Comparison Shopping Engine Strategies

Google Experimenting with Additional Product Results

**Clarification - we just heard from a Google spokesperson.  They informed us that the screenshots are actually NOT the Google Products Ads test, the experiment has not started yet.  This is some other experiment.  It will be interesting to see what the official 'Google Product Ads test' looks like.

It's always fun to stumble across a Google test. Phillip Lennsen over at Google Blogoscoped posted today about a new Product Ads feature in the Google Affiliate Network, so this may be part of the testing for that. The screen shot below shows two sets of shopping results on a standard Google SERP for "crocs mammoth." The lower shopping result set is the often seen "one box" area powered by Google Product Search feeds, but the upper set is something we haven't seen before.

The first two links go directly to Shopping.com. The last goes to Campmor but it is a Shopping.com network link. It's hard to know for sure if this is unique to Shopping.com at this time or if more searches would eventually result in content from other sites, but about a dozen queries yielded nothing but Shopping.com links. Some went to Shopping.com product pages while others went directly to the advertiser's site, including Amazon and eBay.

Several things are confusing about this. It's almost as if Google has become part of Shopping.com's partner network, but if this is in fact Product Ads testing, it's possible they just selected Shopping.com as a test partner. Either of these is a little puzzling considering past tensions between Google and eBay (Shopping.com's parent company).  Aside from the fact that Google and eBay historically don't play nice, why would Google insert a second set of product data instead of working to monetize Google Product Search? Maybe they'll replace the one box with this product set? How is this better for users than Google Product Search content? How can merchants optimize a single data feed for both Google Product Search and Google Affiliate Network considering they likely use different algorithms and may be directly competing for SERP real estate?  Curious to say the least.

I'm also not sure what impact this will have on merchant's Shopping.com experience in the short term. If this continues/expands, traffic could ramp up significantly. Google Product Search conversion rates are generally good, so hopefully that would carry over to the direct links to retail sites, but I wonder how users will react to going from Google results (at the very top of the page in some cases) to Shopping.com, and then through to the merchant (or not).

Some of the links we found go to a page where we have a tracked item live so we'll keep an eye out to see if traffic changes significantly for those items.

Some other screen shots (a little grainy unfortunately):

Ciao US Goes the Way of MSN Shopping

Microsoft announced today that Ciao in the US will cease to exist as of July 1. Feeds will no longer be processed and the Ciao.com domain will redirect to Bing Shopping.

This pretty much ties up to the MSN consolidation in the US. Ciao will no doubt continue to exist in Europe. The real question is if and how they will more formally integrate Ciao with Bing in Europe. Right now it just redirects from Bing to Ciao, which is a little confusing from the user perspective, but maintains the SEO advantage of the already popular sites and leaves intact the social aspect of Ciao as well. I imagine the Ciao US social network never grew significantly, but the European network is probably pretty substantial, so Microsoft won't want to lose that aspect. We often see for sites with more of a social focus such as Ciao that the unique visitor numbers, and therefore impressions, are significantly raised, even if click-throughs to merchants are relatively lower. This suggests a higher revenue opportunity from display advertising, which makes one wonder why display ads on Ciao are scarce.

Google Product Search Announcement About Attribute Changes

 Google announced today that the condition attribute will soon be required. Valid values are new, used, or refurbished. This is definitely good news in that it suggests they will soon either display this information or filter on it. Such a change would positively impact the user experience on Google Product Search since right now, consumers don't know the condition of the item until after they click through. I've bought many refurbished items in the past, but as a consumer, it is definitely nice to be able to clearly see condition as early as possible so you don't click on a refurbished or used item when you definitely want new.

In addition to their blog post, Google emailed merchants today with the condition attribute news,  a recommendation to use their most recent taxonomy in the product type attribute, and announcement of a new attribute, "compatible_with." This new attribute is specifically targeted at merchants in accessory categories such as ink cartridges or cell phone accessories to give them a structured way in which to communicate the core product models with which their items are compatible.

