Retail Performance Marketing - The Mercent Blog

Mercent FY2010 Financial Results are In (and Up!)

This morning, Mercent released highlights of our 2010 fiscal year.  It was another formative year for the company -- and sets a good foundation for an even better 2011 (where we're all focused now that last year is ancient history).

Here are the key metrics from this morning's press release:

Focused on ensuring retailers are visible, competitive and profitable wherever consumers shop online, Mercent delivered another year of positive business performance representing record gross merchandise value (GMV) sourced and tracked for its portfolio of tier-one, brand name retailers. Operational highlights are as follows:

• Achieved record consolidated GAAP revenues in FY2010

  • 70% (1.7X) year-over-year GAAP revenue growth for FY2010

  • 5th consecutive year of annualized GAAP revenue growth exceeding 70%

  • 5th consecutive year of accelerating annualized GAAP revenue growth

• Achieved record aggregate client gross merchandise value (GMV) in Q42010 and FY2010

  • 172% (2.72X) year-over-year GMV growth in FY2010

  • 5th consecutive year of annualized GMV growth exceeding 75%

  • 5th consecutive year of accelerating annualized GMV growth

• Expanded enterprise retailer client base with the addition of new tier-one retail brands including Signature Styles, The Land of Nod, DSW Inc., Welspun USA, and many others.

• Expanded online marketing reach and revenue-generating capabilities.

  • Introduced new profit-generating Mercent Retail™ programs for Google, Amazon, eBay, Microsoft Bing and others.

  • Introduced new online retail sales channels, including the availability of social shopping merchandising via Twitter, Facebook, MySpace, Ning, Bebo, and other social sites.

  • Delivered new, innovative and revenue-generating Mercent Retail™ platform capabilities, including the widely adopted Mercent Retail™ Price Optimization Engine, and expanded support for the Google Affiliate Network, Google Product Extensions to AdWords, and Google Product Listing Ads.

• To accelerate software engineering investment, expand services, and accommodate client portfolio growth, increased company full-time head count in FY2010 by 76%.

 

http://www.marketwire.com/press-release/Mercent-Reports-70-Revenue-Growth-Record-FY2010-Results-SAAS-Digital-Marketing-Software-1388308.htm

 

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.

CSE Best Practices: Map Well, Map Strong

By Glen Hamilton

Products presented in ecommerce catalogs are logically grouped together for convenient browsing. These product groups are commonly called product categories. The set of product categories for a given electronic catalog is called the taxonomy of the catalog. The process of assigning products to categories is known as category mapping.

When data from a merchant's ecommerce catalog is published to a comparison shopping engine ("CSE") the CSE will then need to map the merchant's products to the taxonomy of the comparison shopping site. Most first-tier shopping sites (such as Shopping.com, NexTag, Shopzilla and Pricegrabber.com) require (or highly recommend) that the merchant map their products to the taxonomy of the CSE. Obviously this can be a challenge for the retailer.

This post, the eighth in our series of nine CSE 'best practices,' will talk about CSE category mapping and ways to make the process efficient and the outcome optimal.

Map Categories not Products

When creating a data feed for a CSE shopping site the merchant will want to associate each of their ecommerce product categories to a product category on the CSE site. Many merchant categories may be assigned to same CSE category though generally it's not the other way around. By mapping categories (instead of mapping individual products) a great deal of efficiency is gained... as all the products assigned to a given merchant category will be automatically mapped to the related CSE category.

A good category mapping tool set, such as the one provided with Mercent Retail, will make creating and maintaining this category-to-category association a snap for even the largest catalogs. That being said, it's important to take some time to map your categories thoughtfully. Remember, category mapping is all about merchandising. Making sure your products are categorized correctly on the comparison shopping channels will increase your clicks and increase your conversion rate.

