What Is an ASP (Affiliate Service Provider)? A Simple Explanation of How It Works, Its History, and How to Choose One
Article Summary
- An ASP is a company that acts as an intermediary between advertisers and media outlets, handling everything from ad delivery to performance measurement and payment of commissions.
- It originated in the United States in 1996 and began to gain popularity in Japan in 1999; the market continues to expand today.
- OPEN, Inc. operates "PRESCO," a next-generation ASP that leverages AI and RPA.
What is an ASP (Affiliate Service Provider)?
| Term | Definition |
|---|---|
| ASP (Affiliate Service Provider) |
We are an Affiliate Service Provider (ASP) that acts as an intermediary between advertisers and media outlets for performance-based (affiliate) advertising, handling everything from measuring results to processing payments on their behalf. |
In a nutshell?
An ASP is an intermediary that connects advertisers who want to promote their products or services with media outlets (publishers and affiliates) that display ads on their own websites, blogs, or social media platforms.
We connect the two parties and provide support for everything from ad delivery to performance tracking.
Since the ASP handles all the tedious administrative tasks—such as payment of commissions and reporting—advertisers and media outlets can each focus on their partnerships and content creation.
Is there a more precise definition?
ASP stands for Affiliate Service Provider. It enters into contracts with both advertisers and media partners and handles a range of tasks on their behalf, including providing advertising campaigns, matching them with publishers, tracking clicks and conversions, and paying commissions based on performance.
One of its key features is that advertisers can place ads more efficiently than if they were to negotiate directly with individual media outlets.
Advertisers and media partners can each measure and analyze ad performance—such as the number of clicks and conversions—through their respective management dashboards.
Why was this term coined?
With the rise of affiliate advertising, ASPs emerged as specialized service providers that efficiently connect advertisers and media outlets.
What is the etymology and the story behind the name?
ASP is an acronym for Affiliate Service Provider.
Around 1999, when affiliate marketing first appeared in Japan, it was sometimes referred to as “affiliate ASP” to avoid confusion with “Application Service Provider,” which shares the same abbreviation.
Nowadays, “ASP” is the commonly used term for an affiliate service provider.
What is the historical background?
The Amazon Associates Program, launched by Amazon.com in the United States in 1996, is considered the pioneer of affiliate marketing.
That same year, LinkShare in the United States became the world’s first ASP to begin operations, establishing the model of a specialized business that acts as an intermediary between advertisers and media outlets.
The business model of intermediary service providers continued to expand, and LinkShare grew to become the world’s largest ASP.
When did it become widely used?
In Japan, ValueCommerce launched its ASP service in 1999, and in 2000, A8.net was launched and grew to become the country’s largest provider.
Since then, the number of ASPs has continued to grow, and the market has been expanding.
According to Yano Research Institute, the domestic affiliate marketing market is projected to reach approximately 411.6 billion yen in fiscal year 2023 and approximately 586.2 billion yen in fiscal year 2027.
Let’s Understand This Through a Concrete Example
ASP helps both advertisers and media outlets streamline their transactions and improve quality.
In what situations is it used?
Without using an ASP, advertisers must negotiate directly with individual media outlets and manage ad placements and payments on a case-by-case basis.
By using an ASP, you can place ads across a network comprising numerous media outlets all at once, and leave the measurement of results, reporting, and payment of commissions to the ASP.
Media outlets can also choose which ads to run from a variety of advertising opportunities.
What is the difference between Open ASP and Closed ASP?
| Category | Open ASP | Closed ASP |
|---|---|---|
| Registration | Anyone can register (including beginner media outlets) | Invitation-only and by application |
| Number of media outlets | Numerous and Diverse | Carefully Selected, Limited Quantity |
| Quality | There is some variation | High Quality and Specialized Expertise |
| Intended Uses | Large-scale distribution to reach a wide audience | High-Value, Niche Initiatives |
| Points to Note | A partner must be selected | Limited reach |
What are some typical examples in the industry?
The following are some of Japan’s leading ASPs.
- A8.net (considered the largest)
- ValueCommerce (one of Japan’s earliest ASPs)
- LinkShare
- AccessTrade
There are two types of ASPs: the “Open” type, which anyone can join, and the “Closed” type, which operates on an invitation-only basis and works exclusively with carefully selected media outlets. You can choose the one that best suits your needs.
Since each ASP differs in terms of the types of ads they handle, commission rates, and support systems, it is common to use multiple ASPs simultaneously depending on your objectives.
How is it used at KK?
OPEN, Inc. operates “PRESCO,” a next-generation ASP in the performance-based (affiliate) advertising sector.
PRESCO is an ASP that implements AI and RPA across various processes in affiliate marketing operations. By dividing roles between human judgment and analysis and automated processing, it enables fast and highly accurate ad management.
Our company is striving to redefine the online advertising agency industry through ad automation, and PRESCO is the service at the heart of this effort.
What are some related terms?
To fully understand ASPs, it’s helpful to also familiarize yourself with related terms such as performance-based advertising, advertisers, and media.
What are some terms that are similar but different?
“Affiliate advertising,” as handled by ASPs, is also known as “performance-based advertising,” in which commissions are paid when a conversion occurs.
The billing model differs from that of ads charged based on clicks or impressions (such as guaranteed-click ads and display ads).
Furthermore, although the same abbreviation “ASP” is used, “Application Service Provider” (as used in the context of IT) refers to an entirely different concept.
What are the concepts of “higher” and “lower”?
An ASP is a provider that supports performance-based advertising within the realm of Internet advertising; in that sense, “performance-based advertising” is the overarching concept.
At the sub-level, they are divided into Open ASPs and Closed ASPs based on ease of registration and the nature of the media with which they conduct transactions.
In addition, since a single ASP can only handle a limited number of ads and media outlets, it is common to see network-based transactions in which multiple ASPs partner with one another.
What other terms should we make sure to cover?
To understand how ASPs work, it is important to understand the “advertisers” who place ads, the “media (publishers, affiliates)” that display the ads, the “results (conversions)” that determine whether a commission is earned, and the “tracking” that accurately records those results.
It is the role of the ASP to ensure these relationships.
It’s also important to note that earnings are not finalized at the time they are generated; they are finalized only after approval by the advertiser, and payments are generally made two months later.