Full email below:

Hello,

We'd like to let you know about an important change we're making to the Product Search data feed requirements. As you know, you can help shoppers find your products by including high quality, frequently updated product information in the form of attributes.  In order to provide shoppers with the most useful information, we'll be making the "condition" attribute required starting on June 30th, 2009. 

In order to keep your feeds active past this date, please remember to include the "condition" attribute for all of your items if you're not already doing so.  Please include one of three values to describe your product: new, used, or refurbished.

For more information on formatting the condition attribute, please visit http://base.google.com/support/bin/answer.py?hl=en&answer=148684

In addition to making the "condition" attribute required, we've made some other changes to our attributes:

Recommended: "product type" 
The "product type" attribute allows you to specify a product category for each item. We recommend that you use our product taxonomy, however, you are welcome to use your own categories.  For more information, please visit: http://base.google.com/support/bin/answer.py?hl=en&answer=66818

New: "compatible with" 
The new "compatible with" allows you to specify what products your item is compatible with.  For instance, if you're listing an HP 74 (CB335WN) black ink cartridge, you can use this attribute to tell us that it's compatible with the HP Photosmart C4480 and HP Photosmart C4580 printers.  Using this attribute will help you avoid listing the same item multiple times with different compatibility information. For more information, please visit http://base.google.com/support/bin/answer.py?answer=73932#optional

Sincerely,

The Google Product Search Team

MSN Bing Replaces Live Search - MSN Shopping Officially Done

Bing has landed. After much hype, MSN has replaced Live Search with Bing, its new "decision engine." The shopping component, which appears to be called Bing Shopping, is  a re-skinning of Live Search Products/Cashback. This is not too surprising since the existing interface was already pretty good and since they whole Bing change was probably enough of work without having to redesign the shopping area as well.

Much like Google did for Product Search a few years back, MSN has accentuated the product component by prominently displaying a shopping link on Bing result pages, as well as the home page. This will likely lead to increased traffic and awareness of the cashback program, especially in the early days as news outlets cover the Bing launch and curious users use their internal decision engines to evaluate if switching to Bing is worthwhile.

Meanwhile, in Europe, the Bing  Shopping links point directly to the various Ciao sites, where available. The Ciao network is sure to see a boost in visitors as well.

In addition, as expected, MSN Shopping will cease to exist as of June 30. If you are a retailer currently advertising on MSN Shopping and not cashback, now is a great time to re-evaluate your MSN strategy.

Google Changes Terms of Service for Product Search

Google actually announced two things, but the first one is critical in the short term:

1. The Google Base terms of service have changed. All merchants must log in and accept these new terms in the next 30 days, before June 26, or product listings may become inactive. I didn't see anything substantially different from the old terms, but I'm not a lawyer so you'll probably want to actually read them just to be sure. 
2. Google has added fields for general business information such as address, phone number and customer service contact info.  There is no telling how they may use this information but it is probably in every merchant's interest to complete this. If displayed, this information may help consumers feel more confident in transacting with your company. More importantly, it seems likely that Google would somehow penalize/reward merchants based on the absence/presence of this information.

BizRate US and UK Get Refreshed

Shopzilla's BizRate US and BizRate UK just got a makeover. The new design is much cleaner, with better navigation, including a tag cloud of popular searches. Though the two sites maintain a similar look and feel, there are some functional differences in that the UK homepage has no display advertising and a box focused on product brands. The US site, which still maintains a few spaces for display ads, also includes a geography based promo area that shows top categories in some major metro regions.

Despite Shopzilla being established as the network brand several years ago, the Bizrate sites continue to attract more visitors in both the US and UK than the Shopzilla sites themselves, so it will be interesting to see how these updates impact traffic and conversion.

