Wednesday, 28 October 2009

Nextag Increases CPC rates in major verticals

Nextag has recently announced that they have increased the minimum CPC rates in a few of their major categories as a reaction to the higher CPC rates they are paying with Google. These rate changes took effect on Monday 26th October. This hopefully means that they won't be introducing a Christmas rate ransom like the sites have done in the past. These rate increases mean that some of their CPCs are a little above the industry average, however with the categories covered the rates can be accepted (for our mercahtns anyway).

A breakdown of the rates that have changed are listed below -

Office 0.25
Office Equipment 0.22
Health & Beauty 0.30
Men 0.18
Women 0.18
Children 0.18
Furniture 0.25
Furnishings 0.20
Kitchen 0.18
Lawn & Garden 0.20
Home Improvement 0.25
Bed & Bath 0.23
Baby 0.20

Kelkoo Announces new pricing and charging model for October 2009

Kelkoo, one of the oldest shopping sites in the UK, has recently announced that they intend on changing the way they charge merchants for the traffic that they drive to retailers. This is somewhat of a bombshell for most merchants, especially as the charges are increasing the costs for no tangible increase in quality. In a market that is becoming increasingly more competitive with competitors willing to adjust their rates to accommodate the needs of merchants' ROI targets, it remains to be seen the impact that their new charges will have on merchant retention. At face value some of the new caveats to their updated contract are difficult to swallow. Sadly the vagaries of the contract leave a lot more questions than answers. The fine print of the merchant annual charges does state a maximum spend cap, which does seem illogical, as surely it is in their interests to maximise the spend rather than cap it off.

Listed below are the current stipulations that allegedly apply to all merchants, however it remains to be seen if Dell / John Lewis/ DSGI and DRL are going to accept a Kelkoo logo on their site and redirect traffic back to Kelkoo that they have probably paid for!

• 3% service fee (applicable to all merchants)
• 14 days payment terms
• Annual integration fee of:
- Basic merchants £100
- Standard merchants £300
- Gold merchants £500
• A backlink to Kelkoo from all merchants
• Mandatory Kelkoo tracking
• Direct Debit for all merchants
• Minimum monthly spend cap £500

One of the major points of the new contract that most concerns me at Onefeed is the stipulation that merchants have to use Tradedoubler tracking. We all appreciate the need for a decent tracking solution, however we cannot see the mileage in recommending a solution that simply doesn't actually meet the needs of the merchant. Let me explain...

Firstly, Tradedoubler does not offer the ability to track the CPC rate that you are paying for each click. Bear in mind that there is often a different rate for each subcategory of product that merchants advertise. Our software does exactly that! The real benefit to our merchants is that with a very accurate CPC cost combined with the sales revenue generated on these clicks you can see exactly the ROI ratio that you are generating, even down to the product level. Ultimately this means that each one of our merchants can trim those products that don't meet the cost of sale targets they want. Sadly if you use Tradedoubler you are only going to see a conversion rate that doesn't give you a true reflection of what is going on. Maybe this is my pessimism, but this is obviously in Kelkoo's interests to promote a product that doesn't expose the real figures for merchants.

Secondly, with Tradedoubler their product is truly third party, so there is no integration with your feeds and the way in which the feeds are generated. In real terms it means that you have to login to Tradedoubler to see your conversion rates and then go back to your ecommerce provider platform, find the feed and the right product to remove the badly performing item. Long process! With Onefeed you simply just click the button within the analytics and the product is removed. Or better still you set a rule that automatically removes the products for you, without you even having to lift a finger! How easy is that!

Finally, Kelkoo has full access to the data that you are supplying to Tradedoubler. The effect of this is the same as the other sites where they will use this data to increase CPC rates in categories where you are performing well. Sadly this is the case with all shopping sites where they provide a 'free' tracking tool. Ultimately you do pay for it if you do well.

In summary Kelkoo's new rates are very difficult to swallow and something will obviously need to change on their end in order for them to grow. Essentially the message as I see it is -
1. We don't want any small merchants any more (small merchants won't pay the £100 fee on top of their CPC fees).
2. We want to charge an extra 3% for doing the same job as all the other sites.
3. We need to increase our page rank and therefore our free traffic, but expect merchants to pay for this with the annual fee on top!
4. We want to make you use a tracking system that we can use to monitor your performance which doesn't really provide any other benefit above Google Analytics.
5. We don't charge enough on our CPCs but we're not sure how much we should charge so we'll add extra surcharges that make this a bit more profitable.

It's a shame that these changes have been masqueraded as a means of improving the relationship between themselves and their merchants, whereas in reality it has had the exact opposite effect. It also means that as an important source of new merchants to the shopping sites we cannot begin to recommend a site that charges more for something that should be part of the service. Surely the simple solution to all of this would be to incrase the overall CPC on their site by 3-5p depending on the category?

Watch this space....

