Alimama Sells CPA Ads for Taobao Sellers

Written by Tangos on October 31, 2007
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Since Alimama launched in August, it has been quite successful in attracting individual website owners and bloggers to join and place Alimama’s ads on their websites or blogs. Yes, it is always not difficult to find publisher, because they can earn real money from the ads. But how can Alimama find enough advertisers who are willing to sell their ads in this long-tail market.

Alibaba and Taobao, both of them are assets of Alibaba Group, can provide rich potential advertisers pool for Alimama, the question is how to persuade them to try Alimama. Alimama then offers an option of CPA ads for Taobao sellers. The seller will need to pay the commissions to publishers only after a real transaction is happened. The commission ranges from 1.5% to 50% of the price of the goods, the default value set by Alimama is 1.5%. Since most of the payments in Taobao are processed by Alipay, it is not difficult for Alimama and Taobao to track the transactions and ensure the benefits of publishers.

Jack Ma has promised that Taobao, as the largest online C2C platform in China, will remain free of charge at least by 2008, on the other hand, Taobao also continues to explore other kinds of revenue sources.

In May 2006, Taobao has tried to integrate the keyword bidding and pay for performance business model of search engine with Taobao’s platform. It is a very innovative idea for Taobao to generate revenue while keeping the whole platform free of charge. However, due to various reasons, Taobao has to cancel the service in June. Now, the CPA ads on Alimama platform will be another try of Taobao to generate revenue from providing value-added service to its sellers. We will wait to see whether this model will be successful for both Taobao and Alimama.

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One Response to “Alimama Sells CPA Ads for Taobao Sellers”

  1. CER links: Alimama launch, Merkel diversifies from China - China Economic Review on November 21st, 2007 9:56 am

    […] China Web2.0 Review: Alimama Sells CPA Ads for Taobao Sellers - Tangos notes that an earlier attempt to monetize web traffic failed; Alimama’s just-announced official launch will be another test […]

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