Shopping.com Introduces Tiered CPC Pricing and Variable Logo Rates

Making good on their February promises, Shopping.com announced via email this evening price changes that will take effect this Friday, May 15. The announcement consists of three parts:

1. Tiered CPC Rates

• What is it?  Shopping.com has broken down every category into at least two product price tiers (a handful will have three). For example, the clothing category has three tiers/rates: Products priced under $25 ($0.10 CPC), $25 - under $50 ($0.20 CPC), and $50+ ($0.35 CPC).
• What does it mean?  Merchants with lower priced products who either decided against Shopping.com in the past or are currently filtering those products from their Shopping.com feed need to take another look. Lower CPCs equate to less risk. For a $20 clothing item, if your break even at the current $0.20 rate is at a 2% conversion rate, you can now tolerate a lower conversion rate of 1%, meaning you can incur twice as many clicks before an order is placed. This is a potential game changer for merchants who operate at the lower end of the price range.  The opposite is true for clothing sellers with an average order value all/most products priced above $50. Your rates just went up. The ultimate impact to those merchants will depend on their existing efficiency on Shopping.com (which in recent months has been at the high end of the efficiency scale). It will be interesting to see if this tiered approach creates a "selection vacuum" at the low end of each tier. If a $52 clothing item was successful at$0.20 CPC, it may very well not be at $0.35 (a 75% increase in CPC), so it's possible that products at the lower end of each tier will disappear quickly, especially in the highest tier of the three tiered categories. This reminds me a lot of what happens at the price break points in the eBay world. Since eBay (Shopping.com's parent company) tiers auction insertion fees by starting price, many merchants find it beneficial to drop the price of their items by a few dollars to get under the price break. Similarly, depending on other metrics associated with the item, it might make sense to drop the price of a $50 item to $49.99 on one's website to get the 15 cent lower CPC, even though effects all sales and not just those originating at Shopping.com.

2. Variable Logo Rates:

• What is it?  Many engines charge a flat rate for merchant logos to appear. This simply changes that pricing structure, allowing the current CPC rate on the item to determine the logo charge. So if you are selling a $20 clothing item (CPC of $0.10), the logo charge is 2 cents per click, but for the $30 item (CPC of $0.20) the logo charge is 5 cents per click.
• What does it mean?  Again, this favors those selling lower priced items, but there is no bad news for anyone. Since the CPC rate is now based not just on product type (category), but also on product price, the increased efficiency needed to justify the logo cost just got much more realistic at the low end. When considering displaying a CSE logo or any other add-on feature, the simplest way to understand the risk is to compare the cost of the add-on to your current CPC and understand that your conversion rate needs to increase by that same amount for you to break even, assuming your average order value does not change. So if your CPC is $0.30 and the add-on is $0.10 (a 33% increase in cost), your conversion rate needs to increase by 33% as well. Depending on the strength of your brand, this may or may not be realistic (it is possible the AOV could change as well but over time, this tends to stay fairly flat).  It's clear that the folks at Shopping.com thought this through and are trying to make the logo more attractive to merchants of lower CPC products/categories by significantly decreasing the ratio of logo cost to current CPC.

3. International Click Filtering:

• What is it?  Shopping.com will no longer charge US based merchants for clicks coming from outside the US or Canada.
• What does it mean? This one is great news for all merchants. Since many US merchants won't ship products to the places where these clicks originate, they represent nothing but bad traffic. Eliminating these clicks/cost from merchant invoices can only help. I'm sure some merchants who want to attract international buyers may question this, but note that this does not prevent international shoppers from clicking, it just stops you from having to pay for those clicks.

Overall, this is very exciting news from Shopping.com. It will likely increase the breadth of their product catalog, mostly at the lower end of the price spectrum, and will probably increase adoption of the logo feature. More than that, this significant change is a further indication that the often stagnant comparison shopping industry is progressing. 

Full announcement below:

Shopping.com is excited to announce 2 new pricing programs, beginning May 15th, that will enable you to add low priced inventory and advertise your brand to millions. This is another step to sustain your cost of sales and profitability.
1.    Introducing Tiered CPC Pricing

We are introducing a tiered pricing model where the CPC rates will be based on the product price in all categories.

