Affiliate Marketing in Japan: Key Research Findings 2019

Yano Research Institute (the President, Takashi Mizukoshi) has conducted a survey on the domestic affiliate marketing market and has found out the market outline and trends of affiliate service providers.

Transition and Forecast of Domestic Affiliate Market Size
Transition and Forecast of Domestic Affiliate Market Size

Market Overview

Continuous sales expansion at leading ASPs (affiliate service providers) has led the market to be on the rise, with the number of affiliate sites and ad placement by the advertisers keeping stable increase, though the growth rate has somewhat slowed down. Such a rising tendency raised the market size in FY2018 to attain 288,180 million yen, 110.2% of the size of the previous fiscal year, and that in FY2019 expected to achieve 313,320 million yen, 108.7% of the size of FY2018.

When observing the market by industry, affiliate marketing expanded in the financial industry, especially the investment as well as the asset management products in the areas of virtual currency and robo-advisers. It has also expanded in ecommerce, in travelling (as the Golden Week period in May 2019 had happened to be long), and in household electric appliances due to last-minute surge in demand just before the tax hike in October. Expansion of the affiliate marketing market has also been contributed by the increasing number of enterprises dealing in relatively high unit prices, which include those that develop subscription business.

Enhancement and efforts by each ASP to secure more publishers as affiliate partners and to focus on increasing ad placement at various media for the existing advertisers have also brought about successful results to the affiliate marketing market. Some ASPs expanded their sales by building a trustworthy publisher network for satisfying the requests by the clients of sending in good customers, which gained confidence as well as the number of clients.

Noteworthy Topics

How Platformers Cope with Changing Regulations

Modification of regulations by the external environment, such as limited cookies via ITP (Intelligent Tracking Prevention), search ranking algorithm update at Google, stricter ad placement at affiliate sites due to sterner regulations at Yahoo, and severer ad placement even at SNS, as Facebook having closed down some advertisement-specific accounts, is considered as negative factors for affiliate marketing.

On the other hand, however, stricter regulations by the current platformers have hardly affected those sincere publishers and advertising agencies, but adversely affected some affiliate partners and advertising agencies not observing the laws and regulations such as Act against Unjustifiable Premiums and Misleading Presentations and Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices. When considering that sterner regulations oust some illegal sites, they provide positive contribution to the affiliate marketing industry in the long run rather than being a negative factor.

Future Outlook

The domestic affiliate marketing market is projected to continue expanding to attain 465,414 million yen by FY2023.

The followings are considered as the expanding factors for the market:
First of all, major advertisers that own their in-house brand products are increasing the use of online advertisement. This has strong possibility of increasing direct response advertisement or ad placement at e-commerce sites, which is sure to favorably affect the affiliate marketing market. In addition, as the promotions via affiliate marketing having obviously proved to be highly effective, the advertisement through affiliate publishers have begun highly appreciated, which encouraged the market expansion.

Secondly, prevalence of ecommerce has also been the major factor for the market expansion, with higher ratio to use online for product purchase as well as lower hesitancy observed toward online payment by the consumers. In particular, weight-loss products and cosmetics for women are promising items. Pervasion of subscription business has also boosted the market.

There are some other factors for the market expansion: Wider acceptance of cashless having led affiliate marketing to expand in the financial industry, and so-called “closed” affiliate services, where affiliate partners required to register, have started being provided by increasing number of ASPs and affiliate publishers.

Research Outline

1.Research Period: September to December, 2019
2.Research Object: Leading affiliate marketing service providers (ASPs)
3.Research Methogology: Face-to-face interviews by the expert researchers, and partly questionnaire survey

Affiliate Marketing Market

Affiliate marketing is a type of performance-based marketing where a merchandiser (advertiser) that wants to advertise its offering places a link of its own company website within some media such as blogs, websites, and mail magazines, and gives rewards to the owners of such media (publishers) when a visitor or a customer registers membership or purchases the offering of the advertiser via that link.

Affiliate marketing in this research indicates the following four types: 1) ASP (Affiliate Service Provider) style, where ASPs act as agents that go between businesses (advertisers) and publishers, while the former selling some products (offerings) and the latter publishing advertisement by mentioning about that products (offerings). ASPs earn advertisement and commission fees from the businesses while provide rewards to the publishers; 2) Shopping mall style, where virtual shopping mall operators offer shop owners a place to promote the products (offerings) at the mall in exchange earn advertisement and commission fees; 3) Stand-alone type, where e-commerce owners themselves pay the publishers for mentioning and writing about their products (offerings); and 4) Platform type where platform owners provide ASPs and advertisers the platform equipped with tracking systems and analysis tools needed for affiliate marketing.

<Products and Services in the Market>

Affiliate marketing

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