Comparison Shopping Engine Strategies

The Color of Money

Red beats blue.  Green beats light blue.  But light blue beats red and green. 

What?!

Marketing Sherpa wrote up a useful piece on office label maker Dymo and their efforts to study button characteristics and how they drive conversions.

While highly specific to Dymo's site, you can use their approach to conduct experiments for color, text narrative and button size.

If you knew that simply changing the color of a button increased conversions by 4 percent, would you do it?  Please say yes, or I'll worry about you.

Some lovely bits:

Amazingly, a larger 'Proceed to Checkout' button lifted conversions 44.11% over the existing 'Add to Cart' one. Of course, the design team scrambled to make the permanent switch. On the cross-sell page test, the words 'Proceed to Cart' beat 'Add to Cart' by 21.8% -- and, therefore, replaced it across the site.

With the cross-sell page, they were pleasantly surprised to see that expediting the shopping experience by removing the cross-sell step actually reduced conversions by 15%. "That finding doesn't exactly fit all of the prevailing school of thought on the huge importance of speed either," Klazema says.

Use this for your site. 

If you're a merchant -- especially if you're in the SMB range -- you really need to look at this.  It's relatively simple to track these sorts of things and if you're not doing it, then you're not going to understand how your customers react to your site.

Written by Scott Hurff -- scott.hurff at channeladvisor (dot com).

NearbyNow: sign of a new CSE trend?

Just stumbled across NearbyNow, a shopping search engine for local retail outlets.  The point is this: NearbyNow aims to help you figure out if a local store has something you want in stock. 

While the offering is currently limited (only one shopping center in NC...we're not THAT rural), I do believe that this will become part of mainstream CSEs and not a standalone product.

I don't think I'm jumping to conclusions when I say that online browsing has a significant impact on offline in-store sales.  ComScore came to this conclusion about a year ago, when it found in a study that about 60 percent of online searches converted into an offline sale.

Look at Circuit City, for example.  They were one of the big-box early-adopters that realized this phenomenon and executed.  The "it's ready in 24 minutes or you get a $24 gift card" campaign is testament to this.

Anyway, I think it will be good going for the company who can figure out the framework for connecting the on- and off-line worlds -- for everyone from the big to the little boys.

New widget foursome for TheFind

Siva Kumar from TheFind tipped me off that they're releasing four new widgets aimed at bloggers.  The official announcement will come at the BlogHer conference, which starts tomorrow in Chicago (which I think is a useful strategy since most of TheFind's users are women).

It's a path to monetizing one's blog; TheFind splits the ad revenue generated from traffic you send to the product search engine's  property.  The idea is that a writer uses TheFind's widget to link directly to products you discuss.

The widgets come in four flavors: Shoplinks, Search, FindIt and Marketplace.

• Shoplinks: a simple way to drive qualified traffic to products you mention in a blog post or are in a picture you display related to the content.  So, if someone really likes the shirt that Lindsay Lohan is wearing in jail, you can link to that product at the end of your blog post.
  
• Search: puts a search box on      your site that queries TheFind's product index.  Pretty straightforward and more like a typical widget.
• FindIt: a quick way to embed a link that searches for particular products.
  
• Marketplace: envision a highly-specific mini-CSE you can add to your site.  Specify the product mix to match your site.  A clickthrough takes a user to a branded version of TheFind, with a custom border at the top of ever product search results page.

Widgets are installed using an automated tool called Widget Mill, which will add the widgets to your blog. It's got built-in modules that plug into Wordpress, Typepad and other blogging platforms.  For unsupported platforms, TheFind will supply code snippets that can be added to page templates.

To my knowledge, most of TheFind's revenue comes from CPM-based ads.  That means that for a blog to make some serious cash from using these widgets it will have to send a great deal of traffic to TheFind.

Shoplinks and Marketplace are probably some of the most useful and thoughtful widgets in the e-commerce space right now.

