Comparison Shopping Engines, like Yahoo and Shopping.com among others, are all starting to adopt a bidding option. They are all finally starting to realize that they can make more money this way because people are willing to pay more for clicks that they know will convert at a certain rate. So although Yahoo will not be offering product level bidding just yet, I would imagine that once they iron out all the kinks with the category level bidding that they will open the bidding to the product level.

Initially I was completely against this, probably because I was so good at optimizing my feeds for natural placement. But after playing around with the bidding functions at all the major shopping engines I am a big fan. The shopping engines are so closed with their ranking algos and no one can really understand them, the same goes with their combination of bidding and ranking algo. So because of the closed and unknown ranking factors with the shopping engines, having a known (bidding) strategy as an option is really nice. For instance I can see, through Google analytics ecommerce tracking, that each visit from say NexTag is worth $12.71. And if my overhead is 70%, this means that I can bid pretty high for clicks and still maintain a profit.

I was really surprised to see Yahoo! showing improvements to their Product Search. Rumor on the street has had it that they have all but completely abandoned investing in improving this segment of their business. And I was JUST thinking to myself the other day, as I noticed a transaction that came from Yahoo Product Search, that I wished they offered product level bidding! Now I just have to wait for them to make it fully available. If you are listening Yahoo!, hurry up!

The Basics

Comparison Shopping Engines work on a CPC (cost-per-click) model. So you submit your products to them in a special format, typically a .csv file in Excel, and they post your products, descriptions, and prices on their site. When a visitor clicks on one of your products they are taken directly to your product page where they can make the purchase. Typically you are listed with many other merchants on the site that are selling the exact same product or very similar. So if you are competing directly with other merchants, selling the same exact product, then typically you will need to provide a cheaper price, higher store ratings (reviews/ratings), cheaper shipping, or be higher up on the page in order to beat the competition. Most CSE allow their visitors to calculate shipping and tax right there in their site so that shoppers can see who truly offers the cheapest price. That is what comparison shopping is all about and that is why people use CSE to shop and compare prices and merchants quickly!

The Meat And Potatoes

Visitors that come to your site via comparison shopping engines will convert at a much higher rate than other visitors. Why? Because the visitor from a CSE is much further down the sales funnel. They have already done their research and due diligence and now they are looking to purchase. The majority of people that find your products via organic rankings or PPC are doing research for a purchase at a later date or an in store purchase. This means HIGHLY targeted traffic that is actually ready to make a PURCHASE!

The other thing that makes CSE a great sales channel is that click costs are fairly low, unless you are selling electronic, but even then the costs are low compared to some of the PPC costs associated with electronics keywords. That means that you as an e-commerce merchant can get targeted traffic at a very fair price. Obviously the higher your average order size is the easier it will be to make a profit but even if your average order is under $100 you can use the CSE as an additional, and very profitable, sales channel. If your average order is under $100 you will need to monitor your results alot closer than you would have to with a higher average order size, but again you can still be profitable.

The Bottom Line

If you sell products online then you need to be using the comparison shopping engines to sell more! Configuring, optimizing, and managing your CSE product data feed(s) can be a daunting and time consuming task. Each engine has their own specs that you need to meet and optimize for, plus each engine allows you to submit feeds at different times. Basically, its alot of work but it can be profitable if managed correctly. There are a number of companies, like Channel Advisor, that offer tools to help you manage CSE data feeds. But they can be very expensive and you still need to do alot of the work. I offer CSE management at a very reasonable rate and with exceptional results backed up by analytics that spell it all out for you. The comparison shopping engines are a fairly untapped resource for e-commerce merchants. Either way that you decide to go about it, run it your self, hire and independent consultant, or hire a firm, you can increase you sales significantly by submitting your products to the CSE.

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