Rakuten makes headway into Australian market

Pippa Chambers
By Pippa Chambers | 21 November 2014

Ad industry moguls who have delved into the performance marketing scene will no doubt be aware of Rakuten Marketing – an online marketing agency which landed down under in 2012.

It says its has “significantly” grown as a business in Australia, but how many people know it's here?

Owned by Japanese electronic commerce and internet company Rakuten, the New-York headquartered division of Rakuten Marketing has quietly been making waves in Australia. Its new clients in Q3 2014 include LivingSocial, The Iconic, Masters Home Improvement, Karen Millen and EziBuy – so it must be a big deal, right?

For those who don't know about the business, it specialises in display, paid search, affiliate marketing and, following its recent acquisition of DC Storm, now offers attribution modelling – something Aussie marketers are growing increasingly intrigued about.

As a bit of background, measurement tech provider DC Storm (now Rakuten Attribution) offers multi-channel measurement, attribution and optimisation and is used by brands to reward all parties, at varying touch-points, that are connected to the sale of a product online.

New staff and same store sales up 90%

Globally the company is expanding its clients, as more brands expand to move into additional international markets. It runs campaigns for the the likes of Harvey Nichols, Lacoste, Lulu Guinness, Ann Summers and Macy's.

AdNews took a peek into Rakuten's Q3 2014 results and spoke to its Australia-based MD, Anthony Capano, to see how its global success is translating here.

In Australia it has about 25 employees across Melbourne and Sydney and is growing. Capano said its Sydney office has further hires planned in the final few months of 2014 and early 2015, as a result of its increasing client portfolio.

“We have invested heavily in the Australian market, placing service at the forefront of our strategy,” Capano said.

“Our strongest asset is our people and we will continue to invest in bringing in the best talent across our affiliate, display and attribution businesses. We have had 100% growth in head count year-on-year, with five new team members in Q3 alone.”

Globally Rakuten posted a 20.9% increase in Q3 operating profit, slightly better than analysts' estimates. Revenue was up 14.6% year-on-year (YoY), operating income was up 20.9% YoY and EBITDA was up 20.0% YoY.

In Australia its same-store sales are up 90%. This statistic includes all of the clients that have been with Rakuten for longer than a year – such as Appliances Online, Deals Direct, Saba and Sportscraft, as well as internationals such as Macys and Bloomingdales.

Capano said same store growth is largely due to the efforts of its service teams on both the advertiser and publisher side.

“They have worked closely with our clients to optimise their campaigns and capitalise on the practices we have developed to grow an affiliate program. This growth also reflects the maturing affiliate market in Australia,” Capano said.

“This growth can also be attributed to the greater education within the industry, with regards to the power of the affiliate channel.

“Rakuten Marketing has continued to scale significantly as a business. We have more client service personnel and a growing publisher development team, whose key responsibility is growing client programs and bringing new and innovative publishers into the affiliate industry, and onto our network.”

Clients look to delve into display

In Australia, the Q3 results found that mobile phones accounted for 17.3% of total clicks and 7.7% of total orders (up 248% YoY) were made on mobile in Australia, reinforcing the image of the mobile-savvy Australian consumer.

While it is always difficult to predict exact growth rates, Capano said it is safe to say that mobile-focused commerce will continue to increase “significantly” year-on-year within Australia.

“This will continue to provide similar growth via the affiliate channel as more mobile focused publishers enter the network,” he added.

The company launched its Rakuten Display arm in Australia just over a year ago, following its acquisition of MediaForge, and Capano said more and more advertisers are taking advantage of its display and retargeting offerings.

He also said there is a growing interest from clients on solutions for multiple strategies within the display space, such as Facebook inventory for both retargeting and prospecting, as well as multiple prospecting tactics across the more traditional web inventory. 

For more news:
Affiliate marketing sector beefs up as new US entrant launches in Australia
AOL goes for optimal attribution with Convertro buy
Online video advertising to rocket to $780 million in 2019

Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop me a line at pippachambers@yaffa.com.au

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