Google Ecommerce and the Future of Comparison Shopping Engines

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Google Ecommerce and the Future of Comparison Shopping Engines


By Jon Gregoire [Editor’s note: Performics is pleased to present a guest blogger today, Jon Gregoire, who is an industry colleague and an opinion we respect regarding comparison shopping engines. ] Are CSEs dead?  No. Are CSEs dying?  Well, maybe. If you work in ecommerce, odds are that you’ve heard about comparison shopping engines (CSEs).  They’re paid marketing channels where retailers can sell their products alongside other merchants, and they’ve proven to be very profitable for a lot of businesses that choose this route.  Their longevity and current relevancy, however, are in question.  When was the last time you even considered going to Shopzilla or Nextag to make an online purchase?  Perhaps a better question, when was the last time you didn’t go straight to Amazon or Google? The Relevancy of CSEs Google Shopping CSE logo Comparison shopping engines as we know them may be losing relevance (a.k.a. “dying” as we like to call it in the industry), but it depends on who you ask.  If you talk to a Walmart or Target, odds are that the revenue they generate through CSE marketing channels are somewhat negligible, ranging from 5% or less of their total revenue.  But go up to any established small to medium sized retail business with CSE campaigns and you’ll learn that revenue from comparison shopping engines is a valued business commodity.  At CPC Strategy, where we work with 200+ retailers, we’ve learned first-hand that CSEs can generate anywhere from 5% to 50% of a retail business’s overall revenue.  If you were to approach the retailer making half of their total revenues from these marketing channels and ask if CSEs are dying, he/she would probably scoff at the notion. The reality is that whether you’re a mega-retailer like Walmart or a small online retail business, it’s still beneficial to market your products via CSEs and, in many cases, both ends of the spectrum do so.  A business, regardless of size, would choose to market on CSEs, as with any other marketing effort, in order to increase their availability and maintain relevance among their market.  Any hesitation or decision not to try out comparison shopping engine campaigns is because of a lack of resources, expertise in the field, time, or faith in their profitability. Growing Google Ecommerce Google Shopping Ecommerce Traffic The profitability of well-managed CSEs, however, is no myth.  Every quarter, CPC Strategy ranks the Top 10 CSEs based on significant metrics such as revenues, traffic, and conversion rate. To say the least, Q4 2012 was a monumental quarter.  If we’ve learned anything from Banana Joe in the 2013 Westminister Dog Show, it’s that you don’t have to be the big dog to steal the show.  And Google PLAs, a.k.a. Google Shopping, did just that.  Just a quick recap:  Google trumped every other CSE in overall traffic, revenues and cost of sale (COS). Google’s growing ecommerce aspirations have been anything but secret.  All you have to do is look at some of its major moves as of late:  the switch to a paid shopping engine, Google Wallet, Zavers, and its acquirement of Channel Intelligence.  What we have is a new star in Google Shopping, backed by one of the most innovative and internet-savvy companies in the world, in the supposedly dwindling industry of comparison shopping.  What’s ironic is that if the middle tier CSEs like Shopping.com and Shopzilla were to ultimately “die,” Google Shopping would more than likely be the target for the lion’s share of the blame.  Google Shopping has been a paid CSE for only less than year and has already established superiority in almost all major metric categories. And so we reach our premier question:  Can Google’s growing role in ecommerce jeopardize the fragile future of other comparison shopping engines? A quick look at Google’s ecommerce credentials will reveal that not only could they become the dominant force in paid product listings for years to come, but they even have the tools to overtake Amazon as a marketplace (not just the Amazon Product Ads CSE).  Google has access to tens of thousands of online retailers and their product feeds through Shopping, metrics on what products are converting through Analytics, and the insight to what millions of shoppers are looking for through their search data.  The take home message is that if Google wants to do ecommerce on a grand scale, they will not fail. So perhaps this is a scary prospect to the up- and-comers in ecommerce, or really any retail business trying to permeate influence in the ecommerce sphere.  But even if Google was to become a mega-retailer and the main player in ecommerce in the future, it wouldn’t change the fact that their search engine and Shopping engine still generate massive, unrivaled amounts of traffic.  And where there’s consistently growing traffic, there’s a chance for marketing success.  Don’t be surprised to see many businesses riding on Google’s coattails with a refocus on optimizing product listing keywords and paid search ads via Adwords. Make no mistake, there is definitely consolidation in the future of comparison shopping engines.  However, to tie “consolidation” with “minimization” or even “death” would be a mistake because while the main players and the appearance of the CSE landscape may change, the market value and profitability will remain consistent.  Even though ecommerce/online sales account for only 10% of total retail sales, the ecommerce industry should only start to worry once the year-over year (YOY) increase in sales levels off, but from what we’ve seen, the projections only aim up.  Paradoxically, there will also be hope for ecommerce, particularly comparison shopping engines, as long as Google remains persistent in making Google Shopping a household name. About the author Jon Gregoire works as a Content Specialist at CPC Strategy, where he’s built his expertise on comparison shopping engines and content marketing.  Much of his focus goes towards a meta-analysis of industry trends and he’s always more than willing to start a riveting discussion on Google’s role in the larger ecommerce ecosystem.  You can contact Jon at jon@cpcstrategy.com.


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