comparison shopping engines study: goals, recommendations & opportunities to boost revenues by...

Product ComparisonShopping Engines Study

Goals, recommendations & opportunities to boost revenues by 16%

Product Comparison Shopping Engines StudyGoals, recommendations & opportunities to boost revenues by 16%

Slide 2/16June 2009

Matthieu Dejardinshttp://dejardins.com

Presentation Overview

1 Why shopping engines?

2 Who are the Comparison sites users?

3 Shopping engines challenges

4 Pre-launch checklist

5 What does it takes?

6 Top 10 Data Feed Optimization Tips

7 Vertical Segment for search engines

8 Which CSE?

9 Amazon & bing.com opportunities

10 Which results to expect?

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Slide 3/16June 2009


Why shopping engines?Reasons1.Get products in front of browsing consumers

during the exploratory phase - before purchasingbecomes intentional.

2.Effectively present a unique value proposition (brand identity) to shoppers exploring buying options.3.Ensure consumers see your products

on every available channel includingmarketplaces, search and CSE.

ResultsCan account for up to 20% of revenue.

Tons of trafficYahoo! Shopping & Shopzilla = 20M UVShopping.com, Google Product Search = 10M UVNexTag, PriceGrabber, and Become = 5M UV

Source: Comscore Mediametrix – May 2008


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Who are the Comparison sites users?• They are savvy, trusting buyers. Search engines and CSE users differ from the average consumer in behavior, spending more time online, sending and receiving more emails. These consumers trust their sources – both peer-generated content and commercial messages – more and are less price-sensitive.

• They research complex products. Hardly any consumers used search engines or CSE as information sources for simple products like cosmetics - they just went to the store for those. The heavy traffic on these sites comes from consumers researching complex products like mobile phones, audio equipment, etc. Adding up the info sources, it is clear that consumers use multiple sources to research complex products.

• Sold by either retailers or manufacturer. Search Engines & CSE will attract nearly as many as US consumers looking for mobile phones as Motorola.com or Verizon.com. Source: Forrester Research - Forrester’s ECTAS Q2 2006 Media,

Marketing, and Retail Survey - March 2007


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Shopping engines challengesAccording to Econsultancy.com Comparison Shopping Engines Survey, there is no single issue which stands out clearly as the biggest barrier to effective use of this channel:

1.RESOURCE - lack of time to experiment is most likely to be seen as a major obstacle, deemed as a top-three issue by 30% of retailers.2.TECHNICAL - significant numbers of respondents still report experimenting difficulty keeping feeds updated (28%).3.TECHNICAL - the third of these issues as one of their biggest problems is the difficulty of adapting the feeds for different engines (27%).

The majority of retailers (56%) prefer to pay CSEs through a CPA (cost per acquisition/action) model. Only 17% say they prefer to pay by the method most widely offered by CSEs, i.e. on a cost per click (CPC) basis.

Retailers spend approximately 11%of their online marketing budget onCSE. Agencies said that, on average,their clients spend 14% of onlinebudget on this channel. Source: Econsultancy.com - Comparison Shopping Engines Survey Report - Sept 2008


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Pre-launch checklist

Stand alone website

Experience with SEO/PPC

Quality website that converts

Analytics program

Ability to download and

manipulate your catalog

SingleFeedChannel AdvisorChannel Intelligence


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What does it takes?1. Sign up for Shopping Engine & fund account

2. Build a data feed

3. Format data feed for Shopping Engine (cf. mandatory fields)

4. Categorize your products according to specific shopping engine taxonomy

5. Upload feed to shopping engine

6. Fix Errors/Re-map

7. Re-upload to shopping engine

8. Confirm product listings went live

9. Re-submit data feed every day

10. Track performance

11. Optimize data feed


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Top 10 Data Feed Optimization Tips1. Formatting/mapping

2. Go live and stay live

3. Add as much data as possible

4. Unique titles & descriptions

5. Proper categorization: to extend/reduce product exposure vs. ad spend goals

6. Keywords: identify “fuzzy matches” and then add them as negative keywords

7. Reviews: evaluation process and identify underperformers (report by clicks or costs)

8. Bidding: if you are consistently bidding above the category minimum, try to identify gaps where paying more than competition. Test reducing bids to determine impact.

9. Price: main criteria for product filtering

10. SKU suppression


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Vertical Segment for search engines Comparison Shopping space is just a way to attract merchants and offer them additional services such as Search, Contextual, Content, and Display ads. In fact, most of the Search Engines offer a vertical service:

Google is taking ecommerce seriously by moving around product search results (from Google Product Base). They also implemented last month a new interesting tool called Google Squared by extracts data from Web pages and presents them in search results as squares in an online spreadsheet.

