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Shopping Search IndustryThoughts on Aggregationthinking out loud... In thinking about ways in which sites can be better than other sites -- or to put it in more concrete terms, who actually deserves the top spot when you search for "widgets" -- there is not much agreement on what to value. One old standby is unique content -- the amount of content that has not been duplicated elsewhere. Webmasters get in the most fantastic pissing matches arguing about who has the most unique content, how unique it is, etc. This is one useful thing to consider, but it is not the only way to add value, especially in comparison shopping. In comparison shopping, you can have huge value-add without unique content per se. (example: FatLens ticket search) Simply aggregate information that is available elsewhere, and it is the scale and the style that adds value. Anyone can grasp this concept if you mention an example like Google, but on smaller scales, aggregation does not always get the same respect, and is not viewed as a type of content. Why? Granted, aggregation must be significant to be useful. If one shopping engine lists 45 offers for a product, and another shopping engine lists 50 offers for the same product, no big deal. At some point the law of diminishing returns kicks in for aggregation, limiting the aggregation upside for new general-purpose shopping engines. The thing that amazes me lately is how many new sites there are without unique content like reviews -and- without any signficant aggregation... like, if Shopzilla lists 50 offers for a product, these sites will list maybe 5... or 3... or 1? Now, if you go niche, it is another story, and there are plenty of opportunities to out-aggregate larger competitors. Say, if I'm working an event niche, it is perfectly reasonable to have 3x, 5x, even 10x more listings than craigslist. Then again, if there is an event engine for a city, they might be able to aggregate severalfold the events of my site. I've mentioned aggregation in terms of offers and listings, but there term could just as easily apply to attributes. Across all kinds of products, from common to uncommon, how many attributes remain un-slice-and-dice-able? How cool would the web be if you could slice and dice on any attribute of anything and find all matching items? Although this would come from a Google or Yahoo, in the near-term, I think we are overdue for an explosion in aggregation and attribution from niche sites. The large sites have more tech, but small sites have more manpower, in the aggregate. All they need is a little more tech, multiplied by their manpower, and it is a huge leap forward. Any hypergrowth in aggregation has to include "the edge" to pick up where traditional centralization leaves off. Judging by the amount of cool tech that is trickling down to small sites these days, it is only a matter of time until more aggregating/attributing tech finds its way into the hands of the average webmaster. Like it did with forums. to be continued...
Thoughts on Aggregation
Price-What?A little slice-of-life that shows how far comparison shopping still has to go... Friend: I heard Experian bought PriceWatch today. And this friend is not your grandmother, he is a programmer who is online a lot...
Price-What?
Comparison Shopping OptimizationI just ran across a sponsored case study on InternetRetailer.com from July 2005: Comparison Shopping Optimization: What Every Online Retailer Needs to Know (for a .PDF, see the source) It is a nice outline of how retailers can improve their advertising perfomance with comparison shopping engines, but perhaps even more significant is that is uses the term comparison shopping optimization. By now, many (most?) online retailers have heard of search engine optimization, or its abbreviation, SEO. There are still variations of this term, and search engine marketing (SEM) is the more accurate description for integrated SEO and PPC, but there is no denying the mojo of SEO. Comparison shopping vendors have no equivalent to SEO or SEM. The lack mojo. I've seen "shopping feed management" (SFM?), but it sound so unsexy, so bureaucratic, like anyone could do it and get roughly the same results. It sounds like the kind of job that would be handed down to Milton from Office Space, if only he could find his stapler. Then there are the companies who come up with terms so obtuse, I have a hard time figuring out what the heck they are selling. Maybe that is their point, but I think in the long run, everyone benefits from using terminology that is at least in the same ballpark. Is there a term a potential customer can type into Google to find the majority of comparison shopping service vendors? "shopping feeds" might be the most used, and the least glamorous. Anyway, I'm surprised a natural-sounding phrase like comparison shopping optimization ("CSO") was not used before the white paper (Google: comparison shopping optimization), and has not been used since, except for copies and references of the source.
Comparison Shopping Optimization
Integration of Shopping Engines and Shopping Carts?I was recently contact by a shopping-cart developer who wanted to make it easy for his clients to connect with the comparison shopping engines: "I am writing you today because I want to re-engineer my company shopping cart to automatically include the data feeds for the various shopping search API's, as a means of getting their products in to the shopping engine sites (assuming that they sign up). I have written to all of them but have not gotten any responses regarding getting the XML mappings to build into our system." I'm surprised we do not see more cart-level integration. Hey, shopping engines, are you interested? If so, drop by the comments section and point to an detail page or a contact person, eh?
Integration of Shopping Engines and Shopping Carts?
