For anyone running or working with an e-commerce site, you know what I mean by the title. While shopping engines are a boon to certain consumer segments, they are both a boon and a bane to marketers trying to optimize programs or forecast channel results.
The concept is pretty straightforward and plays to the Internet’s strength: third-party sites aggregate content from multiple retailers, allowing consumers to search across retailers in one place for goods and pricing, rate sellers, and complete a transaction. Audiences on shopping engines are at the end of the online shopping experience where they’re coming down to a critical pricing decision, making this channel very sensitive to price and seasonality. Any marketer with multiple products to sell needs to strongly consider this channel — despite the limitations, nuisances, and nuances.
Straightforward But Limited Process
The process is also straightforward. Retailers contract directly with shopping engine properties like SiteMatch, Nextag, Yahoo Shopping, Shopzilla, or Shop.com (among many others) or with shopping engine managers like Quigo (recently acquired by AOL) or Channel Advisor (among others), which may or may not manage the process of collecting product feeds or crawling sites to create feeds and then managing and optimizing the campaigns. Retailers pay a flat CPC (define) negotiated with the shopping engine, usually tied to the category and season.
Also available are some limited premium placement opportunities that float marketers to the top of the listing, where they profit from the increased visibility and enhanced credibility. These premium placements are often awarded to marketers who are willing to place surveys to get their sites ranked by consumers as trustworthy.
How do you decide which shopping engines to use? The site selection process doesn’t differ much from any other online media planning. In this case, buys depend on traffic and past experience, if available.
There is a top tier of shopping engines against which you try to forecast budget and then move to next tiers as budget allows. Long-running programs benefit from year-over-year analysis, but like search engines the environmental factors rule all and they change every year, often making those comparisons moot. Monitoring performance is an ongoing struggle and optimization tactics are limited.
From a practical standpoint, consumer shopping engines operate in almost a binary mode. Either they’re on or off. Either you include products or categories in the feed or you don’t.
The feed is usually drawn from the site content, so manipulating or testing product descriptive copy (the same as ad copy in this context) is difficult due to the dynamic nature of keeping product feeds current. Consumer demand dictates the number of relevant searches and the pricing is fixed, which leaves you with few levers to pull to optimize results. Results can vary widely and unexpectedly from month to month and season to season.
Shopping engines aggregate both products and audiences, providing a useful service to marketers. Like paid search programs (SEM), the shopping engines earn revenue by the click, while the marketer earns revenue by the conversion. Both search engines and shopping engines capitalize on consumer intent and promise scale.
The big difference between the shopping engines and search engines is that search engine programs are tagged at a level of minute detail and advertisers or their agencies have control over multiple variables on which to optimize the campaign to maximize the conversions. They have levers.
To monitor shopping engine programs, we can only log into a reporting interface, either at each engine or at the aggregated level, but there is usually no tagging and no third-party verification. You could conceivably run the shopping engines as individual programs, place their tags, and use their reporting, and then use an analytics program like Google Analytics to obtain clicks and costs from each.
But that is an extremely inefficient process that leads back to the same lack of options. All you can realistically do is take the products or categories out of the feed to manage a portfolio cost of marketing or other ROI (define) metric.
Shopping engine feeds tend to be unpredictable. They scale up or down as the engines perceive opportunity for their own revenue enhancement, such as when they see a lot of activity in search or display that will drive clicks.
Some shopping engines have contextual ad opportunities with “powered by” ads within product reviews to help drive quality traffic. Many of the shopping engines do a superb job of injecting their listing in organic and paid search results.
Other frustrations of working with shopping engines include:
- You can cap but not truly control spend.
- A consistent delivery cannot be promised. Spikes will happen out of the blue and might burn through your budget overnight. You can try to regulate that in your insertion order (IO) if you can.
- The IO process is archaic. It lasts forever, has little detail, and can go across clients if you’re an agency.
- Shopping engines have multiple budget limits, account reps, account preferences, systems, and so on. Managing billing and credit departments is a nightmare, too.
- There’s no consistency in the channel, no best practices across engines across the feeds. They have not standardized the feeds, as each engine maintains its secret sauce.
Some solutions for the shopping engines:
- Develop a spend limit based on daily spend, similar to Google AdWords. A monthly credit limit that simply shuts down isn’t a regulated budget.
- Allow advertisers to have more influence with various methods of optimization.
- Have a third party develop a system similar to Google’s My Client Center (MCC) to control multiple shopping engines and multiple clients.
- Allow budget limits, preferences, billing, systems, and so forth to be managed by this MCC-like interface as well.
- Develop a standard format across shopping engines. Unused fields could simply be ignored by specific shopping engines.
If we had a wish list for shopping engines, stronger optimization opportunities would be right at the top. That would make this logical, effective consumer touch point more a part of an integrated plan to maximize revenue and less of a crapshoot.
Search ads and display ads offer a powerful one-two punch for your marketing plan. Join us on Wednesday, September 30, 2009, at 1 p.m., for a free Webinar to hear how recent studies show that search and display advertising used together can drive sales more effectively than either channel by itself.