CPC Rate Changes – Thank you Amazon & Become

Tis the season for shopping engine CPC rate increases. Five years ago, it was common to see all the shopping engines implement a 25% CPC rate increase across the board…because, well…fork lifts also see a lift in conversion during the holiday shopping season. Yeah, I didn’t buy it either.

The original party line was that conversion rate goes up 3x during the holidays and the shopping engines were adjusting CPC rates to get their fair share for driving qualified leads. If you pressed a little bit, the shopping engines would talk about CPC rates on Google AdWords going up; and if the CSEs’ traffic acquisition costs (TACs) were rising, then they’d have to pass that additional cost onto the merchants. OK, that made sense, but that also pointed out how dependent the shopping engines are on Google AdWords.

Fast forward a couple years (to 2007), and Shopping.com did something different. They didn’t do an across the board increase in CPC rates, but rather implemented a variable rate increase. At the time, Alisa Weiner and Tomer Shoval explained:

We’ve done some analysis looking at previous years, looking at deltas in different categories in rate cards from our search partners. As opposed to one size fits all, we’ve done the analysis to figure out what’s needed to cover our costs. And we’ve moved the [rate increase] from November 1 to November 15 to better reflect when that increase kicks in. What we’re trying to do this year is be more sensitive to reflect what we’ve seen in the past. In some categories the keywords [cpc rates] increase more, in some categories the keywords [cpc rates] increase less.

So you’d expect the other shopping engines to follow suit. Well, that didn’t exactly happen the last couple years. Of the big, tier 1 shopping engines, NexTag and PriceGrabber have stuck with their across the board CPC rate increases. Bad!

Shopping.com stuck with its guns and maintains its variable rate increase. And they got Shopzilla and Pronto to copy that model.

However, for the first time in the last 5 years, two major shopping engines have no CPC rate increases. Amazon Product Ads and Become are my PPC shopping engine heroes of this holiday shopping season with no CPC rate increases in any categories.

So if you’re not up and running with Become or Amazon Product Ads, what are you waiting for?

Bing Cashback – Why Merchants Should Submit their Feed Today

Say what you want about MSFT and Bing, but if you’re a merchant, you should be submitting your data feed to Bing Cashback right now. Why? While some people think that Bing will do nothing for MSFT’s search market share, there’s a strong possibility that at least in the short term, with all the money that MSFT is throwing at its advertising campaign that Bing will gain consumer adoption. If that’s the case, then Bing Cashback will also benefit. And at this point Bing Cashback does not have the merchant coverage of the other shopping enignes which means less competition for each merchant. Add the fact that Bing Cashback is cost per acquisition (CPA) and there’s no risk to submit your feed. Now, there is the cost of getting up and running (creating a data feed and implementing Bing Cashback’s tracking solution), but now might just be the right time to go for it.

At the Microsoft Search Summit, the pundits had plenty of harsh words for the Bing team, but they also had some good ideas for Bing Cashback. As I tweeted today (#badabing), there were three great ideas: integration of coupons (take a look at Yahoo! Shopping, Smarter, and TheFind), addition of video reviews (take a look at Smarter/ExpoTV integration and heck, take a look at Ciao, which is part of the MSFT family), and clearer view of bottom line price (right now it’s not clear if the price listed is before or after cashback). I need to add to the list comprehensiveness (more merchants needed), addition of tax/shipping info, and social features. Ok, this last point is a little strange for me to even mention as I feel that most of the web x.0 ‘social shopping’ experiments have been a complete waste, but with the runaway success of Facebook, Twitter, and Youtube and the obvious social aspect of shopping offline, there has to be a smart way for Bing Cashback to experiment in this area. Could be a nice differentiation point…maybe take a look at Pronto’s work in the area…or just talk to the team at Ciao.

IAC Should Buy PriceGrabber

Truthfully, Microsoft should pick up PriceGrabber, but MSFT is a bit busy these days with their frenemies at Yahoo.

