ChannelAdvisor

CSE Marketing in a Tough Economic Climate

In case you haven't heard, the economy is having a bad hair day. Because of declining consumer spending, all marketing initiatives are being evaluated at many retailers. It's a sad fact, but marketing on comparison shopping engines can be labor intensive and depending on several factors, expensive. There seems to be a trend of online retailers reacting to these conditions by slashing budgets and in some cases, pulling feeds down completely. While decreasing budgets may be necessary, for most retailers, eliminating the program completely is not the best way forward.

Below are thoughts on what retailers should keep in mind when considering the future of their CSE campaigns. Though there may be other issues facing retailers right now, such as challenges surrounding credit, product sourcing, etc., these comments are intended to be independent of such complexities.

• Give credit where credit is due: I sometimes hear merchants say "my CSE program isn't working," when the reality is usually "only part of my CSE program is working." Most retailers currently operating on CSEs have some subset of products that are selling consistently. Our experience is that the many products that repeatedly sell on CSEs are very efficient and usually profitable. Even if the total campaign is not achieving your goal, some products probably are. If a Google AdWords program was operating below goal, I doubt many merchants would completely shut it off. They would lower bids and probably remove certain campaigns, adgroups or keywords that are not performing. CSE is no different in this sense. Recognize successes within the campaign and keep them going. It's an extreme step, but if your business is in crisis mode, removing all products except for this subset of consistent sellers can result in much lower costs while retaining some profitable revenue.
• Rebuild slowly: If you do take this sort of action, you will probably find that the products that are working are a small piece of your overall product set, which makes it likely that the cost incurred by those items is also a very small part of the total cost of the campaign. Recall from past discussions about the long tail of CSE feeds that in most cases, the majority of cost comes from activity on items that drive no revenue. This means your newly slimmed down CSE campaign may be over-efficient. This is what we often see when we take this approach of cutting out the long tail completely because the majority of the risk and uncertainty is removed. If this is the case, it may be best for your business to take that extra efficiency to help offset some other channel, but many retailers will be able to reinvest in CSE. Do this by re-introducing products/categories into your feeds to try to get the maximum revenue while still operating within the construct of their financial model. The best way to do this is to start slowly and watch to see how the reintroduced products/categories perform.
• Focus on your strengths: Regardless of economic conditions, most consumers will continue to shop based on value. Price sensitivity will certainly increase, but issues of quality and trust never completely vanish. Therefore, when choosing products/categories for reintroduction into your feeds, it is best to be realistic about your value proposition and how you measure up to your competition. You wouldn't be in business if you didn't do something right, so focus on including only products or categories where your value is strong.
• Maximize CSE feature use: Having a strong value proposition is key, but it is not beneficial unless it is clearly communicated. Many CSE marketers overlook the basics, such as completing the CSE merchant account interfaces with accurate payment types and customer service info. These elements can impact your rank and conversion rate. In addition, user reviews become even more important as consumers are less convenience-oriented and more value-oriented, so be sure to participate in these programs whenever possible. Display of shipping costs, tax info, promotional messages and coupon details should be maximized as well. Your goal should be to convey your value to the consumer as clearly as possible before any clicks are made. Providing as much information as you can will help protect, if not increase, your conversion rates and ensure your competition isn't winning for the wrong reasons.
• Understand the long term impact of your actions: I can't emphasize this one enough. What you do today on CSEs has a direct impact on your future ability to drive CSE revenue. Many CSEs have some sort of popularity function that is based on historical activity. This means that if you take your products down for a few weeks or months, getting back to where you were is very difficult, as if you were starting over from scratch. In addition, most CSE review programs require recent feedback in order to display those rating on their site. If you already have a positive merchant rating, keeping your campaign live is the only way to protect it. The bottom line is that if you pull your best products down today, you are seriously risking that revenue stream not just for the time those products are down, but for much longer.

If anyone has specific challenges, please share them and I will do my best to help.

CSE Wishlist - Part 4

This is one that my team and I have been been dreaming about for some time now.

Availability of impressions/CTR data.

Click-through rate (CTR), defined as clicks divided by impressions, is a key metric in the search engine marketing world as well as display adverstising. CSE marketers do not, in most cases, have the ability to analyze this metric since none of the major CSEs provided impression/CTR data in the reporting interfaces. The only CSE I can think of that does make this information available is Smarter.com.

