Japanese online service provider Excite recently launched its advertising-based points program called Excite Points, claiming to be the first of its kind user reward system in Indonesia. We talked to Nobu Kiyohara, the manager of Excite business development group , about the company’s expansion plans in the country.
We understand that in the last year, Excite Japan has started to look to expansion into other Asian countries, notably Taiwan and Indonesia, with the Philippines next in sight. In Taiwan, Excite has invested in two companies: e-commerce platform PCHome, and women-oriented review site Fashion Guide. Nobu added that they also tried to expand to China, but it was hard for them to identify the right market there. Should its points system prove successful in Indonesia, Excite plans to bring it to the Philippines next.
So how do Excite Points work? As shown in the above graphic, users login to the website and earn points through online activities, such as clicking a banner, subscribing to Groupon, getting a quote from an insurance company, or making purchases. Basically, it’s gamification. The points can then be redeemed for prizes at the Excite Points website.
At the moment, the program is still in the testing phase, and so the redemption options are only in the form of SmartFren phone credit top-ups. To provide more redemption options, Excite is looking to partner with Indonesian telcos Telkomsel and Indosat in the next couple of months. Excite also plans to add other products such as gadgets and more merchant’s products in the future.
The points are funded by the advertisers, or whoever sets the online activity. The company will pay Excite based on CPA (Click per Acquisition) according to what the advertisers want, like sending a quote on new auto insurance, for example. Excite explains that the CPA method offered by the program makes more sense than the usual CPC (Cost per Click). This is because the latter doesn’t guarantee that users complete the advertiser’s target activity even when they have seen and clicked on the ads, as explained on the following slide:
Nobu claims that Excite Points advertisements are better than Google Adsense and Adwords in acquiring potential customers. Google can help you acquire customers, he says, who are already interested in the product, according to user search keywords and content. While Excite Points can help acquire potential customers who might not even know about the product. The points program can introduce products to new customers who are actively seeking to earn points on the website. Of course, I’d personally say that each method has its own strengths and weaknesses.
On the Indonesian Market and Foreseeable Problems
Honestly speaking, the advertisement market is still small in Indonesia. I believe it’s 6 billion ad dollars including TV, traditional media, and online media. Online media consists of about only one to two percent of the whole market, but it’s growing. We are anxious to go into this market and become a game changer.
Nobu revealed that in Japan the 15-year-old points-based business system has encountered problems with “point hunters.” These are certain users who only look to get points without giving any real tangible benefits to the advertisers. A lot of point hunters even go to the extent of making multiple accounts to get the points. Should that happen, Excite already has the technology to maximize the system’s effectiveness. One such example is that Excite can submit a weekly report regarding user CPA, and then the advertisers can approve or disapprove the users regarding the point rewards. This is already implemented right now.
Whereas many other Japanese companies tend to go by themselves into new markets, Excite sees partnerships with the local major conglomerate Sinar Mas Group as its strength and differentiator here in the country. Nobu believes that together with the partner’s local knowledge and Excite know-how, they can execute and deliver the products well.
Excite doesn’t have an entity yet in Indonesia, and the team consists of four to five people located in SmartFren’s office at the moment. Nobu explained that one of the reasons why Excite chose to partner up with the carrier is because the company has data and access on active PC internet users in the country. Excite has also partnered up with mobile CPA network giant Adways Indonesia, and that should help them in the market as well.
The article is updated on August 20. Earlier we said that Nobu’s job title is “business development group manager of Itochu Corporation.” The confusion came because Itochu Corporation as the biggest stakeholder of Excite, is working closely together with Excite for its business development in Indonesia. And as Nobu put it “we are one in a way.” ↩