Today’s major industry news comes from Russia. The country’s largest and most popular search engine Yandex (which is by far more popular than Google there) is transforming its product-search service Yandex.Market to encompass a Cost-Per-Action (CPA) model.
Until today Yandex.Market was operating solely on Cost-Per-Click (CPC) basis. The new CPA model is already available for trial (via this link). It is open for Russian and Ukrainian stores which have been active on Yandex.Market for at least 3 months, and have a rating of no less than 3 stars. Yandex charges a flat rate 1% commission which is tied to the order value and remains the same regardless of the product/merchant category. The model is expected to roll out fully in November of this year.
I believe this to be an important development for Russia’s affiliate marketing. Yandex.Market currently contains products from over 13,000 online merchants; and is visited by some 17 million visitors a month. Adding the CPA model to the CPC one, they will facilitate merchant education on the very concept of Cost-Per-Action remuneration, which great for the industry.
While some do deem this move to be in direct competition with affiliates (it may be said that Yandex is, essentially, becoming a super affiliate themselves) and/or affiliate networks (by allowing merchants to establish direct CPA relationships with Yandex), I think there are more pros in this than there are cons.
Besides the above-quoted educational element, there are a few other points to emphasize:
1. Yandex will charge 1% commission. This low and comfortable level of CPA payouts coupled with Yandex.Market’s tremendous client base may make the idea of performance-based remuneration appealing to audiences wider than ever before.
2. Participating merchants will have to pay Yandex the 1% on all placed orders. The key difference between this setup and how affiliate networks operate is that while networks encourage merchants to pay higher commissions, they primarily charge them for fulfilled orders only. However, once Yandex’s CPA model sells merchants on the idea of performance marketing, the move from being charged for placed orders vs fulfilled orders shall be a much easier (than selling the idea of CPA marketing from scratch). So, there is benefit to affiliate networks here as well.
3. Yandex.Market focuses on product search. The developments on the market of tangible goods are always exemplary of the real state of e-commerce. Coincidentally
or not, earlier this month, Russia’s product- and data feed-focused affiliate network GdeSlon raised financing from local investment companies Altair Capital and IMI.vc, and a couple of angel investors [source]. Now with Yandex.Market tapping into the CPA opportunity, we are set to see substantial progress on the market of physical goods.
While in my last year’s post on the state of affiliate marketing in Russia I quoted some encouraging numbers (showing how in the past 9 years the Russian affiliate marketing industry has grown 27-fold), the industry has made some very promising steps since then. In my opinion, this latest development with Yandex.Market means that affiliate marketing in Russia is on the verge of going mainstream. I would love to hear your thoughts on it all, which you may post using the “Comments” are below.