May 24, 2006, 12:00 AM

Sponsored Article by Channel Intelligence

Imagine this scenario: You are in the elevator headed to a meeting with your executive team to present this past quarter`s ROI for your advertising spend with the comparison shopping engines. The last time you presented to this group your Web traffic was up but so were your advertising costs. What`s going to be different this time around? Will you have better results to report?

Mark, a marketing VP for a well established retailer, was in this very situation recently and felt confident about his pending presentation. His company uses Channel Intelligence`s SellCast™ Online to manage and syndicate their data feeds to comparison shopping engines (CSEs) such as Shopzilla, Shopping.com, PriceGrabber, NexTag, MSN Shopping, CNET Shopper, Yahoo! Shopping, ShopLocal and Gifts.com. Prior to working with Channel Intelligence (CI), Mark had been sending his products to the CSEs using the company`s internal IT team. Mark thought the quality of these data feeds was decent, so his biggest challenge was the lack of insight into which products were actually performing well on each site.

With SellCast™ Online, Mark was surprised by how many data quality issues were identified during the thorough data feed analysis that occurs during the initial implementation with Channel Intelligence. Through improved data quality and optimization, Mark`s products were more easily found online by consumers. He was also able to free up resources by taking the burden off his IT team to manage and track his data feeds.

With the data issues now resolved, Mark focused on the detailed reports showing the buying process from start to finish, for each consumer click from the CSEs. Mark could measure performance at the CSE, category and product level, using metrics like Conversion Rate, Return on Ad Spend, and Net Profit Margin. Armed with these reports, he could make important merchandising and marketing decisions faster and with more confidence – resulting in a more profitable program.

So how did Mark get to this point? How was he able to turn this advertising program around and make it more profitable?

As with most marketers today, measuring his company`s performance with these sites had always been important goal for Mark, but now it was absolutely critical. Even though comparison shopping engines were responsible for a large part of his site`s traffic, more of his competitors were also developing a strong CSE presence, and cost-per-click rates were continuing to increase. He was now tasked with making each advertising dollar more profitable.

Making Decisions Based on Profitability Metrics

The new profitability analytics feature of SellCast Online was just what Mark needed to provide him insight into how profitable his products were on the CSEs. These advanced profitability reports provided the essential analytical data required to make more informed marketing decisions. The reports also provided metrics to support profitable bidding for improved placement, as well as the automated delivery of product-level bids to several comparison shopping engines.

Mark`s client service manager at Channel Intelligence, Sharon, gave him additional strategies to help him focus on profitability:

Start with the Products with the Highest Sales

"Identify the 10-20% of your products that account for the majority of sales. If you improve their placement through bidding, you`re likely to see the strongest ROI and potential sales increase here," she said.

"Once you have identified your most important products, then you can separate out the remaining products into those with moderate sales and low sales."

These are the four bidding techniques she suggested Mark follow to help increase his profitability overall:

1. Product level bidding – You could pay more per click to ensure a spot in the top three or five results, so your profitable products don`t get bumped to the next page when there is a high number of results. These top positions typically enjoy higher clicks and conversion rates.

2. Category level bidding – When you are looking to identify potentially profitable products among those with moderate sales, you can try removing product level bids to see which ones become profitable at the category minimum CPC rates.

3. Zero bidding - set your bid to zero for products when the category minimum CPC rate is determined to be unprofitable. "Your product probably won`t be listed, but some shopping engines may list it at no cost if the product or your brand will help them round out the product category at the CSE," Sharon told Mark.

4. Product suppression - You can also eliminate click costs for products that don`t meet your required profitability levels by removing the product from the data feed sent to any shopping engines that don`t support zero bidding.

After following these steps Mark was able to identify some products that appeared to be unprofitable at first glance, but actually turned profitable at a lower cost-per-click. And he was also able to save costs by setting unprofitable products with lower sales at zero bids or by suppressing them altogether.

The Key to Comparison Shopping Engine Profitability: SellCast™ Online

SellCast™ Online combines a proprietary Comparison Shopping Optimization process and profitability reporting to provide a solid basis for decisions, so retailers can channel their investment into the click costs that will bring them the greatest profitability with the CSEs.

Now, enjoy these advanced SellCast™ Online reports for more profitable decisions:

Profitability Reports : Advanced performance metrics including Return on Ad Spend and Net Profit Margin, with analysis at product, category and CSE level.

Trend Reports : Snapshot of data over time.

CSE Reports : Summary of clicks, sales, and conversion rates by CSE.

Category Reports : Detailed breakdown of clicks, sales, and conversion rates by retailer category and CSE.

Product Reports : Detailed breakdown of clicks, sales, and conversion rates by product and CSE.

Related Sales Reports : Lists all products sold in the cart as a result of the lead product initially clicked by the consumer.

Visit www.channelintelligence.com or call 866.559.2300 x2393 to learn more today.

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