Confused About CSEs, Marketplaces and Pay Per Click and Pay Per Performance Marketing?

Some great technical advice from our technical friends at MerchantAdvantage, thanks Scott! - Chip

"Many online merchants are confused about are trying to understand the differences between marketplaces and comparison shopping engines. There are certainly differences in marketing strategies, financial differences, philosophical differences and many others when using either. So to make things easier here are some technical thoughts to help in regard to working with either of these type of marketing efforts..

In one simple phrase, CSEs are easy, and Marketplaces are hard. But why? You ask?

Well, the issue revolves around the fact that CSEs simply send leads to your storefront and you do the rest – which can be good and/or bad. However, to do this, a merchant must typically send a CSE their product SKU, name, description, page URL, image URL and price…or something like that. A marketplace, i.e. a Pay Per Performance site, must completely close the sale. To do that, they need all of the product information required to close a consumer sale.

Typically with a marketplace the difficulty revolves around one of two areas – Taxonomy (categories) or Options. Although ARTS (Association for Retail Technology Standards) has a document model describing one standard way to "communicate" most of this information, too few people are moving too slowly adopting this standard. But even more important than the file format and document model is the actual product content as it currently exists within a merchants’ storefront. All too often a merchant has made up information that perhaps takes advantage of their storefronts features or in some what fits the merchants’ immediate needs, but that same content could then be rendered useless when sent to external sources, such as marketplaces.

A marketplace ALWAYS has stringent data requirements, and merchants (with a few exceptions) need to be prepared to get dirty with data conversion if they wish to reap the benefits of working with marketplaces. Don’t get me wrong, our merchants do well on both CSEs and marketplaces once they work out any kinks, and I’m sure they all feel it is well worth it once they get going, as they continue to use these methods.

OK…just what kind of dirty work are we talking about? Well, it’s more than simply converting a word or phrase here and there, as Channel Management can automate that in seconds. It has more to do with prices, and SKUs changing when options are introduced. As an example, if you have a shirt that you sell, and it comes in S, M and L sizes, as well as White, Blue and Green colors, that’s not too bad. But, what if there is a different sku for each color and size? Well that actually takes our scenario from one product with options in the merchants storefront to 9 products in the marketplace(S-White, S-Blue, S-Green, M-White etc…) Hmmmm. And now what if the product also has to adjust pricing for each or any of the sizes? How can we correctly communicate that to a marketplace? Well, not at all, if your content is not accurate and categorized correctly within your own existing storefront systems.

To further complicate the matter, in some marketplaces, their document model changes based on your type of product (Apparel, sports, jewelry etc…)…creating a moving target for those online retailers that sell "everything".

Unfortunately this subject is MUCH too complex and diverse to solve in a simple blog entry, but I hope my brief remarks makes merchants aware that there are requirements that fall to the merchant which will allow a merchant to reap the rewards of the various marketplaces and CSEs.

Keep your data as organized and standardized as you can without sacrificing storefront functionalities. When you can’t, understand that there will be some dirty data conversion that will have to take place down the road, regardless of how large or small an online retailer you are."