Groupon says its focus is on the bottom line, rather than top-line growth.
The retailer uses technology from Sidecar to manage the ads it places.
This holiday season, consumer electronics web-only retailer Newegg Inc., which also sells items in other categories through a flash-sale site and an e-marketplace, won’t be spending a lot of time managing its paid advertising on comparison shopping sites. Instead, the retailer is using automated technology from online marketing vendor Sidecar to determine which ads in which spots are worth buying—and then place them, says Jacob Shin, vice president of customer acquisition for Newegg.
“Launching this during the busy holiday season means that we can let Sidecar’s technology manage and optimize shopping engine marketing as we focus on other areas of customer acquisition, which is crucial this time of year,” he says.
Sidecar’s marketing platform takes into account the price, description and other product information for each of the more than 8 million items in Newegg’s catalog and marketplace, along with how each of those items is converting on multiple shopping engines across the Internet at various times. Then Sidecar’s algorithms weigh each of those factors to make decisions, several times a day, about which products in Newegg’s catalog the retailer should advertise, on which comparison shopping engines and at what price. The technology then bids on the ads on Newegg’s behalf.
For example, for a tablet available at Newegg, Sidecar would measure such metrics as how many clicks, views and conversions its product page is receiving on the retailer’s web site, how Newegg’s price for the tablet compares to that of online competitors, and whether it is in high demand from consumers, says Steve Tutelman, vice president of business development for Sidecar. “Then our engine would decide whether that tablet is worth paying for an ad,” he says. “There’s no one point in that data that will skew the decision all that much—it’s the combination of all those factors, and it’s weighted.” If many consumers are viewing the product page for the tablet but not buying it, for instance, that would incline the system to decide it’s not worth advertising the item.
Newegg doesn’t need to do anything manually to operate the Sidecar marketing platform, Tutelman says. To set it up, a retailer needs only to add a small piece of tracking code to its web site and also allow Sidecar to access its product feed. With those two data sources, Sidecar can measure everything it needs, including getting live updates as soon as Newegg adds or removes products from its catalog, or makes them temporarily unavailable, Tutelman says.
“For a catalog our size, a programmatic approach to shopping engine management is essential if we want to give equal attention to every listed product,” Newegg’s Shin says. “We believe there are significant opportunities for growth in product advertising, and we are excited about gauging how Sidecar’s technology can increase our footprint.”
Newegg doesn’t have specific results to share about Sidecar’s efficacy in the few weeks it’s been running so far, he says, but the retailer has confidence that the technology will prove a boon during the holidays this year.
Sidecar has between 50 and 100 clients, all online retailers, its founder and CEO Andre Golsorkhi says. In addition to paid search marketing automation, the vendor’s technology can also automate e-mail marketing and on-site product recommendations, he says. It charges clients via a revenue-sharing model for ads that lead to sales, making its bids based on the return-on-investment goals a retailer sets beforehand. Typically, the cost ends up being at least a few thousand dollars per month, he says.