
Banking, Loan, Credit card, Stock trade, Insurance, Investment service, FXHome :
House, Reform, Real estate, KitchenCar:
Car and motorcycleElectronics :
Home electronics, Digital deviceFood/Drink :
Soft-drink, Alcohol, Water, Snack, Medical/Beauty/Diet/HealthLifestyle :
Online Video/Music, Travel, Moving, Wedding, Funeral, Beauty/Diet, Shopping site(Comparison site), ISP, Gas, Electronics, Fashion/Beauty/Hobby, Mobile phone, Gift, Sports/Outdoor, Baby, Cosmetics, DIY tools, Delivery serviceBusiness:
eCom, Business tool and service, Application, Side business, Job searchOthers:
Campaign, Promotion, Benefit, Sale information
Notice: In this basic summary, we are not able to explain detail and case studies. The main reason is that what we explain about affiliate ad issue and solution is giving some idea for some people who are cheating advertisers to avoid checking “Communication quality” by advertisers and 3rd party authorities. Also, some of point-out and solutions are the hint for resellers to do more resale business. We will provide solution idea to authorized client only under our digital consultation.
There are many Point-Sites. They have network to convert each point. Some of them provide service that point can covert to airline miles and other company point service. i.e. NetMile point to Cash, and JAL or ANA mile. Also, NetMile point to T-point, d-point, WAON point, and Amazon Gift card which can use for shopping.
Ref.https://www.netmile.co.jp
In 2019, Japan has big wave about payment method. There are two main reasons. One is new payment methods have been expanding. One is new cashless method such as “QR code” with smartphone. Other is Japan Government drives cashless payment in Japan market.
There are some major companies to provide new cashless payment method. Share of credit card is not very strong. Also, major payment of working people is “Contactless smart card such as “Suica” and “ICOCA” which Japan Railway issues. The reason why they are familiar them is many people use “Train” and “Bus” daily.
Ref.https://www.sej.co.jp/services/cash.html
Ref.http://www.lawson.co.jp/service/payment/settlement/
Ref.https://www.family.co.jp/services/payment.html
Currently, Government supports “Cash Back” for cashless payment transaction based on Tax found.
For Japanese, many don’t use Credit Card and other digital payment solutions because Japanese believe “Cash” is the strongest payment method. It means only people who use cashless payment can have extra benefit from Government.
Some of them know well how much cash back and discount for product and items, also they know how much they can receive points and resales profits too. The Government Cash back campaign is limited terms.
It will be expired by the end of June 2020. After that, Gov. will provide other cashless benefit to people.
But, the tax found is limited. Once these “Cash back benefit” form Gov was stopped, the purchase intention will be dropped suddenly because from 2019 Oct 1st, Gov officially enforce new consumption tax rate from 8% to 10% (Except food). That’s strong negative impact to reduce purchase intention.
＜Notes on citation, reproduction, and use of this report＞
※ This report was work performed on the behalf of SPI Interactive and is protected by copyright law. Please be sure to give credit as appropriate when quoting or reprinting this release.
※ The information contained within this report was based solely on research, analysis, determination of risk, and conclusions by SPI Interactive. Please note that we cannot be held legally responsible for any activity based on this report.
