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LinkShare: Leveraging Technology and Global Markets

January 1, 2009 by Chris Trayhorn, Publisher of mThink Blue Book

Nearly a year ago, LinkShare president Steve Denton stepped down. The company named co-presidents. Jonathan Levine and Yasuhisa “Yaz” Iida are both veterans of LinkShare’s parent company Rakuten.

Lisa Picarille: LinkShare is the only major network to have co-presidents. Give me the break down of your duties.

Jonathan Levine: I used to be the chief technology officer at LinkShare. My primary focus is still product and technology development and to work with our chief marketing officer. I make sure we track, report and pay out commission – basically the nuts and bolts of the technology operations.

Yasuhisa Iida: I came from LinkShare’s parent company Rakuten. My role with LinkShare is just five months old, but I have been with Rakuten for 10 and a half years. My role is the business side – mainly client facing. I’m looking at sales and client development.

LP: When there are two people making critical decisions, can’t that be problematic since there is no real “the buck stops here” ruling?

JL: The benefit of having co-presidents is that two brains are better than one. Yaz and I came from Rakuten at different times and my background is products and technology with some business development.

YI: I was heading up the sales organization. I can bring the best practices from our parent company.

JL: Also, I think Yaz and I are in sync on most things. We are pretty careful when decisions overlap that we have time to have discussions and come to consensus. We are co-presidents of a bigger company. The buck stops with our board of directors and the CEO of Rakuten. Were there to be a case that was perceived as passing the buck, there would be no tolerance for that at Rakuten.

LP: What’s changed at LinkShare since you two took over?

JL: I think the world has changed since we have become co-presidents. LinkShare is still a great company, but I think the U.S. economy is really difficult right now. Retail sales are challenging and lead generation is challenging. We are still profitable and a great company, but we are going through the same issues as the retail and financial sectors.

YI: Rakuten is a very successful company that constantly brings best practices. LinkShare is not one company. It is part of a very strong Internet company. That gives LinkShare employees comfort and confidence. And because Rakuten is in other markets outside the U.S., we have a broad international perspective. We are in a good position.

LP: Is performance marketing poised to withstand a recession?

JL: In a world where things are not certain, for advertisers they want to know whether or not their dollars will be effective and they want the lowest risk possible. If you are a direct marketer you can measure on a performance basis. It will minimize the risk. We have started to see among the big advertisers that they are using comparison shopping engines. There is now more power for advertisers. They are pushing comparison shopping engines back to CPA from CPC. That trend is pushing the risk back to the publishers. Advertisers are in the driver’s seat right now. We do see an overall trend away from CPC and CPM to CPA – it mirrors what we are seeing in the economy as a whole. Credit cards are down. Loan and debt counseling are way up. The retail side is trending lower as consumers are seeking deals to save money. Cash back is attractive to consumers this year.

LP: Given those factors, what are LinkShare’s plans for this year?

JL: We will continue to do in 2009 what we did in 2008. We are continuing to lay the foundation for a broader variety of distribution tools to make performance marketing practical for a wider array of publishers – like those in social media. We are also working with outside companies as vendors to build WordPress plug-ins. We are enhancing our Web Services that syndicate out to ToldYa and Yahoo. Also, using an API to pull URLs for CPA distribution. There will be more interactive links. We will keep enhancing our Flex Links. It’s not just for video and can be used for other things. My roots are in writing code, so we want to develop an ecosystem around a critical mass of products for other developers as well. To be fair to the other networks, Google is also very technology focused as well. They have an army of people writing widgets and they are opening up APIs to the network. Time and again we see that folks who build a platform and open it up to others create a robust, survivable ecosystem for everyone.

LP: Since you brought up Google…

YI: We feel like we have superior service over all of our competitors. We are focused on what we do best, what we can do for clients and what makes us different. Our differentiator is superior service.

LP: What are some of the biggest challenges for LinkShare and the industry at large?

JL: For us, I think as a smaller company, there is always more stuff you want to do. Your reach often exceeds our grasp. That’s nice and natural. You always want that desire to do more. It’s nice to have a parent company like Rakuten. They are the largest e-commerce company in Japan and extremely profitable. They are making investments in areas where we need to be. That helps since it’s going to be a big storm in retail and financial services this year.

LP: LinkShare has gone from a privately-owned family company started by Steve and Heidi Messer to be part of huge Japanese company. How has that impacted business and the LinkShare corporate culture?

JL: One of Rakuten’s biggest distinguishing factors is that everything is fact-based and transparent. If something is good, they say so. If it’s bad, they say so. Rakuten’s founder, Hiroshi Mikitani, has founded the company on five corporate principles that guide the culture of Rakuten and LinkShare including; be professional at all times; it’s not about personal opinions; what matters is the data. That makes for an egalitarian culture. It’s the kind of place I like to work.

YI: We are good at building a strategy. It’s fact based. We have good management and skills and can execute. It’s not all talk and no action. We think, and then we act. We think, act and then make everything into a system. That makes us stronger.

LP: How will you apply those principles this year?

JL: Products and markets continue to diversify outside the U.S. We have a growing U.K. network and there are other markets to get into. We will continue to work on distribution tools and realizing the power of APIs. We feel that we will make the network more useful for a wider range of publishers.

YI: The U.S. economy is tough. We will continue to help clients grow on the retail side – online and offline. We will stay closely working with existing customers and gain new customers by expanding our global footprint outside the U.S.

LP: Any plans to leverage different technologies to facilitate better communications between advertisers and publishers?

JL: It’s all about relationship building. We have our LinkShare Symposiums – East and West. Like the other networks, we use events to effectively put advertisers and publishers together and let them do deals. We are trying to expand the deal-making parts over time to help drive revenue for all parties. The traditional method of a network development sales organization is reliable for relationships. We believe in that and want to expand it. We have a lot of data that we can mine and make those network development people more successful at getting good publishers
. Technology can help us with the matchmaking side of things. There are social media tools. We have a joint venture with LinkShare Japan that has been successful in using social networking to connect publishers and advertisers. We like the idea that we are already seeing Facebook and LinkedIn data in the network.

LP: So what does 2009 hold for LinkShare?

JL: I’m excited about 2009. I think it’ll be a challenge. I think we can build a number of new, compelling products and services. Some that are completely new and then also build on existing technology – like out Easy Links and Merchandiser APIs. I’m also excited about bringing on some smaller advertisers. Historically we have done a good job of serving big advertisers and publishers. But some of our new processes will help us handle everyone from Best Buy to small companies like Peet’s Coffee & Tea. 2009 is going to be a good year.

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Filed Under: Revenue Tagged With: 25 - 25/2009, affiliate networks, Features, Industry Trends, Merger/Acquisition, mtadmin

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