Map the SKUs that matter... individually

For those products that really drive the majority of your business it's wise to review the shopping channel category mapping for those products on a SKU-by-SKU basis (or UPC-by-UPC basis). If sales results are not what is expected on a given CSE channel then work with your account manager at the shopping site to find out which categories give the most traffic and sales per product listing... and which categories are the highest performing for your given set of UPC codes or manufacturer part numbers.

Be wary of 'unified' category mapping solutions

Some data feed marketing solution providers approach category mapping by associating each merchant's product categories ( and/or products) to their unique category structure and then using their category structure to map to each CSE taxonomy. This is not optimal. It's like making a photocopy of a photocopy... you lose clarity in the reproduction. It's an unnecessary layer of abstraction that mostly benefits the vendor not the merchant, CSE or consumer.

The merchant's unique ecommerce categories (and all sub-categories) should have their own voice and find their right place on each shopping portal. Attempting to unify all merchants to a single vendor taxonomy forces all merchants using these vendors to have the same CSE facing categories which makes the ability to differentiate your category mapping (and product content related to categories) virtually impossible.

Be wary of 'black box' category mapping solutions

Beyond the pit falls mentioned above of using a unified vendor taxonomy, some data feed marketing vendors will further complicate this approach by relying heavily on software to associate a given product to their taxonomy. This automated mapping process generally focuses on string comparisons of key fields and uses relevance-based product matching on part number and product content data elements.

This type of solution doesn't provide the merchant with control of the process, transparency into the results or the ability to easily test among various category mapping alternatives. It's a 'black box' that may provide value... but it also may wind up making really poor merchandising decisions on key merchant categories, on high value products, on the most important comparison shopping engines.

CSE Best Practices: Brand it!

By Glen Hamilton

Question: What do shopping comparison sites and online marketplaces have to do with retail branding?

I'm interested in your answers based on your experience. As for me, this post (the seventh in our series of CSE Best Practices) will deal with this question and offer insights from our experience with merchants on ways to leverage your retail brand on CSE shopping sites.

My opinion, based on the merchants we work with, is that branding does matters in the success of online shopping site marketing. The conventional wisdom has been that comparison shopping engines ("CSEs") diminish the value of retail branding and tilt the balance of power in the buying cycle in favor of the consumer and the unbranded direct marketer. While this thesis is certainly true to an extent, I believe that the facts suggest a more 'nuanced' answer... one that accounts for the value of a merchant's brand equity.

CSE sites as a Killer App, not a Brand Killer

With the reach of shopping comparison sites growing by over 40% a year, more and more consumers are looking to them before making a purchase decision. In fact, the rate of the growth in the use of online shopping sites is three times the rate in which ecommerce in general is growing. Comparison shopping information delivered over the Internet to mobile and desktop computing devices is clearly one of the killer web applications of our early Web generations [1.0 & 2.0].

Consumers not only use CSEs to make online purchases but to research offline purchases as well. Having an offline retail brand online at the points of highest purchase intent is a really really smart idea. This is one of the biggest reasons why branded merchants need to have a well managed presence on the shopping comparison sites.

What we find is that branded merchants thrive alongside unbranded merchants on these CSE sites. In fact they thrive in a way and to a level that is not found on eBay but appears to be unique to comparison shopping engines, including Amazon.com and SHOP.com.

Retail Brand as a CSE Marketing Advantage

Comparison Shopping Engines allow a retail brand to speak in unique ways. A merchant's brand can be given voice on CSEs with: 1) brand logos next to each product listing, 2) branded advertising banners (often appearing in contextually relevant SERPs), 3) branded site sponsorship placements, 4) branded marketplace 'storefronts' (in the case of Amazon's Merchants @ program for instance) and 5) the actual display URL of the merchant containing the retail brand name.

What a branded retailer can expect is that the power of their brand will increase their click through rate (or conversion rate if you're on a self-contained marketplace like Amazon or SHOP.com) independent of the strength of their offer. It gives the merchant an opportunity to merchandise to the consumer on their web site even if they don't necessarily have the best 'published offer' on the CSE.