So why IAC?
-Pronto has a solid base because it powers IAC’s Ask.com. The line in Pronto’s recent press release announcing ‘Pronto’s explosive traffic growth through the second half of 2007 coincides with its entree into the Social Shopping space’ is nice, but the reason for the growth is a mix of becoming Ask’s default shopping engine and aggressive keyword buying on the PPC engines. Pronto has room to grow in both those marketing channels, but adding PriceGrabber would allow it to tackle the third leg of a shopping engine’s traffic acquisition strategy: business development partnerships. PriceGrabber powers the comparison shopping functionality of hundreds of strong content sites. The addition of this partner network in conjunction with PriceGrabber’s established traffic base would quickly vault Pronto to tier 1 shopping engine status as opposed to a steady battle for growth through expensive PPC ads.

So is there any chance that this would happen?
-IAC has the money. IAC has the ecommerce ambitions (HSN, Cornerstone Brands, ShoeBuy, Gifts.com). IAC understands search (Ask). IAC understands the power of comparison shopping/lead gen (LendingTree). And if the company really wants to play in the shopping search space, which I believe it does, buying PriceGrabber would considerably accelerate it’s growth. There are some big cultural issues to overcome, but I think if both teams sat down to look at their strengths, I think they’d realize this is a solid match.

Note: I did not talk to either party about this potential match.

Seasonal Price Increases Part Two

A lot of people missed the emails sent by the shopping engines about seasonal rate increases, so here’s a quick summary:

Become.com – no rate increase
Yahoo! Shopping – no rate increase
Google Product Search – free
TheFind – free
Pronto – not holiday related, but there will be some adjustments, both up and down (Nov. 15)
Smarter.com – 20% rate increase for all categories (Nov. 1 – Dec. 31)
Shopzilla – 25% rate increase for all categories (Nov. 12 – Dec. 31)
PriceGrabber – 25% rate increase for all categories (Nov. 1 – Jan. 15)
NexTag – 25% rate increase for all categories (Nov. 1 – Jan. 2)
Shopping.com – 10-25% rate increase depending on category (Nov. 15 – Dec. 31)

Pronto to Take Over Ask Shopping Soon?

Pronto is powering the Shopping ‘tab’ on two of Ask’s search properties: Excite.com and iWon.com.

It’s not like iWon and Excite get a ton of traffic, but I’m sure this means that Pronto is moving closer to replacing PriceGrabber on Ask’s Shopping section. Haven’t heard anything from either company to back up this statement, but I have a feeling this will happen well before the holiday shopping season.

Background: Why Pronto Will Succeed

PS. Pronto is also powering Lycos’ Shopping section.

Barry Diller on Comparison Shopping

“[Comparison shopping] makes so much sense that we didn’t do it. We looked at all of them. They were for sale for anyone who would pay the price. We looked and said they do something good, but it’s boring, we don’t want to do it. I think comparative shopping is very interesting, but I think the valuation was insane. It’s a great thing, it’s just not something that I want to do. I wish them well, but not too well.”

-Barry Diller (Chairman and CEO IAC) on comparison shopping engines, addressing a group of merchants at Shop.org

Red Carpet Hiring

As I’ve explained before, a number of individuals have told me about IAC’s plans to get into comparison shopping with a project code named Red Carpet. However, because IAC doesn’t comment on rumors, I’ve had no official confirmation of this information.

Looks like Red Carpet is still moving forward. Greg Yardley tipped me off to this job listing for Red Carpet on the beta job site YorZ (if you know anyone who fits the bill, you can receive a $5k bounty for the referral). While the listing does not mention IAC or comparison shopping, it definitely reads like a comparison shopping job.

I’m about to get on a flight to San Jose for SES. Expect a ton of coverage this week.

Rumor – IAC Launching Shopping Comparison Engine

Anonymous sources in the internet marketing space tell me that IAC/InterActive Corp is hiring tech and biz dev people to join a project called Red Carpet – which apparently will be a new comparison shopping engine. Planned rollout is for Q4 2005. This is just a rumor right now. I contacted IAC for more information 2 days ago, and my contact is still looking into it. I will continue to investigate and tell you more as I hear additional news. If anyone out there can tell me anything about Red Carpet, please contact me (all correspondence will be kept anonymous).