A few days ago, the affiliate marketing industry was rocked by major news: Rakuten and impact.com announced “a strategic alliance to modernize the affiliate and performance marketing ecosystem.”
Long story short, the world was told that Rakuten Advertising will now focus solely on affiliate program management, while all Rakuten-based affiliate programs will migrate to impact.com‘s technology for tracking, reporting, and handling payments.
First off, if you are reading this as an advertiser with a Rakuten-based affiliate program and need a hand with this migration, AM Navigator does all affiliate program migrations free of charge on all of our management contracts. So, do contact us if you need help. We have decades of experience in migrating affiliate programs, and we are here to help you.
Secondly, as someone who has been around the (affiliate marketing) block for nearly three decades, I’d like to share my thoughts on the Rakuten impact.com announcement. Here are my ten thoughts, in no particular order:
- Let’s start with William Shakespeare’s Richard III. In Act II, Scene III, the Third Citizen says: “When clouds appear, wise men put on their cloaks.” Practical speculation, based on signs, always goes a long way. So, however limited information we have on this deal so far, whatever we do know, we should use to our advantage. This is especially important due to the magnitude of the deal at hand. Not only are we talking about two of the top five affiliate marketing players forming a tandem, but we’re also looking at an alliance which affects all key industry constituents: affiliate networks, advertisers, affiliate publishers, affiliate agencies, and more.
- Following from the above, we already see both affiliate marketing agencies and affiliate networks “pluck the day” at full speed. Just two days after the announcement of the alliance, one of the (other) major affiliate networks landed a very specific email in mailboxes of all top affiliate agencies. The message stated that Rakuten Advertising is now a competitor to agencies. And, impact.com cannot be treated as a true technology partner, either, because of their new interest in helping Rakuten grow the services side of the business. The network then highlighted how they are actually different. I’ll only say one more thing here. On top of the traditional tech services (of tracking, reporting, and payments) that every affiliate network handles, this “different” network, actually, does offer affiliate program management services.
- Returning to the chief subject of this opinion piece, let’s recall Ray Dalio and his famous book Principles. In it, he argued that most situations we encounter in life (and especially in business) follow the “another one of those” model. In other words, hardly anything is unique, and most things follow recurring patterns previously registered elsewhere. I love this concept and especially because of how powerful of a motivator it is for ongoing self-education. However, it doesn’t seems to apply to our Rakuten impact.com alliance. In the past, we saw affiliate networks born out of acquisition and rebranding like Google Affiliate Network which launched following Google’s $3.1 billion purchase of DoubleClick and its Performics affiliate division (started in 2008, sunset in 2013). We also saw affiliate network consolidation like the most recent case of Awin and ShareASale, with the former acquiring the latter in 2017, and eventually bringing all ShareASale affiliate programs under Awin’s roof in 2026. But we have never before seen an affiliate network partner with an affiliate network in the way that impact.com has just partnered up with Rakuten.
- Speaking of principles, and particularly strategic ones, the Roman divide et impera (“divide and conquer“) is what seems to be at play here. Instead of keeping competing with Rakuten, impact.com came together with them, but divided each company’s focus: impact’s on the technology behind affiliate programs, Rakuten’s on program management. As a result, impact.com is going to add some 2,000 advertisers’ programs to its client list, while Rakuten will gain the ability to grow their affiliate program management business by as many impact.com programs as decide to opt in for their management services. Shortly after the official announcement, Todd Crawford, a Co-founder at Impact, and first employee at Commission Junction (now CJ), posted on his Linkedin. He wrote that ever since his times at CJ which was always in fierce competition with Rakuten (then Linkshare), “it’s been a long time dream to see two companies form a partnership like this.” Todd has always been a visionary. Not many of us saw this one coming.
- So we now have a super network in the making. Once the migration from Rakuten is complete, Impact, an already exceptionally strong platform, will be a major threat to other affiliate networks. Earlier this year, Awin completed migration of ShareASale-based programs to its platform, becoming a pretty sizeable player. But impact.com is about to turn into an undisputable heavyweight, likely the one with more top brands than anyone else.
- We also have a super agency in the making here. While we have seen a few acquisitions of smaller agencies by larger ones in the past, we’ve certainly never before seen an affiliate network give up its network focus to laser-concentrate on “strategic expertise, program management, and global execution” (see point #3 above).
- Now, since affiliate program management is where the decades of my expertise lie, let’s talk about management for a moment. I believe that while affiliate program management starts with, and is undergirded by, strategy, it is tactics in the execution of tasks related to 5 very specific areas that affiliate managers should be busy with. Growth in affiliate programs comes from (i) affiliate recruitment, (ii) activation of recruited affiliates, (iii) policing and enforcement of compliance among activated ones, (iv) ongoing communication with affiliates, and (v) program optimization. Do network-side “affiliate managers” check all these boxes? To a degree. And way too many end up spending their time (and their clients’ dollars) on affiliate program maintenance vs. full-blown management. Maybe because they are not network-agnostic, like an affiliate agency must be.
- Going back to the alliance, it seems that it’s gonna lead to a conflict of interest resolution for Rakuten, at least to a certain extent. Besides Rakuten Advertising (the affiliate network arm of Rakuten which, as we now know, is about to become a service company instead), Rakuten also owns such two major affiliate/publisher players as Rakuten Rewards (formerly Ebates) and Cartera Commerce. For years, and especially since Rakuten’s acquisition of Ebates for $1 billion in late 2014, everyone knew that Rakuten makes money on the commission as Rakuten Rewards and then, with Rakuten’s affiliate network-based merchants, an additional commission of the commission on top of that. Once Rakuten’s network is no more, that side of things (as well as multiple related concerns) may be off the table. Furthermore, the press release says that now “through Rakuten Rewards’ direct consumer signals, advertisers can better understand incrementality, improve attribution, and optimize performance, while driving both customer acquisition and long-term loyalty”.
- In the coming months we are likely to see more hiring, and especially in the affiliate program management space. In the past few years, we’ve seen many affiliate agencies crumble, while those that remained have been trimming down their teams, leveraging ways to optimize how they manage affiliate programs (and primarily via AI-powered approaches). Recent layoffs at multiple agencies have created quite a pool of good talent out there. If I were Rakuten, I would certainly look at leveraging this opportunity to strengthen their teams.
- Finally, I believe that more consolidation is coming in the industry, and especially on the agency side of things — be it by Rakuten or by others to counter whatever Rakuten is about to become (see thought #6 above).
This wraps it up for me. Though much more is to follow; and, as always, the comments under this article are wide-open, and I invite you to share your thoughts on this Rakuten impact.com deal, its immediate and long(er)-term implications, and anything else you believe should be highlighted in this regard.