Comments on: What comparison search engines are doing wrong

By: Range Of Data Conversion

Range Of Data Conversion — Thu, 21 Feb 2008 17:33:50 +0000

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By: The Preston Blog - An internet marketing blog for internet retailers » Can Shopping.com really not figure this out?

Mon, 04 Sep 2006 02:09:06 +0000

[…] It’s been a while since I wrote a post about comparison engines but I can’t believe the issue that we’ve had with Shopping.com recently. In our industry (computer hardware and accessories) it is not very uncommon for two different products to have the same MPN (manufacturer part number). For instance, two manufacturer’s may use the part number 200A for two products that are entirely different. […]

By: Joe

Joe — Tue, 14 Mar 2006 21:53:09 +0000

Hi Preston-
I agree with David’s main point: there is little correlation between bid price and sales on comparison shopping engines. The brilliance of Google is that they provide very little usable information for users to make an informed purchase decision. You only have two lines of copy to compare one advertiser with another so the user has to click on many ads to find what they want. So the main thing that differentiates advertisers is their position, which is valuable. There’s a built-in scarcity (the top 6 slots) that drives up prices. Good for Google but bad for merchants because their conversion to sale goes down as consumers have to click everywhere to find what they really want.

On shopping comparison sites, users have a lot more information to make a purchase decision: price, merchant reputation, shipping and tax, etc. A merchant’s position in the initial sort order, while relevant, isn’t dominant like on Google. Users quickly resort the merchant list on what matters to them. But because of these features, the quality of the click coming from a shopping comparison site is generally much higher than one from Google.

That’s why shopping comparison engines need price floors. If there were none, merchants would all just bid $0.01 per click because they’ll quickly figure out that bidding $0.05 doesn’t buy you 5x the ROI.

By: ComparisonEngines.com » Blog Archive » Merchant Interview - SewellDirect

Tue, 14 Mar 2006 19:24:16 +0000

[…] Background SewellDirect is based in Provo, UT. I spoke with Preston Wily, VP of Marketing, who wrote a great piece on his blog last year pushing shopping comparison engines to take the Overture road and create a real PPC market place as opposed to using prohibitive price floors. I also followed up with Cameron Gibbs, Marketing Manager at Sewell who is directly responsible for the PPC and comparison engine marketing channels. […]

By: ComparisonEngines.com » Blog Archive » Shopping Comparison Wish List - Or Everything I Know I Learned from YSM and Google Adwords

Thu, 05 Jan 2006 08:54:37 +0000

[…] 2. No More Price Floors. Preston Wily brought this up months ago, and I think the shopping comparison engines will eventually move in this direction. It’s absurd that there are price floors (minimum bid amounts) on the engines. YSM and Google Adwords have proven that market forces will naturally create a semi-efficient market (I say semi because there are way too many companies which don’t track their online advertising spend which leads to bubble like bids in the short term) and this semi-efficient market would encourage new advertisers to test out the engines (a major complaint from merchants is that the minimum bids are too high - Google and YSM have trained people to start bidding at $0.10). […]

By: Cameron’s Blog » Blog Archive » Google Finally Gets in Right on Content Match

Tue, 29 Nov 2005 05:48:47 +0000

[…] Now that the minimum bid for content match is just $0.01, I can advertise where I wasn’t advertising before. Google has opened up a market that they had eliminated due to the previous high cost of content match advertising. In other words, they have eliminated the price floor and advertising willing to advertise at a lower cost can advertise on publishers’ sites that are willing to rent their space for less. My friend Preston does a good job expaining this economic principle in his blog. […]

By: admin

admin — Thu, 06 Oct 2005 17:41:56 +0000

David,

I appreciate your post. I don’t really understand, however, why the engines can’t eliminate the minimum (which Google has taken steps toward doing). Competition will drive the bids up - for example, if I have a $200 margin on a product then I am probably going to want a top-3 spot in Google (for syndication purposes). Depending on my conversion rate I would definitely outbid my competitors up to a point where I am maximizing revenue - just a standard auction model. In my experience I am never anywhere near minimums on products like this so they are irrelevant.

If comparison engines act the same, using this argument, they should eliminate the minimums. I think it is a great point, however, that there is a fundamental difference because you can sort by price with comparison engines so it is not apples to apples. I did not account for this in my argument. Once again, thanks for your post.

Preston

By: David

David — Thu, 06 Oct 2005 17:32:01 +0000

There is a major fallacy in your argument. You’re assuming that shopping engines are like Google in that there is a correlation between bid price and sales.

If my experience is accurate, then there isn’t. We have thousands of products and are in all the major engines. We bid $0.01 above the minumum. We get lots of clicks on products that we’re most competitive on and few clicks on products we’re not as competitive. That’s why the engines cannot eliminate the minimum.

What the engines should do is link the minimum to the retail price. So for example, the minimum for any product that sells for less than $10 is $0.10.

By: Comparison Engines » Blog Archive » What Comparison Engines are Doing Wrong

Thu, 29 Sep 2005 15:22:46 +0000

[…] Preston Wily from SewellDirect, wrote a smart piece about minimum bid amounts on the shopping comparison engines and how the artificial price floors are detrimental to consumers. You should definitely check it out. This entry was posted on Thursday, September 29th, 2005 at 8:22 am. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. Leave a Reply […]

By: gameguy

gameguy — Thu, 29 Sep 2005 00:47:52 +0000

I noticed ChannelAdvisor partners with a company called SortPrice.com. They offer free product listigs via data feed or enhanced listings for a flat rate per month. I use them and froogle for of my site and I am doing well. Real great approach for them to put the consumers and merchants first.