Forbes Best of the Web: Shopping BlogsForbes "BOW Directory" added a category for best Shopping Blogs. Sweet Pea would surely say Ayyyyyyyy, The Manolo, he was robbed! more shopping blogs: Google Search, Yahoo Search, MSN Search
Forbes Best of the Web: Shopping Blogs
Dvorak: no winners yet among comparison sites"While there are perhaps 10 candidates to be the premier shopping engine, nothing stands out as the clear winner." source: MarketWatch Wow, this is a very tame article for Dvorak. He says Froogle seems to be more of a lark or an experiment than a shopping engine, but everyone says that. Bambi will have to give him lessons on how to stir it up when writing about shopping engines.
Dvorak: no winners yet among comparison sites
Non-Shopping Non-Comparison Non-EnginesNo need to get too specific, but not every site that claims to be a shopping comparison engine is one. Heh... press release spam for a single-source PPC search feed... shopping comparison has officially arrived. :-)
Non-Shopping Non-Comparison Non-Engines
Shopping Engine Software for Purchase or License?There is no shortage of software and services available for general search engines. But are there any for more structured search, i.e. shopping search? A reader asked this question re: an industry that is not served by the existing shopping engines... anyone?
Shopping Engine Software for Purchase or License?
Hasta La Vista, Acquired Comparison Shopping Engines?"Bye-bye, Shopping.com. So long, LowerMyBills.com. Hasta la vista, Shopzilla.com." Includes comparisons to some of the earliest shoping engines in the .com days: Junglee, Jango, Quando, C2B Technologies. Hmmmm... The leading shopping engines of today are said to drive in the neighborhood of a billion $ in retail sales. How is this like 1998?
Hasta La Vista, Acquired Comparison Shopping Engines?
SEW Awards '05 - Best Shopping Search EngineBest US Shopping Search Engine Froogle won with the most reader votes, 32 percent, and Yahoo Shopping had the second-most votes, 19 percent, tied with Shopping.com. While both Froogle and Yahoo Shopping made strides in the last year, as a general rule, I think the companies with their own web search engines are lagging when it comes to shopping comparison engines. Unlike the independent shopping engines, Froogle and Yahoo Shopping can rely on the relationship with their parent engines for plenty of traffic and, apparently, awards like Best Shopping Search Engine. Hmmm... I might need to come up with a multi-category Shopping Comparison Engine Awards later this year to shine a light on the real work that is being done in this area.
SEW Awards '05 - Best Shopping Search Engine
Arbitrageurs vs. PrequalifiersRegular readers know my disdain for using the terms "price comparison" and "shopping comparison" as if they were synonymous. Today, I have a new pet peeve, courtesy of Bambi Francisco at MartketWatch. (see: The arbitrageurs.com: VCs may fuel a future paid-search bubble)
Arrgghh! Let's nip this in the bud, because it devalues the work of everyone who is adding real value in the shopping comparison space. ar·bi·trage (n.) - the purchase of securities on one market for immediate resale on another market in order to profit from a price discrepancy. American Heritage Dictionary two key differences: A company that is in the business of adding value can also take advantage of pricing discrepancies, but that does not mean the two concepts are synonymous. If You Want To Look At Real Paid Search Arbitrage... ...look no further than "AdWords affiliates" who are selling traffic direct-to-merchant. Immediate resale? Yes These are the clear-cut arbitrageurs, and their revenue-per-visitor is the arbitrage baseline. Anything about that baseline, long-term, will be won by the middlemen who provide above-average value. In Defense of Middlemen Who Earn Their Keep I know pundits like to predict the demise of middlemen, but I'm partial to this quote from Kevin Kelly in New Rules for the New Economy:
Shopping Comparison and Merit-Based Advertising Adding another wrinkle to this topic is the AdWords ranking formula that uses click-through rate (CTR) in addition to maximum bid.* That means there is always a human element, and this is never strictly a financial proposition. You can work all you want to identify undervalued keywords, but if you do not click with the customer, you do not get access to the market. (calculation explained: post #11) Luckily for the comparison shopping sites, they have plenty to offer in exchange for a user's click: feature finders, feature comparisons, user product reviews, user merchant reviews, price comparison price alerts, the list goes on. This does not always sit well with retailers, who get tired of seeing the same comparison sites in the paid and organic search results. Still, in my experience, "killer shopping apps" are more commonly found at aggregators, not retailers. In merit-based advertising, if you offer a useful service and can convery it in a short text ad, that can be a very real form of pricing power. I have tried to illustrate this "comparison dynamic" with the following made-up text ads:
Conclusion I agree with the basic math of overcapitalization + overbidding = distaster for companies that focus on the filthy lucre of arbitrage more than the real job of prequalifying. However, I think a paid search bubble due to shopping-search restructuring would be a mini-bubble with a short lifespan. I certainly would not mention these sites in the same breath as boo.com. If we look past the investment fads, there is a big-picture trend here. The shopping engines are creating more value than ever, and there is plenty of opportunity for improvement. And I'm not just talking about the obvious shortcomings of Froogle. I'm talking about all kinds of synergies between services and technologies. What if every product category was served as well as digital cameras?