The strongest marketing formula we've seen on the CSE's is: Strong Retail Brand + Strong Merchant Ratings + Best Offer. This provides a rock solid basis on which to further optimize shopping channel marketing with CSEO, CPC bidding and product & performanced-based merchandising techniques.

In summary, we find that the lack of a strong retail brand may be compensated for by strong merchant ratings and a competitive offer... but where a great retail brand is present it often takes precedence even over a stronger offer.

CSE Best Practices: Love Your Customer

By Glen Hamilton

Merchants sometimes fear that comparison shopping engines will erode their price point or dilute the value of their brand. In the results our merchants get on the shopping engines what we see is that both of these fears are overblown. Here's the reality of the situation: On the CSEs it's really not all about price, it's all about TRUST. Brand equity matters. Merchant ratings matter.

This is our sixth in a series of nine posts on CSE best practices. In this issue we'll talk about the profound value we've seen in taking care of the customer. Customers not only buy your stuff, they are unflinching champions (or demon destructors) of your brand credibility online. If you don't have time to read any further... then end with this admonition: Don't spend money marketing on comparison shopping engines and online marketplaces until you can delight your customers (and consistently earn great merchant reviews).

CSE Satisfaction surveys are your friend

Here's a simple money making formula: High customer satisfaction ratings = more sales + lower cost per order. A good brand plus high satisfaction ratings equal an unbeatable combination that will allow you to command a premium for trust and not compete on price alone.

The bigger comparison shopping sites (Shopzilla/BizRate, Pricegrabber, Shopping.com/Epinions etc.) have customer satisfaction surveys. These are javascript triggered survey forms that are easily pasted on the merchant's order receipt page at the end of the checkout process. The forms typically ask for immediate satisfaction feedback on the purchase process and then there is a follow up in a few days via email to see how the fulfillment process went. The survey responses are used to determine the merchant's customer satisfaction ratings for a given shopping channel.

It's smart to put code on your order receipt page to either: 1) rotate the customer surveys for the CSEs between all orders, or 2) serve up the javascript for the satisfaction survey of a given CSE if the customer was actually referred from that channel. I'd suggest you consider option #2. In either case, it's not good to display more than one survey form at a time.

Ask for the review... and ask for a good one.

If the CSE site has customer satisfaction reviews but not an automated customer survey process, then it's especially important to encourage the customer to return to the CSE site and leave a review (and to ask them for a positive one!). This may easily be done by providing a link back to the survey page on the CSE in all outbound emails relating to that order. Of course, it's very important to also make sure that the customer understands that you would like the chance to resolve any outstanding issues so that they may be able to give you an unqualified review.

This may seem like a radical approach to some, but if you are committed to being fair to your customers, and aggressive about establishing a base of positive customer reviews, you'll build massive brand credibility online that will result in lower costs per order/customer, more repeat sales and great viral marketing.

Read and respond to customer reviews

One mistake some merchants make is that they set up customer surveys and encourage customer reviews but they don't consistently read and respond the positive and negative ones. All reviews should be responded to, via email if the reviewer leaves their email address for the merchant (as is sometimes the case on BizRate/Shopzilla) and always publicly in the merchant response area for each customer review on the shopping portal. Responding to reviews is classy and it's savvy marketing. Respond to the complaints and leave a reply admitting blame/apologizing if deserved (never blame the customer) and telling a bit about how the issue was resolved and thanking the customer for their business! What a concept!

The BizRate/Shopzilla Circle of Excellence highlights 58 merchants who out of 10's of thousands of online resellers on that CSE achieve spotless customer ratings over a large number of reviews. Companies like these 'get it' and know that investing in customer satisfaction is 'marketing goal #1' and 'marketing 101.'

