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Martech Record conducted the following interview with Ben Benedict, Rakuten Advertising SVP and Head of Industry for Finance, Travel & Technology. To connect directly with Beth and her team to chat about opportunities for affiliate marketing in the financial services space you can email her here.

Financial services affiliate marketing is proliferating as traditional financial institutions and emerging fintech companies seek new and profitable customers. To help promote a greater understanding of this unique affiliate sector, we interviewed Beth Benedict, Rakuten Advertising SVP and Head of Industry for the Finance, Travel, and Technology verticals.

Beth is an accomplished subject matter expert in the financial services industry, having begun her career with Discover Card and Allstate Insurance. She joined Rakuten 18 years ago and leads the company's efforts across its more than sixty major financial services clients.

Martech Record: Thanks so much for agreeing to this interview, Beth. I want to start with a confession. I was not aware of how large Rakuten Advertising’s share is of the financial services affiliate industry. In researching for this interview, I learned that you have many clients in the sector.

Beth Benedict: Thanks. I am not surprised that you didn't know. We have a great list of marquee clients and are always happy to demonstrate that expertise. But generally, financial services companies have strict PR guidelines, so we do fewer announcements and case studies in this category than, say, retail. But among financial services affiliate leaders, we are well known and recognized.

MR: Let's start by having you tell us how financial services affiliate is different from other sectors. In our pre-interview discussion, you mentioned having a vertically organized team. Why is that valuable?

BB: In the past several years, Rakuten has moved to a vertically organized structure for key industries like financial services. Succeeding with a financial affiliate program is different. It falls more in the lead gen segment of the industry because financial services are usually not something you "buy". But financial institution clients want more than mass lead counts. They want to attract applicants that get approved for products like credit cards or loans. Finding quality applicants is critical.

With financial services affiliate, you go much deeper with your partners. Only a finite number of classic financial services affiliate partners can deliver scale. Our team is much more deeply involved in understanding each of those partners, and we immerse ourselves in the data for the program and the partners. Issues like control and compliance are critical.

MR: What about the people side? Does your vertical structure extend to the team that works on the client assignments?

BB: Certainly, that’s how we think. Understanding both the current drivers and the history of financial services programs is essential. People on our team have a long tenure in financial services. For example, we have four directors on our team, and all have a minimum of eight years of experience in financial services. Depth of expertise also extends to individual client assignments and institutional knowledge. Many of our account teams have spent far more time working with a specific company's affiliate program than the company's own employees. Our team acts as an ongoing expert.

MR: You mentioned the top partners. Are they different from those for retail?

BB: Many are. And I'd argue that one of the most significant differences is that many top finance partners are strong consumer brands. These brands are constantly developing new products and ways to offer value to their audiences. Our clients want proven efforts and innovations, so our team needs to be an extension of the client and the publishers.

MR: Is it fair to say that partners have more power in the relationship than partners in other sectors?

BB: They do. Many financial services programs work with fewer, larger partners than the typical travel or retail brand. Our team needs to understand not only what our banks and fintech clients want but also what each partner needs to meet its objectives. We know the partners through both our relationships and the data analytics - understanding which partners drive the best quality, approved applicants. Compliance is also an essential [DD1] piece of the finance puzzle. In highly-regulated industries, we must ensure that the partners present our clients and their programs in approved ways and can stand behind every placement. Each must be a remarkable way to deliver results, and every element must stand up to regulatory review.

MR: Can you talk more about the compliance challenge? Are the major partners more sophisticated and naturally compliant, or is it still the question of a lot of manual work checking and rechecking?

BB: There's no single element to compliance. It’s vital to everyone in the finance ecosystem. The top partners understand compliance issues better than other publishers might, and our team must constantly examine placements and data to ensure compliance. One of the reasons for Rakuten's success in financial services is we've built our own in-house platform to help monitor every program and placement.

MR: Having had some exposure to other compliance solutions, I know how complicated it can be. Getting the data is part of the challenge, but...

BB: Yes, to develop our tools, we reached out to all our clients to understand their legal and compliance processes so our tools could meet every need. We developed our tools in partnership with the clients. There are common elements, but a large established bank’s needs differ from those of a fintech. Because we support many clients, our partners understand our processes and have gotten even better at complying with standards. They have developed systems aligned with our platform. They know what to expect.

MR: But isn't a big part of compliance still manually examining data on placements? If your messages run in 1000 places, someone must review 1000 sets of data.

BB: This is a crucial challenge. We've successfully developed tools that surface problems or potential violations. But tech alone cannot ensure compliance, just as a manual review process cannot guarantee compliance. You need both. I think of our platform as tech that empowers experts rather than substituting for them. For banks, that two-component approach provides greater assurance. We've automated identifying potential violations, but people still review all the problems.

MR: Let's talk a little about compensating partners. With a retail purchase, we know precisely how much was spent. So commissioning is straightforward. But with financial services, the value of a customer comes long after the lead is collected. How do you compensate for quality leads?