Reasons this would be valuable, much as in the SEM world, include:

• Identfying issues with specific offers: If CTR is low, the offer is not compelling and needs to be evaluated and tested with improvements. This is very valuable information and is alone enough to make this data desirable.
• Helping to track the impact of changes: Obviously traffic alone is a valuable metric for determining the effects of changes made to titles, promos, pricing, etc, but impressions and CTR are helpful metrics as well.
• Understanding the size of the CSE opportunity: This is a common question we hear from merchants and it is difficult to answer. Knowing how many page views a merchant's offers receive would provide additional insight into the level of interest on each engine.
• Providing insight into market share: This is another question we hear a lot. CTR isn't really a market share metric (if CSEs want to publish actual share of traffic, that would be great, too, but that seems unlikely), but it does help give some idea. Also, if a merchant's offer is visible on a product page next to their competitors, knowing the ratio of CTR to number of competitors could be very interesting. Not every impression yields a click so this wouldn't be a bulletproof metric but something worth tracking.
• Measuring performance of rank: Some CSEs support bidding at the category and/or product level. Not surprisingly, those that support it also recommend it. These engines state that offers ranked first get more traffic, which is often true. However, in moving from rank 3 to rank 1, if traffic increases 10% for that offer, it may be due to an increase in impressions to the product page and not just increased traffic yielded by the change in rank. Providing impression data at the offer level would help these CSEs make their case for bidding up, and provide the merchant with better information on which to base their bidding strategy.

There is one significant downside for CSEs if they were to make this data available, however. As our friend JP at Downtown Ecommerce Parnters argued many moons ago in his guest post on comparisonengines.com, omitting this data helps to keep merchants guessing. It's no secret that much of the traffic delivered to CSEs is acquired and not direct, so hiding these impression numbers help mask the details around traffic fluctuations that are at least partially a result of CSEs own marketing/merchandising activities for their properties, as well as the similar efforts of their affiliate partner sites.

For now, we expect to keep dreaming.

CSE Wishlist - Part 3

This is one that I think CSEs should want to embrace because it is all about communication between the merchants and the consumer.

More/better ways to demonstrate value proposition.

There are already elements in existence that help merchants communicate their value proposition, such as promo text, ratings, logos, and obviously the price of the offer itself. However, many possibilities for improvement remain. These are the ones at the top of my mind:

• Real time promotion messaging: The timing around the display of promotional text is painful. Short promos such as one-day sales are pretty much impossible to get right through the feed. Entering such information through the merchant UI with controls over timing, or timing controls in the feed, would allow merchants to be more confident in presenting short term promotions on CSEs.
• Real time price changes: Same as above for pricing. Some merchants have one hour or two hour price drops that can drive a lot of sales but it's impossible to promote such offers on most CSEs right now. (PriceGrabber already allows this one in the merchant interface under "Click-Thrus by Product")
• Warranty and service options: Merchants could put this sort of information in promo text, but it's not as attractive and would be replaced if they had any real promotions going on. There is value to these options, though, especially on certain product types, so some default indication should be made visible as opposed to just burying the information in the description.
• Configuration/Customization messaging: Obviously this can be included in titles, descriptions, and promo text but it's still hard to get the message to consumers, especially when it applies to all of one's products. For this point and the previous one, a possible method to convey this information would be something akin to the gift icon on eBay (but free).

If anyone else has specific ideas, I'd love to hear about them.

CSE Wishlist - Part 2

As I mentioned in my last post, a major theme in this series is that of control for the merchants. Here is another CSE wishlist item in that vein:

More insight and control over affiliate partner sites.

For those who don't know, some CSEs get a LOT of the traffic for which they charge merchants from affiliate partner sites. For example, PriceGrabber's comparison shopping data is used on CNET and AOL Shopping. Shopping.com has hundreds of partners, and offers both a full API or widgets for the less savvy. There are many more examples, enough to make one's head spin, but that is not the focus here.

As a merchant, it is difficult to know what percent of traffic is coming from these partner sites and whether that traffic is converting. The traffic spikes I mentioned in my last post sometimes blindside not only the merchant but the CSEs themselves because they are the product of promotions run by these partner sites.

Shopping.com has taken a step in the right direction by introducing their Value Based Pricing program, which is intended to offset the lower return delivered by some of these partner sites. The system basically lowers the CPC charged for clicks originating from sites that yield lower conversion rates. Kudos to the SDC team for this innovation, but to the merchant, it is still a black box. Merchants would prefer to be at the helm rather than be reassured that something is being done about it.

I think it is fair to include new merchants in the entire network, but allow them to opt out on the partner level. This is not just a way for merchants to control conversion, but also cut back on spend in lieu of the additional budget controls discussed last time.

I am trying to be realistic about these requests, so it may be more likely that CSEs publish a list of partner sites or maybe report how much traffic comes from the network. Regardless of the details I think any step toward transparency would be welcome, but the ultimate goal should be to allow merchants some level of control.