On Friday @ 5:15pm, Shopping.com announced some category minimum decreases and some category minimum increases.
OUCH! A Pre-holiday shopping season increase in some category minimums.
Ok, good news first. Beginning October 1, Shopping.com will decrease the category minimum CPC rates for Books, Music, and Video (BMV) as well as Car Seats, Cribs & Bassinets, Strollers, and Watches.
Now to the bad news. Beginning October 1, Shopping.com will increase the category minimum CPC rates for Auto Parts & Accessories, Clothing, Cosmetics, Furniture, Garden, Handbags & Wallets, Health Aids, Home Furnishings, Jewelry, Kitchen, and Personal Care.
Not sure yet if there will be additional rate increases November 1, when they usually take effect for the holiday shopping season.
So why would there be rate increases now? Here are some thoughts:
-These are early rate increases for the holidays. While holiday shopping doesn’t actually start for another couple weeks, the trend is for the holiday shopping season to start earlier and earlier. This is possibly a reflection of that. Last year’s increase was announced in early October and went into effect November 1.
-Shopping.com is giving away too much of the pie for syndication deals – when negotiations start at 80%+ for partner deals, Shopping.com needs to find new ways to make money.
-Adwords rates are generally getting more expensive for Shopping.com. The Quality Score for Adwords depends partly on the click-through rate (CTR) of the advertisement. More Google Checkout icons are showing up on merchants’ Google Adwords listings, so I wouldn’t be surprised if Shopping.com and the rest of the shopping engines are seeing their minimum bid requirements increase.
-Another factor for Quality Score is the quality of the landing page. When the first 5 listings and the last 5 listings on a page are Google AdSense listings, I have a feeling Google doesn’t consider that page so relevant. Here’s an example of a landing page for a Google search for ‘Prince Tennis Racket‘.
-This could be an attempt by Shopping.com to move more of its merchants to the new Buy it on Shopping.com program.
Now as for the decreases in click rates:
-BMV is a very low margin group. I wouldn’t be surprised if Shopping.com was having trouble attracting and retaining merchants in this category. However, Shopping.com also needs to make it easier to submit BMVs – there shouldn’t be a separate feed necessary.
-As for the baby goods, not really sure.
-As for the Watches, maybe Shopping.com was just too out of line with the going industry average of $0.50/click.
Again, I’ll let you know what Shopping.com says when I hear back from Tomer. Oh, and Shopping.com, you really need to get your phone tree up and running. Couldn’t figure out Tomer’s extension and only 1 person (in Ops) answered his phone @ 5:45pm on Friday.
