Marketing trends online will always follow consumer behavior. A good example is the growing “influencer networks” that are popping up. The millennium generation tend to care more about what some 20 year old influencer think about a product than actual real and unbiased reviews on Amazon. This has led to a significant increase of new “influencer affiliate networks” popping up. Rewardstyle (global), Brandreward (global) and Apprl (Scandinavian) to mention some.
However: this article is about price comparison websites. You probably know that an awful lot of consumers do care about getting value for money when they shop online. And when a lot of online stores offer the same product or service, the demand for “price comparison websites” has significantly increased.
What are price comparison websites and how do they look?
As mentioned in the paragraph, they are platforms that gather price information from a wide range of online web shops – and rank the various websites based on their price.
This is how they look like:
The screenshot is taken from Pricerunner Sweden, and I have highlighted the two elements that always is included in a price comparison site:
1) Standard (and specific) information about the product and 2)
a list of online shops offering that product – with their price included.
In many cases, you will also find information such as whether or not the product is in stock, whether or not an online shop will charge you additional shipping fees, customer reviews of that shop, and so on and so on.
The most famous price comparison site is Kelkoo – and they do have localized websites all over the world.
What do you need to know before advertising on these websites?
Personally, I have quite tremendous experience with price comparison sites. Not only do I own one of them myself, but I have also been running several successful campaigns through them as my job as an Affiliate Marketing Manager for a huge online retailer. In other words: I know what works and what doesn’t work.
1. Comparison Shopping websites give you new customers and incremental revenue
Remember that people want to buy the product – they don’t necessarily want to buy the product from YOUR shop. When people go into these price comparison websites, they blindly choose the option that saves them the most money. In other words: these are not customers that already know about your store.
After partnering up with some high-level comparison shops in Scandinavia, we ran an analysis on the customers we gained from them. It turned out that more than 90 % were new customers, which is quite a remarkable number. These websites will simply open up a completely new revenue stream for your company.
2. Can you beat your competitors on price?
If not, you are in trouble. From my experience, the cheapest store will win the customer in about 95 % of the times. And the last 5 % have most likely already purchased at another store and feel more secure by doing a second purchase with them.
If you know that your competitors are cheaper than you, you wont have much chance on such websites. That is the hard truth. However, there is one way you can cheat….
3. Have you heard about “Dynamic pricing”?
Did you know that you can give different price to different customers dependent on the traffic source? Many people are unaware of this option. But the large e-commerce companies are very much in love with this type of technology.
Let me give you an example of how it works. Terry and Tommy are both interested in buying the same product.
1. Terry goes into www.productexample.com and makes a purchase. He knows the website from before and is happy to pay 9,99 USD.
2. Tommy wants to save money. He goes to a price comparison website and types in the product name. He can see that your web shop got the cheapest price – only 7,99 USD!! Once he clicks on the link, he can save 2 USD – without even knowing that Terry had to pay more for the exact same product on the exact same day.
Does this sound like science fiction? It’s not.
However, it is a quite controversial way of running an online business. One of our competitors were doing this extremely aggressively. They would probably have between 20-40 % cheaper prices through comparison shopping websites (new customers) than for customers that simply landed on their website (mostly existing customers). The reason for that is that they were willing to pay significantly more for a new customer, which is fair. However, they were caught by their customers and discussion forums and Facebook were flooded by angry customers who said, quote: “We will never, ever buy from this company again!”.
Example: Dynamic pricing
I was able to find a typical example from the contact lens shop Lenson. First screenshot is taken from the biggest comparison shopping website in Norway called Prisjakt, the second screenshot is taken 1 minute after (from a different browser) on their website:
4. Cost-per-click (CPC) or Cost-per-acquisition (CPA)?
Between 2001 and 2018, most comparison shopping websites only offered one financial structure to advertisers: cost-per-click. Every time Terry or Tommy went into Kelkoo and clicked on your link, you would have to pay Kelkoo for that click. If your website converted badly or for some reason you received “bad traffic”, your return on investment would be rather poor.
However, many comparison shopping websites are now also working with CPA. That means that they will get paid a fixed percentage of every sale – like a normal affiliate marketing publisher. To illustrate how that would work, I will use an example with Tommy again:
– Tommy goes into Kelkoo and finds your product.
– As you still have the cheapest product, he makes a purchase for 8 USD.
– A normal affiliate commission could vary between 5 % and 20 %. Lets say that Kelkoo got 10 % in this case.
8 USD * 10 % = 0,8 USD. This is what the comp. shop would keep from that sale.
The advantage with working on a CPA model versus working on CPC is quite obvious: you have much bigger control of your cost. I still remember one day that I woke up and checked the statistics of one of our comparison shopping websites in Australia. Apparently they had been running some type of campaign, which gave more than 1000 click in one single day. No conversions. And yes – we were working on CPC back then. Costly.
In order to get listed on these websites, you need a product list/feed. You can read more about such feeds here (Wikipedia link).
As the different platforms display different type of information to the customer, each feed need to be unique. This is why you very often need some technical assistance to make this happen.