Email Scott Hurff at scott.hurff AT channeladvisor.

 

Scripps Interactive Group revenue down 10%

EW Scripps posted Q2 earnings and the results for Shopzilla (and uSwitch) are anything but overwhelming.

Almost down 10%, Scripps' interactive unit generated $59mm in revenue vs. $65mm during Q2 2006.  Profit for the division declined about 60% to $6.8mm from $16.5mm a year ago.

The Scripps press release reveals what could be a squeeze on the PPC advertising side.   "The competition for bidding on keywords in the search engine marketplace continued to be vigorous, having a direct impact on Shopzilla's results."

Some bits from the conference call:

• online comparison shopping business isn't as smooth growing as we'd like -- an untested marketplace; growing pains evident
• gets increasingly difficult to sustain double-digit growth as we  near a billion in revenue
• common thread connecting businesses is getting in front of trends in media marketplace
• internet advertising accounting for expanding share of newspaper revenues
• Shopzilla growing by "leaps and bounds in france, UK..."
• soundness of our strategy is evident by returns we've delivered
• Q2: results are "mixed"
• working through issues in other business segments, including lower referral fee revenue in comparison shopping biz in US, UK
• broad strategy: move online businesses beyond just extensions of network and create communities online
• referral fee revenue lower; due to changing market conditions
• sharp decline in natural gas prices = lower revenue  for switching (uSwitch), but more than double revenue a year ago; leading CSE for utilities in UK
• shopzilla: focusing on improving online search / CSE experience; comScore led in May, June for unique visitors
• shopzilla: competition for KWs resulted in "modestly lower" referral fee revenue -- deploying new KW marketing methods (didn't specify)
• strong revenue growth in European markets for shopzilla

Q&A Session:
Morgan Stanley -- on interactive, Joe, can you give color on rev trends; how should we think about seasonality -- $30-$40mm seems aggressive for year

Rich: the biz is obviously backloaded and we're in slowest period of year right now.  At this point we still feel good about guidance, relative to last year.

Shopzilla has been picking up and accelerating. 

Joe: (read the release!) 

Is Shopzilla expected to see rev growth in Q4?  Yes.

===

Fred from JP Morgan -- how do we think of margin contribution from the interactive side?  What are your thoughts on bringing uSwitch to the US?

Joe: interactive, on a top-line basis, is 6% of ad revenue -- goal to grow over time to be more material.  Will be nearing $100mm mark on interactive revenue on a $900mm ad revenue goal.  25-35% growth depending on Q going fwd.  Becoming material includes pulling in Yahoo! talent (increasing UGC, social networks, growing user-centric business around core brands as we extend connection to linear networks).  Working on exciting ideas to grow interactive biz.  Grow by acquisition, as well. 

Rich: uSwitch & Shopzilla -- Shopzilla is expanding across Europe and numbers are very good over there.  uSwitch categories outside of core energy are weak, but very focused on a strong European market with both Shopzilla and uSwitch.

===

John Janedis from Wachovia -- mentioned challenges in interactive biz for a while now -- are you expecting any kind of moderation as it relates to KW competition bidding and is European mkt much different from US in terms of KWs?

Rich: don't think there will be any moderation for competition in PPC; doing an excellent job of driving paid and free traffic. If you look at Shopzilla's numbers in May/June  you see that.  PPC will continue to be competitive.  Problem is driving the revenue to make up for costs.

European market more free traffic; drive more traffic through traditional means.  Search engine marketing hasn't hit there as big yet.

Free traffic: strong when compared to paid side.

===

Next up:  are rising PPC costs real -- and are they affecting earnings elsewhere?
If you've got any insight / thoughts on this, email me at scott.hurff AT channeladvisor

The Double-Guarantee

If someone told you that 25 percent of all products sold from your Web site were returned, would you be happy?

For Zappos, that answer is yes.

