Prepare for Holiday 2005, Part 1: Comparison Shopping Search Engines

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Too early to be talking about the 2005 holiday season? Think again. According to the biggest players in comparison shopping search, if you haven’t come aboard by Labor Day, you won’t have enough testing and analysis time to be ready by the holidays. And if trend figures are any indication, any company seeking online holiday sales better not miss comparison search. 2005 might be its breakout year.

These days, most major merchants already participate in multiple comparison search engines. Many no-name merchants generate stellar sales through comparison search. There’s room for more. Plus, some engines are expanding their categories to give new opportunities to different market sectors. Shopping search engines see their real incremental growth, however, coming from increased user adoption and repeat use of their engines based on satisfied experiences.

For merchants, and hence media buyers, comparison search is all about increased return on investment (ROI). Like traditional paid search, comparison search is based on a bidding system. By its nature, it attracts consumers further down the purchase funnel, consumers ready to make buying decisions. As a result, media buyers can typically afford to pay higher CPCs (define) than they would with traditional search.

The holiday season is the time to allocating more budget to comparison search. Comparison search engines are now preparing for the upcoming holiday season. These preparations deal with improving merchant tools, increasing the power of their onsite consumer decision-making tools, and ramping up their own direct marketing efforts:

• NexTag has a new data feed auto-import option, tools to allow smaller merchants to create feeds through an online dashboard, and a free ROI tracking tool system. For consumers, it offers consumer email price alerts and product price history charting. To raise consumer awareness, NexTag plans to invest heavily in online advertising, particularly in traditional search, and to conduct PR campaigns.
  
  
• Shopzilla, formerly BizRate, has an audience that skews toward middle-aged female shoppers interested in retail and soft goods. It vows to continue expanding its inventory to more broadly meet consumer demand. Claiming to be the largest publicly owned shopping search engine, Shopzilla has developed robust data categorization technology (Robozilla), designed to help expedite the comparison process. To market itself at holiday time, Shopzilla too plans to spend big with traditional search and to leverage the properties of its parent company, media conglomerate E.W. Scripps.
  
  
• PriceGrabber.com will focus on adding product tours, more content -- both user and third-party reviews -- and discussion boards to help consumers’ purchasing decisions. Its Holiday Shopping Guide will provide additional ad opportunities, such as merchant advertorials. PriceGrabber.com plans to rely on traditional search but will also market offline (radio and TV) and has inked a deal with MSN Shopping to provide supplementary results.

When dealing with ad agencies, the comparison engines agree the biggest obstacle is in data feed creation. They don’t understand why creating the feeds should be so difficult. In my experience, however, data feeds can require that uncomfortable marriage between marketing and IT as a potential first obstacle, not to mention feed requirements differ from engine to engine. Scott Wingo, CEO of ChannelAdvisor, a company that helps merchants and agencies create and optimize feeds, puts it this way: "The feed is not a one-time thing. It needs constant care and feeding, and dedicating a full-time IT person to data feed maintenance can get really pricey, really quickly."

What’s a good holiday planning strategy once you get the data feed issue resolved? The comparison engines advise you allocate time for a testing and ramp-up period to work out the kinks by Halloween. Depending on the merchant’s size, the ramp up can take 30 to 60 days. During that time, test product price points, bid and positioning points, traffic flow, and landing-page optimization. Also, take the time to acquire merchant ratings, as these ratings affect positioning and consumer decision-making. Don’t be choosey -- list in all the engines.

There are different opinions on selecting price points. The engines say consumers seldom resort results by price, but ChannelAdvisor disagrees. Some say knock $1-2 off important products you want to sell. Others say go for position first, merchant ratings second, and, finally, price.

To sort it all out before Christmas, get cracking now.

In part two : online advertising opportunities.