Arbitrageurs vs. Prequalifiers
Danny Sullivan on Vertical SearchBloggers have been going back and forth on the issue of vertical search, but now we have a weigh-in from search heavyweight Danny Sullivan. via ClickZ: "I can't say it enough. Vertical search is going to take over," he said. "The people who are going to win are the people that understand shopping search now." Keep saying it, Danny, keep saying it. :-)
Danny Sullivan on Vertical Search
The Future of Shopping ComparisonI posted some thoughts on the future of shopping comparison at the Search Engine Watch Forums.
The Future of Shopping Comparison
FatLens get Fat Funding (IM2 gets VC)IM2 Inc. closed first-round funding of $8 million. (TheDeal.com) Im2 uses its FatLens shopping search technology to aggregate results from around the Web. You can sneak a peek at how they apply this technology to the event-ticketing industry at www.fatlens.com. article via: Search Engine Watch
FatLens get Fat Funding (IM2 gets VC)
Shopping Comparison Partner ProgramsAsk any smart affiliate manager and they will tell you that "no-name" affiliate partners are capable of pushing more volume than many of their big-name bizdev counterparts. eBay knows this. They offer innovative tools to turn smaller partners into million-dollar producers (see: March 31st, 2004). In contrast, many shopping sites seem content to reward a select group of bizdev partners with run-of-the-mill co-branding. So, with no shopping comparison site currently breaking away from the pack, who will be first to introduce an eBay-like partner program to try and break the game wide open?
Shopping Comparison Partner Programs
2004 Online Shopping Trends From Shopping.com2004 Shopping.com Consumer Demand Index Year-End Wrap-Up includes:
2004 Online Shopping Trends From Shopping.com
Online Shopping's "Channel Share" Increases During HolidaysPatricia Seybold reports that online sales made up 10.5% of holiday sales -- which The Tech Report says is much more than its share of total sales -- and at least 30% of holiday sales were research online. Also, from Seybold's "Cross-Channel Shopping Shines in the 2004 Holiday Season" PDF: "...our research shows that many online shoppers actually spent more time learning about the features and options of particular products, and checking to see which merchants had particular products in stock, than they did comparing products on price alone."
Online Shopping's "Channel Share" Increases During Holidays
Shopping Search & ROI/ROAS (PowerPoint)Matthew Ledford's PowerPoint presentation from Shopping Search Tactics at SES Chicago is now available from ydesigns.com: Shopping Search & ROI/ROAS (.PPT)
Shopping Search & ROI/ROAS (PowerPoint)
Online Shopping Trends in the Year of the WomenStatistics included in Business Week's artice, Holiday E-Tailing's Year of the Woman: "PriceGrabber, for one, saw spikes of 149% in jewelry, 239% in apparel, 153% in home and garden, and 313% in flowers, making consumer-electronics' gains of 121% look measly." My gut feeling, based on my experience in collecting and comparing shopping resources in a wide variety of categories, is that high-growth areas like home & garden are lagging behind established areas like consumer electronics in the breadth and depth of their comparison shopping resources. Perhaps that gap will narrow before the next holiday shopping season.
Online Shopping Trends in the Year of the Women
The Year in Shopping Search 2004March Yahoo acquires European shopping engine Kelkoo. Google addes Froogle tab to the Google home page. June NexTag launches comparison shopping for the United Kingdom. Shopping.com launches Smart Buy feature. PriceGrabber expands reach to United Kingdom and Canada. August SES San Jose holds sessions on Shopping Search Tactics and Meet the Shopping Search Engines. ValueClick announces and completes the acquisition of PriceRunner. StepUp.com launches its local online shopping service. ShopLocal.com launches its local shopping search service. PriceGrabber expands its comparison shopping service to U.S. Hispanic and Latin American audiences. September PriceGrabber provides candidate comparison engine for 2004 elections. Amazon.com’s A9 search engine offers a 1.5% shopping discount on Amazon.com. Organized Shopping quietly launches its index of comparison shopping resources. October Google announces Froogle for the United Kingdom. Exava acquires the become.com domain name and starts spidering the Web. NexTag launches ServiceShopping for Mortgages, Travel, Cars, Real Estate and Education. November Bizrate.com changes its name to Shopzilla. LiveDeal unveils its localized online marketplace. Google announces the Froogle Wish List. Google announces Froogle Germany and Froogle Store Ratings. December SES Chicago again holds multiple sessions on shopping search. Google aggregates snippets of product reviews from around the Web.
The Year in Shopping Search 2004
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