CSE Best Practices: Know Your Enemy, Track Your Offer

By Glen Hamilton

I think you've probably seen those banner ads soliciting 'mystery shoppers.' They're the hip young people who canvas the offline retail world and gather competitive intelligence and even internal G2 on the retailer's unsuspecting store employees, right? Hmmmm. In the online world there are few mysteries. Product offers, price, merchant ratings and availability are out there for all to see. Yet, many merchants spend little time gathering competitive and offer intelligence on those they are competing with online... and even less time taking action to counter the competitive threat. This post is the fifth in our series of nine on CSE Marketing Best Practices and we'll touch on the role of competitive intelligence in smart comparison shopping engine marketing.

Monitor the Money SKUs

I guess it's pointing out the obvious that merchants should focus most of their time monitoring those SKUs that matter... the X% of products that drive 80% plus of your online revenue. Those are the SKUs your competitors are watching also. Typically the less branded a merchant is [and the more direct marketing focused a merchant is] the more time that they spend in the trenches watching their competitive presence online. By collecting and acting on good CSE intelligence smaller and in some cases 'more energetic' online direct marketers can often out-flank well branded merchants in this regard.

Keyword Studies - Not just for SEM anymore

Comparison shopping sites such as Shopzilla and Shopping.com are as much search engines as Google or Yahoo. It's just that they are specialized shopping search engines. Successful paid search marketing on Google and Yahoo have long depended on understanding an ad's position on SERPs (Search Results Pages) for given search terms [keywords or phrases]. Comparison Shopping Engine cost per click marketing is really no different. For each of the 'Money SKUs' that we referred to above a short list of keywords or search phrases should be identified. These search terms will naturally be the ones that convert the best in an SEO and / or SEM context.

Each of the search terms / phrases should be regularly plugged into the search box on the most important shopping portals. From the CSE search results pages the marketer will want to answer the following questions:

1. Are my products present? If so, at what position... on what page?
2. Are my products present on the default sort of the SERPs? Sort by relevance? Sort by Price?
3. How have the position of my product listings changed over time?
4. Can I correlate the results of my CSEO work and CPC bidding to a change in product listing position?
5. Who is winning the 'smart buy', the channel's editorial product pick?
6. Who is owning the sponsored listing or preferred listing postions?
7. How can I adjust my offer (shipping, price, promotions) to be more competitive?
8. How should I adjust my CPC bidding to test the ROI on a higher position for these ads?

Where's My Offer?

Savvy marketers should not only monitor the SERPs of the search terms of their 'Money SKUs' but they should monitor the attachment of those SKUs to the CSE shopping sites. The easiest way to do this is to search on the actual product title (as a search phrase) in each of the CSE search engines. Assuming the product is in the search engine, it should also be categorized correctly and the key offer content should be current. If it's not, fix it and republish a feed to the shopping channel and make sure that the CSE is aware of any major issues.

Jellyfish Have No Scales

With more than just a few fish in the 'Sea-SE' world (ah, remember Jellyfish and PriceFish.com?), can you really hope to monitor what's going on with every Money SKU on every site? Not likely. The real challenge of CSE marketing is that it's tough to keep on top of competitive and offer intelligence on your Money SKUs on even just the big fish channels. It's a matter of scale. It's a matter of resources. Here is where a team like Mercent Performance and a platform like Mercent Retail allow you to put scales on Jellyfish (and every other CSE channel) and make sure that your offers are present, well positioned and competitive.

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).

1. Establish a CSE success metric (ROAS, % of Ad Spend, GMROAS, etc.) with a minimum success threshold value
2. Force rank your product listings based on their performance against your success metric
3. Determine a 'break even CPC' value for each product listing relative to your success metric threshold value
4. For listings above your minimum success threshold bid up the max CPC in small increments
5. 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
6. 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.

CSE Best Practices: Click-to-Profit Tracking

By Glen Hamilton

Let's talk tracking. This is the third of our initial nine posts on Comparison Shopping Engine (CSE) marketing best practices.

