Shopping.com Charge Premiums on PPC Based on Conversion Data

Martin James 10/08/04

Shopping.com the major shopping portal have started to use the data gathered from their 'free' conversion tracker to charge seasonal premiums on their PPC charges dependent on market segment. This is the one of the first indications that free services such as conversion tracking and visitor counting provided by advertising networks may well be used to squeeze extra revenue out of their merchants.

With a quote coming from the Chief Revenue Officer at shopping.com reading as follows: "As many students and parents prepare for the upcoming school year, we anticipate much higher shopping activity in categories such as desktops, printers and laptops. Based on our historical data, shoppers are more likely to purchase these items during this busy shopping season and merchants generally see a corresponding conversion to sale increase.... For the upcoming Back to School season and future seasonal shopping periods, Shopping.com will adjust CPCs to more closely mirror higher conversion to sale rates." Merchants need to be much more careful as to how they use such tools.

Shopping.com released their free conversion tracking tool approximately a year ago now so they have good data for a whole year and can probably predict fairly accurately when changes in conversion rates are going to occur across the whole range of their merchant advertisers.

With shopping.com's PPC being based on fixed cost dependent on market segment, it used to be easy to decide whether a shopping.com account was going to be a sensible option, now it is going to be much less predictable.

Unfortunately for individual merchants, there is little that can be done to protect against this squeeze on revenue, as it will only take a few merchants in a particular segment using the conversion tracker, to give shopping.com the data they need to extrapolate to all sites

We would guess that this end of summer premium is just a prelude to a much bigger premium for the run up to Christmas where many more people will be shopping for gifts on the internet.

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