I found this NPR article that has a quick-tip takeaway: if it makes sense for your business, encourage contrarian behavior that creates a larger amount of comfort. 

For Zappos, that means encouraging returns with free shipping.  NPR says this has helped Zappos grow by 6x from $100MM to $600MM a year.

"Some of our best customers are people who return a lot of shoes," said Craig Adkins, vice president of operations at Shepherdsville, Ky.-based Zappos.com.

Written by Scott Hurff.  scott.hurff at channeladvisor

Ask the Feed Doctor: Anthony Alford

Remember those cool little "Easter Eggs" you used to find in games like SimCity 2000 that you had to hear about from the game's developers?

Anthony Alford, one of the developers of ShoppingAdvisor over at CA, has been helping people business rule-ize their feeds for years.  Now he's launched a series over at the CA Blog called "Ask the Feed Doctor."

Go get your dose of feed clean-ness.

ValueClick gets Smarter!

Congrats to fellow Overture/Goto.com alumnus Talm and Harry over at MeziMedia.  Mezi runs a variety of ecommerce/shopping sites including smarter.com.  Today it was announced that ValueClick is going to acquire Mezi for up to $352m (looks like $100m now and another $252 based on EBITDA performance)!! The press release cites three strategic areas that ValueClick plans to leverage three areas:

• MeziMedia will add scale to ValueClick’s fast-growing Comparison Shopping segment and give the Company a leadership position in the U.S. comparison shopping market. ValueClick currently is a major comparison shopping provider in Europe under the PriceRunner brand.

• MeziMedia will enhance ValueClick’s search engine optimization (SEO) and search engine marketing (SEM) capabilities. MeziMedia has a sophisticated, proprietary SEM platform and significant expertise and experience in SEO and SEM, which can be leveraged across ValueClick’s businesses and clients.

• MeziMedia will give ValueClick a formal presence in China. MeziMedia has a worldclass
engineering and operations center in Shanghai and has also launched websites in China for comparison shopping, coupons and search.

As a fellow entrepreneur it's amazing that H+T were able to build this from $0 without taking any venture capital.  The news report says that Mezi's revenues were $40m and the company was very profitable.

With NextTag off the market, Mezi sold and TheFind raising a big round, it bets the question, what's next?!

Amazon building "Product Ads:" ditching 3rd party networks?

From a job posting on Craigslist SF and a yanked job posting on Dice comes evidence that Amazon is looking to spruce up their ad program.

Called Product Ads, the postings describe the product as

a new cost-per-click advertising channel on the Amazon.com website

that

combines elements of Amazon.com's Merchants@ offer listing business and A9's advertising cost-per-click tracking system to allow merchants to create product ads, thereby increasing selection on the Amazon.com site and monetizing that selection.  Ultimately, Product Ads will allow merchants to upload listings using simple feed formats common in the industry.  The buying experience will vary for Product Ads depending on whether or not an Amazon or merchant offer exists.  Customers can choose to purchase from Amazon or a merchant, or they may click on a link to an external website and shop there.

This looks like it ties into the existing Clickriver closed beta, which has existed since around November 2006.  The program to date has sought to appeal itself to service providers and "retailers who want to         advertise products that complement those sold on Amazon.com."  Note that it didn't say existing retailers on Amazon. 

The Clickriver site actually encourages retailers who want to promo their wares to sell, not advertise, on the site.

Ads are currently displayed underneath search results and is one path for Amazon to monetize those pages.

A product vision
So what could Amazon be cooking up, exactly?  One prediction is a seamless advertising program integrated with Amazon seller tools, complete with tracking tools, bid management, budget management, ad creative creation and distribution targeting. 

Amazon already wields power with their recommendation system.  I've heard stories where a new book is released and paired up with an older book on the same topic -- this simple act having the power to revive flat or close to non-existent sales for the older work.

The company knows how to channel traffic and does extensive testing on the site -- Product Ads may be an introduction to merchants being able to tap into that knowledge and  have some more power to promote their products to the 52 million domestic visitors per month.

