Shopping around

Comparison shopping engines can help you boost sales and acquire customers — provided your company's product is a top contender among the search results. And that doesn't mean your company has to offer the lowest prices for the merchandise featured.

Unlike a general search engine such as Google, AltaVista, or Yahoo!, where visitors search for relevant information on a vast array of subjects, comparison shopping engines allow shoppers to research the price and details of specific products. If the customer finds an item at a desirable price, the shopping site will redirect him to the merchant's site to make the purchase. All comparison sites are not created equal, though. Each engine uses its own particular algorithm for ranking and displaying search results. Each also has different criteria and charges for participating merchants.

Of the major engines, only Froogle and Shopzilla offer free listings. In addition to the free listings, though, Froogle — an outgrowth of Google — does charge merchants to participate in its advertising plan, AdWords, in return for preferred placement in a column to the right of the nonpaid results. Similarly Shopzilla provides free product listings, but it also charges merchants to appear at the top of the search results.

The costs to participate in paid-inclusion comparison sites such as MySimon, NexTag, PriceGrabber, and Shopping.com vary depending on product category. Most sites do not charge a set-up or joining fee but instead charge $0.05-$0.10 per lead (cost-per-click, or CPC) in categories with low-margin products such as books and toys, and $1.00 or more per lead in high-margin categories like ink cartridges. Most sites, however, allow merchants to purchase or bid for higher CPC rates to appear in preferred merchant rankings.

From price to sponsorship, comparison shopping sites use a variety of algorithms to sort product search results. Most of the major search engines use product price as a common sorting focus, followed by store rating and reviews, popularity, relevancy, and placement bids.

All the major shopping engines accept data feeds — files with pricing, product, shipping, and other details that the merchants supply to search engines or affiliates. Only some of the engines, however, will crawl your Website — in other words, coming to you to gather information rather than your pushing data to them. Among those that crawl are Shopping.com, Froogle, and Shopzilla.

According to Jupiter Research, 8% of online shoppers used comparison shopping sites during the 2003 holiday season, whereas 64% used general search engines. But while fewer online shoppers use comparison engines than general-purpose engines, comparison engine users are overall “more intense” shoppers, says Jupiter Research retail analyst Patti Freeman Evans.

Indeed, “one thing that's really cool is that the people looking to comparison shopping sites are looking for exactly what they need,” says Heather Lloyd-Martin, president/CEO of Bellingham, WA-based agency SuccessWorks Search Marketing Solutions. Any shoppers who come to your site via a comparison engine are in effect prequalified and should have higher conversion rates than other visitors.

As a result, says Alan Rimm-Kaufman, founder of Charlottesville, VA-based Rimm-Kaufman Group, an online marketing consultancy, the cost to acquire customers via comparison engines can be as little as half the cost of acquiring buyers via traditional list rentals. And with shopping engines, catalogers can start out with only a smattering of product listings to see how many new leads they will generate before investing more money.

According to Sarah Leary, vice president of product at Brisbane, CA-based Shopping.com, a comparison shopping engine is “an ROI-positive investment the day you spend [the money], and that is unheard-of marketing. That's what performance marketing is all about.” Shopping.com charges merchants $0.05-$1.00 per lead and has a conversion-to-sale rate ranging from 2% to 10%.

Most comparison shopping sites will supply merchants with detailed analysis on the number of sales leads in a day in various product categories and customer feedback about how their products are selling. In comparison, Leary says, a company can spend millions of dollars on advertising campaigns in traditional formats such as television without any record of how many people actually viewed the advertisements.

Getting started

One of the beauties of comparison search engines is their testability. Rimm-Kaufman advises testing the various comparison shopping sites as well as the products that work best on those sites before making a commitment. Some sites specialize in particular product categories; what's more, not all the sites attract the same type of shopper.