Saturday, 25 July 2009 Announces New Rate Card Structure and Pricing

As of 23rd June 2009 has announced a major change to the way their rate card is structured and also charged. Thankfully this change has been for the better. With current market conditions as they are, a change like this has been welcomed by merchants, which alleviates the burden of high pre-recession CPC rates. Some of the categories have seen a massive drop in the CPC rate. The most notable areas to have seen drops are in computing and electronics. Televisions have seen a huge slash in the rate from 48p down to 15p or 10p (price dependant). This must be very attractive for merchants as this should give them the opportunity to try more products and keep them live for longer before removing the non-performers.

A major note of the change in the rate card is the tiering of pricing. In some category areas there are three divisions of cost. A good example of this is in clothing, where anything above £30 in value (inc VAT) is 16p a click (no change from original rate), anything below £15 in value is 8p and anything in between is 11p. At last you might say a shopping site that takes into account the value of the products you are selling! This pricing structure is replicated across quite a few categories. The actual costs for each category are in the pdf document below.

I personally think that this change is fantastic, it means merchants can advertise more of their inventory and not get penalised due to the value of the products. It has been something that merchants have been calling for and thankfully Shopping have listened. It remains to be seen who else follows suit and tries something similar. rate Card

Tuesday, 31 March 2009

Shopzilla Lowers CPC rates in response market conditions

This month saw a reduction in the minimum CPC rate for a large number of categories on the UK shopzilla site. Some might say that these changes were overdue as the rates in some categories were quite a lot more than their competitors.

The recent trend of merchants going bust and / or leaving price comparison has been a little alarming for quite a while now. It is refreshing to see a site lowering rates at a time when such an alarming number of massive merchants going bust. Online marketing is actually one of the few areas that hasn't been too badly affected. Many merchants are still seing double digit growth which is obviously aided by comparison engines.

The major areas for reduction were -

Appliances (average 30% reduction)
Computing (average 20% reduction)
Electronics (average 20% reduction)
Sports (average 20% reduction)

Most notable absentees from the rate reductions were clothing / babies and kids / home and garden. These have traditionally been Shopzilla's strongest areas, so clearly these areas are on par.

Thankfully, for me, Shopzilla still takes a lot of optimisation, which keeps me in work! When done right Shopzilla can work very well, bringing great cost of sale figures and also strong revenues, however when not done well, as with all the other sites, you pay for it. All comparison engines are still getting strong traffic figures, which always needs to be optimised. Optimisation is a key ingredient in a successful campaign.

Let's hope this is just the start of the rate re-adjustment with more to come as the recession bites deeper into our pockets. With such pressure from affiliates (with their no-risk approach) for the marketing spend I hope that the shopping sites win out.


Friday, 13 March 2009

Onefeed launch helps retailers maximize the power of online comparison shopping sites

As the credit crunch bites and shoppers increasingly turn to online comparison shopping sites for the best deal, it is even more important that retailers using these sites understand their complexities and adversities.
Each shopping site has an independent means of operation resulting in great differences between them. It is this operating difference that makes working with all of them time consuming and frustrating and this is where Onefeed, a next generation comparison shopping feed, marketing, optimization and tracking system, comes into play as the problem solver.
The core of the solution can be split into four specific categories; product feed creation; product feed optimization; product level tracking and product level performance optimisation.
Every retailer needs a data feed supplying the products that they want to advertise. The specifics of supplying this information to the shopping engine vary from site to site It is this very difference of supplying the information that often discourages retailers.
Onefeed’s system allows merchants to supply a single product feed file that can then be used to create each shopping site’s feed in the exact format that is required. This in itself alleviates a large hurdle to working with comparison sites which makes Onefeed so appealing.
Onefeed also offers a tracking system that allows merchants to track all the sales that the shopping sites send through. Comparison engines offer a redirect service whereby the products they list on their sites have direct links through to the retailers’ product pages. Every time a shopper clicks on a link from a shopping site a small charge, anything from 5p-70p, is charged.
It is imperative for a comparison site advertiser to know which products they are selling and what sales volumes they are generating from the clicks. Without tracking the clicks and sales it is impossible to know how effective your campaigns are and which sites are cost effective. Most online retailers have had their margins squeezed significantly and therefore cannot support excessive marketing spend. It is this market pressure that makes shopping sites so appealing to shoppers.
Managing Director Richard Wyatt says: ``Onefeed’s ability to identify non-profitable products quickly from campaigns means these products can be removed from the product feed. It cannot be highlighted enough the importance of removing products from the feed if they are not performing.
``There are now over 20 UK comparison sites, so keeping track of all your products across each partner is a difficult task. Onefeed has rule mechanisms that you can use to automatically perform actions on products that do not meet your targets on performance. This in itself means that the necessity for constant scrutiny is alleviated.’’
Richard Wyatt, a former Shopzilla employee , was involved in the startup of the European operation back in 2005 and has experience of both sides of the comparison shopping channel. This experience has made Onefeed into a very important system for retailers to maximize the potential of the comparison shopping sites as well as make their current activities more profitable. Onefeed has launched with a number of major clients, most notably Freemans, Grattan, Oyyy and Appliance City.
More information about the services offered by Onefeed can be found at

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