This is solely for the flagship property, though.  Amazon also owns IMDb, dpreview, Alexa, and more -- imagine, from the perspective of a merchant,  being able to target these properties with ads. 

You'd be sending highly relevant traffic back to specific products, which could, in turn, drastically increase conversions.

Good for Amazon, good for the merchant, good for everyone.

I imagine that the stats tracking on this could be very powerful -- product-per-product basis, with cost / revenue, impressions / CTR, reach, clicks onto other products, tracking flow from ad clickthrough to final product buy -- to understand what drew the person in and compare that vs. what they actually bought.

Hmm...I'm still digesting this.  Let's get some feedback from the crowd here. 

Written by Scott Hurff; scott.hurff at channeladvisor (that's dot com).

$15MM Series C Injection for TheFind to be announced Thursday

170 million products.

500,000 stores indexed.

TheFind has a strong lead as a lifestyle goods product search engine, now boasting 70,000 to 80,000 uniques a day

You may remember that TheFind recently announced a deal with PayPal to power product search for exclusively PayPal stores.

We spoke with Siva today and he said that TF will continue this trend and gain distribution / traffic through similar partnerships in the future. 

He also said one of the key focuses with the new funding will be to improve their search technology -- which already has a strong lead -- and continue to add products from across the Web.  The relevance of TheFind's search engine is probably the most advanced amongst CSEs today, uncovering hard-to-find products like lingerie (thanks to our friend Matt Marshall over at VentureBeat for the example).

Lots of shopping sites are attempting to widgetize / go social, but Siva also mentioned that their core focus is search -- the rest will come later.

 

The investment, to be announced Thursday, was led by Bain Capital Ventures, a firm who  has a track record of investing in the online shopping space.  You may remember that they were an investor in Shopping.com and also have strong connections to large retailers.  This will surely give the CSE an advantage in scoring some key partnerships.

What does this mean for merchants?  TheFind isn't going away anytime soon, it's becoming more visible every day, and it'll be a good place to reach women since they comprise 70 percent of all unique visitors to the site.

Furthermore, since the company doesn't accept payments for merchants to show up in results, there's practically no downside -- and potentially lots of upside -- for being found on...TheFind.

Written by Scott Hurff.  scott.hurff AT channeladvisor (that's dot com).

Smack Shopping in the Washington Post and more Jellyfishness

To continue the string of Jellyfish coverage, the Washington Post profiled Jellyfish in a Sunday "Buzzworthy" feature that described how Jellyfish works and how they started out.

This is the first time that Jellyfish has been covered in the Post (but certainly not the first time it's been covered in major newspapers).

It's a glowing profile and reveals a few tidbits:

• The average site discount is 45 percent off.
• It takes within 60 days to get your cash back discount.
• Flocks of rubber chickens sell faster than iPods and go for 30 percent off. (Stay on the lookout!)

Smack Shopping has become the clear differentiator for Jellyfish, which is being leveraged not only for press but to draw shoppers into the site.

It's a bigger attraction than Jellyfish's original cash-back model -- which is a differentiator in and of itself -- but it's harder to have faith in something you can't see.  The point is that Smack shows REAL PEOPLE getting REAL DISCOUNTS in REAL TIME  as opposed to buying something on your own and hoping that the money comes through.

Plus, it's just more fun competing against the clock and other people.

Jellyfish also just changed Smack to drop the actual price, not just the cash back percentage -- as well as expanding Smack to occur around the clock from midnight to 10 p.m.

I think that Smack should continue to be leveraged as a key differentiator for Jellyfish, but it's become overwhelming with the around-the-clock model.  Simplicity is key for something like this and the once-daily SmackDaddy show was a great pivot point -- now I wonder how the traffic is fanning out.  Or this could be just one big experiment.

Written by Scott Hurff.  scott.hurff at channeladvisor (that's dot com).