This innovative pricing model enables you to advertise low priced items and match consumer demand, while maintaining profit. We recognize some tiers will see an increase nevertheless the methodology we used to develop the tiered pricing model is based on meeting a sustainable cost of sale.
 

Click here to view the new rate card.

2.    Launching Tiered Logo Pricing

Shopping.com is making brand advertising more affordable by changing the logo rate from a flat $0.10 CPC to a tiered cost structure based on the item price. The new rates allow you to economically advertise your brand in front of millions of consumers. These new rates should not exceed 25% of your overall spend.

CPC Rate	New Tiered Logo Rates
<$0.19	$0.02
$0.20-$0.39	$0.05
>$0.40	$0.10

Additionally, we recently completed the full roll-out of our international click filtering program. You will continue to receive international traffic but Shopping.com will not charge you for these clicks, ultimately improving your campaign's conversion to sale.

Learn more on how to take advantage of these new prices and features.

Thank you for your continued business,

Tomer Shoval
Managing Director, Shopping.com US

Dialing Down MSN Shopping

MSN recently started communicating to active merchants that as of May 2, 2009, all featured store placements and display advertisement inventory on MSN Shopping will be retired. Upon further prodding, we've also been told that no gift guides are planned after Mother's Day. The lack of these elements will certainly lead to a decline in traffic from this long standing engine. However, this is not completely surprising since MSN has clearly been giving much more attention to their Cashback program, which was recently merged with the Live Product Submit program at search.live.com/products.

MSN will likely continue to accept MSN Shopping feeds, at least for now, since there is revenue associated with them. This feed data is already integrated with the Live Product/Cashback area. I would expect the Live Product/Cashback engine to fully replace the existing MSN Shopping system eventually, but if, when and how this would be executed is still unclear.

This integration/consolidation is a natural step and should eventually make things easier for merchants and consumers alike. One has to wonder what share of clicks the non-Cashback listings are getting on pages with "mixed" offers. It seems pretty clear, though, that the MSN folks have some kinks to work out, as reflected in the dueling Home Depot listings below. Showing both listings is a little questionable to begin with since the Cashback listing seems significantly more likely to get clicked, but the inconsistent "free shipping" details (the Yes vs. No in the second column) are pretty confusing as well. That second listing comes from the PriceGrabber network via MSN Shopping. MSN Shopping also gets product data from Shopping.com, so the consolidation effort involves more than just the multiple MSN sources, but external sources as well.

Best of luck to the MSN team on getting this sorted out. I have yet to see any Ciao listings in the mix so it will be interesting to see if they choose to do so, leave Ciao US as-is, or maybe shut it down in the US so they can refocus on Europe.

RIP Nahum Sharfman, Founder of Shopping.com

TechCrunch is one of several outlets reporting the untimely death of Nahum Sharfman, founder of Shopping.com, and his wife, Nava.

Condolences to the friends and family of Mr. and Mrs. Sharfman and the entire Shopping.com team in this sad hour.

Google Product Search Mobile

Google just announced that Product Search listings are now available on iPhones and smartphones that use Google's Android mobile operating system. I guess lowly Blackberry users like myself will have to wait a bit to take advantage of this.

There is an feeling of deja vu around this announcement since back in 2005, Google rolled out Froogle mobile. Updated technology for sure, but with pretty much the same impact.

There are other comparison shopping services with a mobile focus, such as Frugalytics, Frucall, and Pongr. Frugalytics is a pretty straight-foward CSE experience, but with pages designed for easy mobile browsing. Frucall has some interesting additional features for users, such as phone and SMS options, as well as price alert and "tell a friend" functions. Pongr has a downloadable app for iPhone, Android and Blackberry, as well as SMS and email communication options.

Despite the nice features of some of these sites, it's hard to think Google doesn't have an edge in terms of getting traction, even with the current limited support. Since BlackBerry has support for many Google mobile features and is a popular phone choice, it's seems likely that it will be long before the berry version becomes available.

Anyone want to place bets as to how long before we see a Cashback for Windows Mobile?