How Rakuten Rewards Adapts to a New Affiliate Model – First Party Ads Platform – AdExchanger

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Rakuten Rewards, formerly Ebates, is an 800-pound gorilla in affiliate marketing.

But what’s the point of being bigger if no one wants to be in an affiliate?

Since its acquisition by Japanese e-commerce giant Rakuten and the rebranding of Ebates, Rakuten Rewards has set its sights outside the affiliate category.

“We are exiting the affiliate market, because we can target the use of our first-party data,” said Kristen Gall, president of Rakuten Rewards.

By combining owned and operated content with registered audiences to target, Rakuten Rewards has built a first-party media platform.

AdExchanger met with Gall about Rakuten Rewards’ first-party ad platform strategy, and how its value has evolved to meet the changes made by Walled Gardens by Amazon, Google and Apple.

AdExchanger: What’s new in Rakuten Rewards since the rebranding in 2019?

Kristen Gal: Understanding how people navigate the e-commerce system is critical. Over the past two years, we’ve come to realize the wealth of first-party data we’re sitting on.

We used to be a one-size-fits-all resource, wherever you are [as a merchant] Upload your cashback rate on our website. And it worked. But what we’ve been able to launch over the past year and a half is a program called Personalized Rewards, targeting an individually likable audience of merchant partners. It’s akin to how they use Facebook or Google to identify an audience to reach for acquisition, retention, retargeting, etc. We use money as leverage along with arguments.

What does “cashback as leverage with media” mean?

We are able to see the elasticity of demand. If you raise the cashback rate to double digits, I can tell you that you will reach 3 times or 4 times the trading volume on our platform. This is really consistent.

Next, the second thing we do is sell media on our platform to invite people to the party. If you raise your money to 10%, but don’t tell anyone about it, it’s like throwing a party without invitations.

The cashback mix, as well as the media hitting the right eyeballs, is where we get the most impact.

Are all of your ads on owned and managed properties?

It is primarily on our own content. We have banner ads at the top of the site, placements on mobile or desktop devices, ads on our app and a browser extension that we call the ‘button’.

Then we have our outreach programs, like email and push notifications, which are really impactful and can be targeted by first-party data.

A lot of what we do for our merchants is new network acquisition, because it’s very expensive to acquire new customers on platforms like Facebook and Google right now. and CPAs [cost per acquisitions] significantly. We’re kind of a secret alternative, where they can target very specific groups. Saks can upload their data and create a specific audience for customers who haven’t purchased in a year or more. They are looking for accurate targeting ability on alternative platforms.

We are working on an off-platform ad product that we call audience extension. This reaches our audience on other platforms, including display and social networking.

Is this a DSP partnership or with big social platforms?

We work with the Trade Desk and do some work with Facebook. This gives us the ability to extend our reach to our audience. We rely a lot on people who come back to our site or apps, so it pays to extend campaigns to other platforms these members use. But it is in beta now.

Will Amazon be your partner, even then Remove Affiliate Program last year?

That was a bad day. We already had a great partnership with Amazon at that point. And that was a very hard blow.

Fortunately, we have our own first-party data and are in a position to transfer the volume to other players.

What we’ve seen in the past is that when a retailer leaves the platform, about 75% of shoppers stay on the platform. Because they are, effectively, very geared towards cashback offers.

The world of affiliate marketing has changed significantly, even over the past year or two. And a lot of it revolves around a level of sophistication around data and expectations for ROAS that haven’t been in space before. It now owes the same expectations of metrics and the same expectations of performance as the display network, social networking, or search.

There is also the merger of merchants who see us as part of an opportunity to combat the Amazon.

Nike has pulled out of Amazon and wants to compete with them more directly. They’re one of our biggest partners, because we give them…the right targeting and metrics.

what do you mean by that?

For example, Nike sells through Foot Locker and through other retailers on the platform. But Nike also has its own direct affiliate program. Increasingly, these brands are bringing much of that spending and portions of their portfolio into the direct-to-consumer realm. Nike’s marketing engine is much bigger than it used to be. They used to let retailers own this marketing to shoppers, as did almost all brands. But they bring that power back inside.

Nike uses us as a mechanism to acquire new customers to compete against their direct competitors, from a DTC perspective, and to take that power away from retailers. And they do a very good job at it.

I think as brands see the smaller DTC startups doing really well, they realize how much power they have in this one-on-one relationship. And if you can convince someone to go directly to the brand’s website, that’s actually a lot more than the margin dollars in the brand’s pocket.

So we see brands playing significantly stronger on our platform, because they understand that the profitability equation can be more positive for them.

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