BB: You've hit on one of the significant nuances of financial services affiliate. The data and tracking are more sophisticated. For example, we've added additional fields to our commissioning structure to ingest critical data, like a customer score, that predicts how profitable they will be. Aggregated scores help us assess customer quality without needing personally identifiable information. The data enables us to go to a publisher and discuss it.

For instance, we'll tell a partner we are seeing an issue with customer quality from specific personal finance placements and collaborate to address the challenge. Can we shift the marketing message? Can we change to having our placements shown only to highly credit-worthy customers? This enables us to leverage customer quality insights and compensate partners for the value of each lead.

MR: So, are more advanced commissioning strategies common for financial services customers?

BB: They are for our clients. Of course, some highly sophisticated retail, travel, and other verticals programs exist, but advanced affiliate commission strategies are more central to delivering value in Finance.

You don't see a lot of flat $10 per customer programs. Instead, programs tend to vary compensation based on their status as a new customer, lapsed customer, or existing customer, and the individual's likely lifetime value to the client. Also, the specifics of those advanced strategies vary by client and goals. We offer bespoke approaches.

MR: Years ago, financial services affiliate was dominated by credit card programs. Are you seeing that change? And what has that done to the space in general?

BB: Credit cards are still a strong sector, but companies are now using affiliate to market a range of products. Changes in the economy play a factor. We saw diversification in 2008-2009 in the economic downturn with bank affiliate programs needing to market financial products other than more cards.

During the first months of COVID, we saw more clients move beyond cards. And now, as we enter a period of economic uncertainty, we are seeing companies adapt. Sometimes other financial products make more sense for the times. It's really about being in it for the long haul. Savvy clients look for ways to maintain a strong affiliate partner relationship through these changes. That's how you succeed in this area of performance marketing.

MR: On that same theme of diversification, one of the big changes in our industry has been the diversification of brands and partners over the past several years.

BB: We’re seeing diversification in two ways. First, there are new brand entrants beyond the big banks. Some of the best-yielding savings accounts, for example, are now from new companies, and fintechs are getting active in affiliate. Consumers are getting savvier about looking for the best rates. On the publisher side, most of our clients invest heavily in the top financial services partners. But they want to diversify. No one wants to be beholden to a small number of partners. Many clients are interested in the content space, but the challenge is scale. You're not going to drive the same volumes from these publishers as from the top financial partners, but the opportunities for reach and awareness are attractive. You see more ads on social media, travel blogs, and many other content areas, and I expect that to grow even more in the next year.

MR: Are financial services companies moving more slowly in these areas than in other categories? I feel like I see more activity from retail, for example.

BB: I would say yes, for several reasons. First, many financial services companies are still siloed in their marketing efforts. Sometimes, affiliate marketers don't have the same freedom and resources to focus on objectives other than immediate transactions. But that's gradually changing. Second, top partners are more dominant in this sector. Several dozen publishers are great at delivering results in financial services, so the performance bar is high. Third is compliance. We need to be careful about who and how we partner because of industry laws and regulations.

MR: One difference that Rakuten has in the market is that it offers a much broader range of services than affiliate-only companies. How does that impact how clients diversify?

BB: I think it makes our clients early movers in many areas. Our team understands the interplay between media and cross-channel. We also analyze how our publishers are driving traffic. We see companies experiment more with hybrid buys. You must set up a strategy that creates enough scale. If content partnerships are smaller, we need ways to work enough of them to deliver that diversification. All brands need to take a more holistic view of marketing and the role that affiliate and other channels can play for the business.

MR: As we wind up this interview, is that a key concept you want to leave readers with? What should financial services affiliate marketers be thinking about as we approach Q4 and 2023?

BB: Absolutely. Financial institutions, like all businesses, must embrace holistic planning and capitalize on the interplay. If they want the best affiliate program, they need to respond to the huge changes in the affiliate space. They need the right technology and people to enable their programs to evolve, along with the best approaches for compliance, commissioning, and optimization. Financial services companies need to move more deliberately as “fast and loose” is not an option. But neither is stagnation.

MR: Is there a way for financial services leaders to get in touch with you to discuss the category and best practices for their programs?

BB: I love connecting with people in the business. Affiliate marketers can reach out to me by sending an email and I'll be delighted to follow up with them. Whether or not your affiliate network is Rakuten Advertising, this is an industry where we all benefit from relationships and idea sharing. I'd be happy to share thoughts and ideas.

MR: Thanks so much for your time, Beth!

Rakuten Advertising is a leading provider of affiliate solutions for financial services brands, retailers, and many other channels. We are the preferred provider for more than 60% of the largest US banks and dozens of other financial services leaders worldwide.

Brands and agencies choose Rakuten Advertising for unparalleled expertise and distinctive marketing solutions that influence and activate audiences across the many paths and platforms of their digital journeys.

Our partner ecosystem creates unique opportunities to amplify digital marketing performance and is unrivaled in audience scale, partner diversity, and technology innovation. The inventory and data of Rakuten Group, Inc.’s 70+ businesses and nearly 1.6 billion members, coupled with our proprietary technology and global publisher network, drive exceptional business growth for our clients.