CSE Best Practices: Go Long or you may come up short

By Glen Hamilton

Classic marketing (actually advertising) has been about ad ‘reach, frequency and targeting’ since the serpent beguiled Eve (and Adam). Getting your message out to all the right people on earth frequently enough to have an impact is the name of the game. Online retail comparison shopping engine (“CSE”) marketing blends all the classic advertising elements together. It’s about great market reach, ad frequency and consumer targeting… with targeting both in terms of demographics (who am I?) and psychographics (what’s my purchase intent?).

So, in this last in a series of nine blog posts on CSE Best Practices I’ll focus on one element of CSE marketing which is what I’ll call ‘extended reach.’

Extended Reach as CSE Best Practice

The concept of the ‘Long Tail’ in online marketing whipped onto the scene in 2004 when Chris Anderson from Wired magazine coined the term (and sadly it has already become a bit of a cliché). From a retailer’s perspective the long tail of online comparison shopping advertising has two cords: more SKUs and more shopping channels (A bigger product catalog distributed to more shopping destinations).

A CSE best practice is to publish more product ads to more channels (the long tail) where you are maximizing the ROI on your CPC and CPA ad dollars on every one. Clearly this is difficult to do manually and this fact leads retail marketers to overly suppress underperforming product ads and neglect highly targeted and lower cost 2nd and 3rd tier shopping channels.

Mercent Retail is a platform to syndicate large assortments of product ads anywhere to anyone. What’s even more important is that Mercent Retail has the algorithms and analytics to let you do so while maximizing the ROI on each product ad. No longer will you have to cut short the number of channels you manage just because of the lack of an efficient means to manage them. Mercent Retail allows merchants to efficiently publish all their product ads to more channels than ever before.

SKU Suppression is for Cavemen

A couple Mercent competitors in the CSE management space talk a lot about ‘SKU suppression.’ SKU suppression is where unprofitable product (“SKU”) based ads are cut out of the catalog assortment published to a given shopping channel because either their ROI is negative or they are not saleable (i.e. ‘out-of-stock’). SKU suppression in and of itself is a blunt instrument that reduces the cord of the long tail of the merchant’s published product ads over time. Part of an enhanced reach strategy is to flag underperforming ads for viable products (i.e. products in-stock and available for sale) and then have an efficient way to CPC bid and CSEO optimize (edit, test and optimize the ad content for targeted keywords) those ads. In the worse case, if all optimization fails, product ads can be excluded from an assortment. Yet, even if a product ad has been excluded you need not consider that exclusion permanent and you’ll need a way to consider including them again if the offer has changed materially.

The ditch on the other side of ‘SKU suppression’ is poor analytics. The worse thing a marketer can do is to exclude a product ad from a channel assortment for the wrong reason or because of bad analytics. This topic deserves its’ own series of blog posts… but a key point is that conversion analytics should be based on first-party cookies or persistent server-side session tracking methods. Conversion analytics should be able to understand the full value of all the products the ad sold and the revenue, margin and inventory turnover contribution of each product sold. These points just scratch the surface, but SKU suppression without detailed, accurate, relevant and near-real time sales and ad spend analytics may be worse than doing nothing.

Lengthen the tail and wag the dog

Question: What good is a great ROI on your online shopping channel marketing if you don’t have a lot of sales? You want to go to market… and be everywhere all at once and have everything well merchandised and each click incrementally profitable. An effective tailing strategy with more channels and more product ads (don’t forget all your size, color, material and make/model product variations) will add a huge amount to your reach and sales online. In this case the tail can wag the dog and help you keep your online sales and customer acquisition curves convex.

Comments

[Nathan]

Interesting post, I have not heard this position. Sku suppression has worked incredibly well for me in a number of applications / channels. I think of it the same way as I think of keyword ads... I wouldn't continue to throw money after a keyword that isn't performing so why continue to list a non performing item? I'd rather take that $ and put it toward something that is working better. There is a cost associated with testing individual products, time = money right?

For example, I have pulled this ski from most comparison engines: http://www.evogear.com/skis/icelantic-scout-sft-2008.aspx because for whatever reason I saw consistently people don't seem to have a strong intent to buy this item (probably lesser known brand, niche product, more difficult to compare, etc.). The ROI wasn't there and I will let people's behavior drive the action. However, a ski like this ski seems to do incredibly well: http://www.evogear.com/skis/rossignol-scratch-brigade-bc-2008.aspx, and so, I continue to list.

I try to do this on a macro level without micro managing any particular sku. Let the numbers do the talking. This global strategy improved ROI significantly and reduced the management of the channel by 50 - 60%.

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