Merchants who were introduced to online advertising through PPC campaigns, e.g. Google Adwords, often come into the comparison shopping world with the mindset that higher product placements through bidding wars with others is the best way to promote their business and increase their returns.

Unfortunately not only is this the wrong mindset to be in, it can quickly become a costly lesson to many merchants as they try to break out of their old patterns.

Below we will dispell certain myths that many new merchants have when it comes to product bidding on the engines.

Myth 1: Higher bids results in higher placements

The first misconception that many merchants have is that their product rankings on search results are mainly determinant on their bids as is the case with Adwords. However in our experiences bids have less impact in most engines than many merchants are lead to believe, and in general plays a fairly minor part of the CSE’s algorithms when it comes to sorting out the results.

This is not to say that bidding provides zero impact in a product’s placement, as the mechanism does serve a purpose–but our next point explains why it’s not necessarily beneficial to give products higher placements.

Myth 2: Higher placements is beneficial

While on engines such as Google Froogle Shopping Product Search (where traffic is all free) you would want all your products to rank as high as possible for as many different keywords as possible in order to drive the most amount of traffic to your site–on the CSE’s you want to concentrate on getting as much qualified traffic as you can.

For example if you’re listing a polka-dotted denim designer vintage t-shirt from the1950s, someone doing a search for “t-shirt” is unlikely to be in your target niche of audience, so a high placement on that result page would most likely lead to unqualified traffic and simply waste money–leading us point 3:

Myth 3: Higher investments = higher return

The adage of “spending money to make money” is as applicable to comparison shopping as anywhere else, but it’s not necessarily the case when it comes to bidding.

Simply put, higher bids will cost you more money–not only in the obvious sense that a higher bid results in each click being more costly–but it will lead to more unqualified traffic which can add up quickly.

Using bidding to your advantage

How do we use bidding to our merchants advantages then?

Quite simply, we rarely do and leave the bids at their minimum depending on what category and engine we’re listing on.

In those rare cases that we do though, for instance if we feel a merchant is not getting enough traffic on any of their products, we will increase the bid of certain products to $0.01 over the minimum, which accomplishes two things:

  • It leapfrogs that particular merchant over others with similar relevancies in their products and thereby gives them more exposure at very little extra cost
  • It doesn’t raise their result placement so high that it starts leading to lots of costly, unqualified traffic, which is certainly guaranteed to needlessly waste money.

There you have it then, while bidding can be helpful in certain situations, our experiences show us that generally it’s best to not worry or deal with product bidding at all.

Of course, handing over your comparison shopping management over to us means that you don’t have to ever worry about another product bid again :-)

Now that is a discussion worth pondering over.

Tien

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