Retail Performance Marketing - The Mercent Blog: CSE Best Practices: Bid or let die

By Glen Hamilton

Oceans of digital ink have been spilled on the topic of cost-per-click (CPC) bidding for ads on the major search engines; Google, Yahoo! and MSN. Comparatively, little has been written about CPC bidding strategies on comparison shopping engines. This post is the fourth of nine on Comparison Shopping Engine (CSE) best practices. We'll address the topic of CPC bidding on shopping search engines.

To bid or not to bid…

Is that the question? I think it is. Most merchants we talk to do not bid. They are busy managing bids for keywords campaigns on the major search engines… and feel they don't have time to log in and tweak their campaigns on the CSE channels. This is unfortunate, as the major CSE channels collectively can easily give you as much or more traffic than a channel such as Yahoo! Search Marketing and with a lower cost per order than either Google AdWords or Yahoo! The good news is that platforms such as Mercent Retail and service providers such as Mercent Performance can take this burden off the back of the retailer.

Category or product level?

The comparison shopping engines that do allow bidding either allow the merchant to put in a max CPC (or in some cases CPA) bid amount on the CSE shopping category level, product level or both. Shopping.com is a comparison shopping site that allows merchants to place bids on the category level only. BizRate/Shopzilla by contrast allow both category and product level bids.

Be a MASS merchant

If you're doing your own online marketing management then always make a simple system (MASS). Bidding is so much easier if you have a simple systematic approach. For bids on CSE channels here's an example of critical MASS (this assumes that you have a CSE specific tracking system that calculates ROI on each product listing using timely ad spend data).

Establish a CSE success metric (ROAS, % of Ad Spend, GMROAS, etc.) with a minimum success threshold value
Force rank your product listings based on their performance against your success metric
Determine a 'break even CPC' value for each product listing relative to your success metric threshold value
For listings above your minimum success threshold bid up the max CPC in small increments
For listings below your minimum:

Exclude the worst performing listings
Aggressively reduce bids on the remaining SKUs
Edit the content and offers of the remaining product listings to improve their performance

Rinse and repeat weekly

This approach is very simple and will make you money immediately.

Caveats

Clearly, using multiple success metrics as constraints is preferable to a single metric. A second caveat is that this MASS approach works best on channels that allow product level bids. If you use this approach on a 'category bid only' CSE channel then you'll need to group your product listings by CSE category and be more aggressive in excluding underperforming SKUs before bidding up the category. It's also important to remember that advertisers with large catalogs and ad spend will need more sophisticated tools and algorithms to more fully optimize their ad dollars.

Comments

When you said that campaigns on the CSE channels result in lower cost per order...than on YYahoo! Search Marketing or Adwords...I got intrested (cause I'm always interested if I can get the same stuff for less money $$) and would like to see some numbers so I can compare how much could I save per product (approx.).

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