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Rakuten Buys CauseLoyalty.com

Rakuten USA, the US division of the Japan headquartered Rakuten, has purchased CauseLoyalty.com. Shaking the corporation tree for those who aren’t aware, Rakuten USA owns LinkShare and CauseLoyalty owns SchoolPop and OneCause.

Another affiliate has been bought by a company which also owns a major Affiliate Network. This is the second such acquisition by LinkShare. In June of this year, LinkShare acquired TrafficStrategies.com. ValueClick has made similar acquisitions, most notably the purchase of PriceRunner and MeziMedia. Performics is being bought by Google (ok that one isn’t an affiliate but there is AdSense and Google moving into the CPA arena). ThinkPartnership owns KowaBunga, SecondBite (an affiliate with access to merchant’s shopping carts and customer contact information) and PrimaryAds.

While these types of acquisitions might make sense for the parent company’s overall business strategy (Rakuten, ValueClick, Google and ThinkPartnerships are all publicly-traded companies as well), potential conflicts of interest arise when the Affiliate Network and the Affiliate are owned by the same company. Those very same conflicts of interest are a major contention I have with CPA Sub-Affiliate Networks. The potential conflicts of interest with CPA Sub-Affiliate Networks have, at times, evolved into reality.

A recent example of such reality being with Axill. There is an undeniable fact that when an Affiliate is also owned by the Affiliate Network a situation arises of the fox guarding the hen house. Maybe the fox will be well trained and behaved and will guard the hen house. Maybe the fox will be hungry and see the hens as a good meal. The days of the major Affiliate Networks being a third party are gone. There is no way they can be considered a third party anymore when they are also affiliate and in the case of ValueClick, a merchant as well. It is the world of large conglomerates buying various properties on all sides of the affiliate marketing fence. There is no getting around the fact that for affiliates or publishers that their Network is also now a competitor. While many affiliates may feel there isn’t much they can do about that situation, it is a reality that can’t, nor do I think should be, ignored.

And no, I didn’t overlook the other glaring fact connected with Rakuten acquiring CauseLoyalty. I just left it for last. That is the issue of SchoolPop and OneCause having their own adware shopping reminder application. An application put out by TopMoxie or Incentive Networks or Loyalty Ventures, whichever company name they are most frequently using these days. And of course TopMoxie is also an affiliate themselves, aside from providing adware shopping reminder application to others, such as Ebates. All of which adds layers of complexity to the various business relationships. Will Rakuten keep the Shopping Buddy application? Only time will tell and it will be interesting to see what happens along that front.

Interestingly, the Smarter Companion adware application owned by Smarter.com, a MeziMeda company, was gone from the Smarter.com site by the time ValueClick announced their acquisition of MeziMedia. Of course, ValueClick is in the middle of a class action lawsuit involving adware within their Affiliate Networks. How Rakuten addresses the adware application which is part of CauseLoyalty’s business model will be interesting to watch. The world of affiliate marketing is constantly changing and evolving. The role various companies play in the affiliate marketing equation are no longer clear cut. It is a fact that should not be quickly forgotten. What has been missing for me with all of these acquisitions is something from the parent companies indicating how they manage and protect against the potential conflicts of interest which arise between the various companies for their customers. I do think that as the industry continues to grow and evolve, it is something that the parent companies will have to address. At least I hope so.

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