Data feed marketers manage to ROI benchmarks. Often those benchmark metrics are ROAS (return on ad spend), CPA (cost per [customer] acquisition), CPO (cost per order) or ad spend as a percent of sales. Some savvy marketers may even consider gross profit return on ad spend, life time value or return on inventory calculations. These are all common, useful, retail channel and direct marketing measures.

Cost that click as it happens

Tracking referred sales is easily accomplished (to varying degrees of accuracy) with web analytic tools. Tracking line item (invoice level) order detail for referred orders is more difficult, but yet it's certainly possible to do with a variety of solutions. Tracking and costing real-time CPC ad spend (click costs) is basically impossible without a platform like Mercent Retail.

Marketers tend to rely on pulling ad spend reports from the reporting system of each channel and periodically trying to reconcile channel ad spend to tracked orders. It's possible to do this reconciliation at a high level such as a per shopping channel ROAS analysis, but it is typically very difficult or impossible to do it on a per click level.

Match the cost of the clicks to the ROI generated

In other words, if a merchant wants to know the daily average ROAS of referrals (clicks) from a single or a set of product listings on Shopping.com, it's not possible to get that information today with off-the-shelf analytics. You need to use a specialty product such as Mercent Retail Analytics. 

One of the key reasons why this is important is that in order to make the conversion data from data feed shopping channels actionable you need to match the cost of the clicks with the value of the conversions they affected... matching click cost to conversion value as those events happen (in near real-time). By doing this you can automate the management of your data feed business. Without this, you will always be 'a day late and a dollar short', or typically several days late and many dollars lost in inefficient CPC ad spend management.

CSE Best Practice: CSEO

By Glen Hamilton

This post is the second of an initial nine part series on Comparison Shopping Engine (CSE) marketing best practices.

Let's start by stating a pretty obvious point:  General Internet search engines index web site content whereas shopping search engines typically index merchant product data feed content.  This blog post is focused on best practices for search engine optimization (SEO) for your data feed driven referral or marketplace channels.  At Mercent we call this type of optimization 'CSEO' or Comparison Shopping Engine Optimization.

The concepts behind CSEO are pretty simple.  If we were describing the concepts as courses in a college catalog, we'd perhaps do something like this…

CSEO 101:  Make your feed compliant

Generally each shopping channel or affiliate network has a native data feed specification.  In some cases they have more than one.  It's essential that you adhere to the specification closely and make sure the data document (whether it's a flat file or XML) is 100% compliant with the specification. 

CSEO 201:  Transform and map your data thoughtfully

Get creative with your data mapping.  Don't be afraid to concatenate, truncate, regex and generally parse and transform the data you have available to work with to match the true intent of the data field.   An example of this is using brand and part number fields to beef up a product title.

CSEO 301:  Map your categories accurately

Most shopping sites have browse taxonomies that a merchant should (or is required to) map their products too.  While mapping your SKUs to CSE categories is important, in practice, it is becoming less so.  CSE's such as Google base are abandoning category mapping in favor of Amazon.com like browse nodes dynamically generated based on the item type, product type and product attributes.  Other sites like MSN Shopping use their published taxonomy more as an indicator of product type than they do as an actual browse hierarchy.  Regardless, do your category mapping and do it right.  Be wary of black box category mapping algorithms.    Software algorithms are typically poor excuses for real merchandising.

CSEO 401:  Make your feed complete (and remember the children)

Just like a product page on an ecommerce site, a product record in a CSE data feed is really all about offer content.  Make sure you have relevant data in all the fields, whether they are required or not.  If you have parent SKUs that have child variations (size, color, material, etc.) make sure that all parents are complete and all the children have unique titles and descriptions.

CSEO  501:  Make your feed search engine relevant

Ok, now for the graduate work.  Beyond almost anything else you can do… make sure your content is search engine optimized with the highest converting keywords for a given product.  Leverage your experience (and investment) in traditional SEO and paid search campaigns to help understand what keywords really matter in driving the conversion of given product sets.  Make sure those keywords and phrases are sufficiently dense in your titles and descriptions.  This effort will pay off amazingly well.