After a successful and leading business model at the beginning of the 2000 years with Yahoo Store solution, Yahoo! Shopping adventure was unfortunate with CSE (Kelkoo sold in Nov 2008) but kept a leading market share by offering a suite of merchant solutions: Yahoo! Ecommerce, Yahoo! Shortcuts, Yahoo Web Analytics, etc.

Microsoft acquired Ciao.com (Greenfiled Online) for $486M – Aug 2008 in Europe and launched CashBack Search Engine in US on May 2008 (based on Jellyfish, purchased in Oct 2007). Microsoft/MSN/Live has no fewer than 3-4 CSEs now and they seem to be combining them into one platform bing.com.

AOL is rolling out their own CSE (used to be Pricegrabber partnership).


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Which CSE?

Source: Nielsen Mega View Search (April 2009)Source: Comscore (April 2009)

In the US, 25% of internet audience (50 millions) passes through a shopping engine. Close to 75 % of traffic goes to the TOP 7 websites.

According CPC Strategy LLC, a full service comparison shopping management agency, among Internet Retailer's Top 500, Google Product Search leads in market penetration with 72.2%. Shopping.com and Pricegrabber follow with rates of 53.8% and 50.6% respectively with Microsoft's snagging 30.2% of the top 500 market.




Which CSE?US Top 5 list considered according all sources of information 1. Yahoo! Shopping2. Shopzilla / Bizrate3. Shopping.com4. Nextag5. Google Product Search




Amazon & bing.com opportunities

To drive traffic, we should use our XML feed for:1.Amazon.com – According to Channel Advisor, 93% of online shoppers are Amazon buyers; 80% of these buyers also use Amazon as their most trusted product research destination There are 2 ways for your products:a)Marketplace: merchants list products with final checkout by Amazon (CPA: $0.99 + 6% sales net)b)Product Ads: merchants list products on Amazon and drive consumers back to their sites as opposed to having to buy through Amazon (CPC: $0.7 – daily budget).

2.Bing Shopping - allowing advertisers to sell on a cost-per-acquisition (CPA) basis and Cashback offers. Direct customers are rewarded by having a % amount of cash on every

transaction & Microsoft is also keeping a fee on these sale. See example below with AT&T (35%), eBay/Paypal (8%), TigerDirect (7.3%), HP (3%), etc.




Which results to expect?According to the Q12009 study from CPC Strategy LLC, the “big 5″ primary traffic drivers to merchants’ sites were Shopzilla.com, Nextag.com, Shopping.com, Pricegrabber.com, & Google Product Seach.

There’s a strong correlation between the average revenue generated by each engine and the traffic that was brought in. It is explained by the fact that more traffic in theory should lead to more conversions.

It is interesting to notice that in the study Nextag pulls ahead of the pack due to their strong abilities to drive quality traffic to merchants’ sites - but each engine has the ability to drive a decent amount of revenue to each site.

Source: CPCstrategy.com – The top 10 CSE compared - May 2009




Which results to expect?The Cost Of Sales (spend/revenue), ROI for every dollar spent, is demonstrating that Google Base (free) is in top position followed by Microsoft’s Cashback slightly behind with the revenue sharing percentage (5-10% is a good range to generate sales & keep costs low but enough to create incentive to buy).

For many merchants this is the most important metric in a campaign as they generally seek to maximize the return on their spend.

Regarding Average PPC costs, Google Base and Microsoft’s Cashback top the list since their traffic is essentially “free” (you pay a fee per transaction with Cashback), while Become and Smarter, being two of the smaller shopping engines they have lower rates in order to allow them to compete with the larger engines.

Source: CPCstrategy.com – The top 10 CSE compared - May 2009




Conclusion & recommendations

1.Shopping engine experts?2.Relationships with CSE?3.Focus?4.Annual contracts?5.Hidden fees?6.Google Product Search Partner?7.Categorization?8.Up and running, Validation/Correction?9. Budget?

Source: The State of Retailing Online 2009 - Shop.org study conducted by Forrester Research - 2009

Because of the decreasing effectiveness of search, large retailers look to other efforts such as shopping comparison engines, affiliate marketing, social media and online banners to engage as many new customers as possible.



Questions?

comparison shopping engines study: goals, recommendations & opportunities to boost revenues by...

Technology

search engines cse

product search results

google product search

different engines

yahoo shopping adventure

shopping engine fund

complex products

cse users