Last week I kicked off my merchant coverage by interviewing Evogear. This week, it’s SewellDirect. If you need USB adaptors, HDMI switches, or a PC to TV Converter, make sure to visit the site.
Background
SewellDirect is based in Provo, UT. I spoke with Preston Wily, VP of Marketing, who wrote a great piece on his blog last year pushing shopping comparison engines to take the Overture road and create a real PPC market place as opposed to using prohibitive price floors. I also followed up with Cameron Gibbs, Marketing Manager at Sewell who is directly responsible for the PPC and comparison engine marketing channels.
Sewell is a fairly recent entrant into the e-commerce world (2002), but the company itself has a rich history. Founded in 1983, things took off a couple years later with the release of a file transfer software program now named FastLynx. This was the core of the company for 20yrs. While the software is still selling, back in 2002, it made sense to add some products like cables to the site. People started buying this inventory and the rest is history.
How many people work at Sewell?
25 in the e-commerce group.
How many products do you sell?
We have over 1000 SKUs, but we have dedicated copywriters actively adding products.
What marketing channels do you use?
We do a lot with PPC. We’re on Yahoo! Search Marketing and Google Adwords. We killed our accounts with a number of the smaller PPC engines like Looksmart, IndustryBrains, Enhance, etc. We do SEO. Shopping comparison engines. We send email blasts to our database of customers (generally highlighting new products or features). It’s a double opt-in list. We have a physical catalog which we send to existing customers (it’s quick and dirty and focused more on volume buyers). We have some big companies that are on contract with us, so we also have one person on those ‘warm’ contacts.
Which marketing channels work? Which don’t work?
Everything that I mentioned has a positive ROI. Search engine marketing is where it’s at. Without the SEO and PPC we wouldn’t be big enough to stay in business. We have written our own bid management system that we plan to release. There are problems with the current programs out there. For example, somebody does a search online for a generic term and click on our ad. Later, instead of coming directly to our site, they search for our brand name. Most tracking software says that the second click is important. I want to be able to spread the ROI over those two clicks. That seems like tracking 101 and none of them have done it well. We tried working with Atlas and WebTrends on this, but they wouldn’t [customize] their software for us. I don’t think the current bid management programs are built for internet retailers.
When did you start using shopping comparison engines?
We started from day 1, back in 2003 we signed up with Pricewatch.
How would you rate yourself on a scale of 1-10 in terms of overall knowledge of shopping comparison engines?
Before I met you, I had written them off. But I have taken a second look. I would rate myself a 5. I have learned that you can do well on almost any engine as long as you’re willing to track your ROI and trim what is not working. Also, what works on Shopping.com doesn’t necessarily work on Pricewatch.
Which comparison engines do you advertise on?
Mainly Pricewatch, Yahoo! Shopping, and Froogle. A little bit on Bizrate (Shopzilla), NexTag, and Shopping.com.
How many products do you list?
It depends on the engines. We have over 200 on Pricewatch. On others, we have 50 or even just 10.
What resources do you have dedicated to working on the shopping comparison engines?
Cameron Gibbs manages our marketing on the PPC engines as well as the shopping comparison engines.
How are your feeds built?
Originally we spent about 3 months working with our programmer to create the feed and optimize it. Right now it’s 95% automated. Every time we’ve built a new feed, the programmer has built it for us. As for categorization, we choose whatever category we’ve chosen on our site.
How do you submit the feed (automated, FTP, by hand)?
Most submission is automated, but we’re FTPing a couple by hand.
How do you track the results?
The application we’ve written tags everything with a unique code. It appends a unique identifier for each campaign. To see our costs on the shopping comparison engines, we have to login. If we could open the API, we could see billing and click information.
Do you add your logo, phone number, etc.?
We do our logo on the majority. Phone number we do. Marketing messages, not really.
What type of relationship do you have with the engines (talk with account manager frequently/self serve)?
It’s pretty much like Google. They take your money and that’s it. I wouldn’t expect service from Froogle [since it’s free]. It seems like customer service is not valued very much by the companies which we do our feeds with.
How do the shopping comparison engines compare to other marketing channels?
I don’t understand why they can’t use a more holistic model like Google. Do these guys understand economics and how markets work? [If the shopping comparison engines got rid of price floors], everything would be bid up to a competitive equilibrium. Some of these companies charge you a lot to sign up [PriceGrabber has hefty sign up fees]. Why not implement a paid model with no minimum price floors? That’s the model that makes sense. They know if they give you a taste of the stuff for cheap or free you get hooked and you have to use them. Pricewatch gives you a free month.
How do the shopping comparison engines compare in terms of revenue generation?
They are not even in the same ball park [compared to PPC]. If you’re in a low margin, competitive industry, you can’t make shopping comparison engines work with a $0.50 minimum click. If you have a $5 margin on a lot of products, that means you have to make [a sale] on every 10 clicks. 10% conversion rate is unheard of.
How about optimization work (refining which products you list, testing out different tiles/descriptions, etc.)?
I feel like we do it to some extent. If a product doesn’t sell, we kill it. But going in and making the changes? No. It’s an opportunity cost and when PPC is generating much better results, I think we were better off not making these changes.
Do you view the shopping comparison engines as a necessary evil or a valuable partner?
The answer is a mix of the 2. The ones on which we’re doing well, we have a very positive ROI. If they continue to jack up the price floors, though, they are evil, and I won’t use them. Maybe it’s because of the industry we’re in…we have to go against companies like BestBuy who are branding [and therefore able to spend more per click]. Minimum price floors, though, are their fault, and I think it’s counterproductive.
Rank the shopping engines in terms of effectiveness.
Froogle, Pricewatch, and Yahoo! Shopping do well.
What don’t you like about the engines? How could they do better?
They need APIs so we can pull the costs into our own database and match the clicks. I want the shopping comparison engine equivalent of the Adwords API. That would be invaluable to us. With Adwords, they aren’t pushing the data, but we have a service that pulls the data. I’m not saying the comparison engines should push, but at least open up an API so our guy doesn’t have to go in and grab the data. There’s opportunity cost to doing that as he should be working on other, higher ROI channels.
For niche products, the results on the shopping comparison engines aren’t relevant. Do a search for ‘usb to serial’ on Shopping.com. The results are terrible. Instead of bringing up niche products, [Shopping.com] brings up mainstream products. If you could bid on a search term like you can on Google, though, it would make sense.
Shopping comparison engine algorithms are really bad. They are completely missing a huge part of the market.
What do you like about the engines? What are they doing right?
I almost wish Froogle weren’t free. It would get rid of a lot of noise. If Froogle used an Adwords bid engine, it would be THE shopping comparison engine.
What would be your top tips to someone just starting out on the comparison shopping engines?
1. Start with one and learn how it works. We originally jumped in with both feet on a lot of engines, and we weren’t tracking. We didn’t realize how much they could cost. Watch [your listings] like a hawk and tune them and tweak them. It’s not rocket science, but it takes a good understanding of margins and returns.
2. Make sure you’re tracking.
Related Posts
-Merchant Interview – Nathan Decker, Evogear – March 6, 2006
-Data Feed Optimization