CSEO 699:  Make it easy

By working with a proven marketing services team such as Mercent Performance, a retailer is able to achieve amazing results to the point where the incremental cost of engaging professional help is a small part of the incremental ROI achieved by putting these best practices in place (and monitoring and maintaining them over time).  CSEO on one channel (for one feed ) is hard.  Optimiziing 10 to 30 channels is not practical without dedicated headcount and specialized tools.  To achieve the benefits of CSEO at scale, it's wise to consider the help of a retail online marketing services provider such as Mercent Performance.

CSE Best Practices: Finding the perfect mix

By Glen Hamilton

This post is the first of an initial nine part series on Comparison Shopping Engine (CSE) marketing best practices. Though much of CSE marketing is unique to its medium (such as bidding for product ad placement and data feed optimization), there are a lot of other aspects to it that are quite familiar to retailers.  Many of the best practices in the CSE channel have been simply ported over from the offline direct marketing world or the retail channel merchandising sciences.

Stir the product mix

Fundamental to retail channel marketing (online or offline) is the concept of the ‘assortment.’  The assortment is made up of a set of products that will be offered for sale.  That product set is also called the product mix. 

In the constraints of the offline world where floor space, shelf space, catalog space and sales person mind share are limited… assortment planning is key to merchandising the right product mix that will achieve a retailer’s goals.  In the CSE channel, the main constraint on the product mix is ad budget.  Not every product is worth spending money on to get traffic from.  Beyond that, not every product is ready or appropriate to merchandise.  Unfortunately, some retailers are still in a position where they basically send their entire catalog to every shopping channel they are on.

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Assorted thoughts » Unfortunately, some retailers are still in a position where they basically send their entire catalog to every shopping channel...

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Creating smart assortments

The products in a merchant’s catalog need to be qualified into an appropriate assortment by filtering the available SKUs by criteria such as:  stock level, condition, price point, margin, gross profit dollars, product type and/or product category (to name a few).   Adding this level of retail intelligence to qualify the products listed on the comparison shopping sites is a key to creating smart assortments.  By doing this a retailer can typically increase their ROAS (Return on Ad Spend) and GMROAS (Gross Margin Return on Ad Spend) by 100 to 300%.

Beyond looking SKU at level criteria to qualify an assortment, it's essential that a retailer's reporting system is able to report performance metrics by SKU and by shopping channel.  Really smart channel assortments are those that are dynamically adjusted based on reported SKU level ad performance.  The incremental gains to be had in doing this are easily in the 300 to 500% ROAS range.  Frequent adjustments (preferably with every outgoing data feed) are key.  As a general axiom, it follows that the more rapid the adjustments, the higher the return.

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More assorted thoughts » Really smart channel assortments are those that are dynamically adjusted based on reported SKU level ad performance.

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From smart assortments to a portfolio view

Creating smart assortments (product and performance criteria qualified) will take you 90% of the way to optimizing your ad spend based on the assortment issue alone.   In order to fully optimize your ad budget base on assortment the retailer needs to view all their assortments published across all channels as an ad portfolio.  In fact, creating the channel specific assortments is the first step in creating an ad portfolio that can be highly optimized.

Some vendors who specialize in search engine bid optimization talk a lot about a 'portfolio' approach to keyword bid optimization.  This means that they are trying to find the most efficient place to spend the next incremental ad dollar across a portfolio of keyword ads.  This is an appealing concept and one that is rarely applied to shopping search. 

In the shopping search (CSE) channels each product listing is an ad with a specific return associate with it.  It's a bit too crude to view the ROI on just a per SKU per channel vector over time.  It's important to have a view of the best performing product listing ads across all channels and let your CPC bid dollars flow across channels to the product listings in the ad portfolio of that have the greatest potential to deliver exceptional return.