Comparison Shopping Overview

August 26, 2008

Digital Marketing ChannelAdvisor By ChannelAdvisor

Comparison Shopping Engines (CSEs) are product marketing websites that display aggregated product offerings across multiple retailers. Examples include Shopping.com, Nextag.com, Shopzilla.com and PriceGrabber.com. Consumers often visit CSEs to find the most attractive offer on a product they have already determined they want to purchase. However, some consumers will also use CSEs as part of their product discovery and research process. Once on the CSE, the consumer is able to evaluate various offers from multiple retailers in one place, saving time while finding the best value.

CSE traffic is important to retailers because it represents a sizable set of internet users at some point in the buying cycle, and therefore in the retailer’s target audience. Most CSEs (including all the examples above) charge retailers on a per click basis. Every time a consumer clicks on the offer of a certain retailer, that retailer pays the CSE. The actual amount charged for each click varies by category and by CSE. On many of those CSEs that have this cost-per-click (CPC) pricing model, the retailer has the ability to increase the rate they are willing to pay for each click in exchange for increased visibility on the CSE. There are a few CSEs that are free, two such sites are Google Product Search and TheFind.com. In addition, other CSEs, including Microsoft Live Cash Back, charge not on a cost per click basis but on a cost per acquisition basis, meaning it collects a percentage of the sale price when a consumer makes a purchase.

In order for products to appear on CSEs, retailers must send a product data feed to each CSE on which they choose to advertise. The exact layout of the data feed varies by CSE, but all CSEs require a product price, title, description, image URL and action URL that links to the product page on the retailer’s website. The CSE processes the data from the feed into their system and displays the product information for consumers to search or browse through. When the consumer finds what they are looking for, they click on that offer and are delivered through the action URL to the retailer’s website.