CSEs or Marketplaces – What’s the difference?
When you advertise your products, what do you use? Do you use comparison shopping engines (CSEs)? Do you use Marketplaces? Are you confused by the question because you thought CSEs and Marketplaces were basically the same thing?
You’re not alone.
Many advertisers either believe that CSEs and marketplaces are the same thing, or they assume the differences are essentially negligible. But knowing the differences between these two marketing tools will help you make the right choices when it comes to advertising your products.
What is a Comparison Shopping Engine (CSE)?
CSEs work on a CPC (cost per click) model. Examples of CSEs include Shopzilla, Shopping.com, Google Shopping and PriceGrabber. These engines charge you – the advertiser – once a shopper clicks on your ad. That click by the shopper sends them to your website for checkout.
Products are grouped based on keyword searches, which results in products with the same SKU being listed on comparison pages. Customers get a clean, fluid shopping experience, and are able to compare specifics on each merchant based on product price. Merchants, on the other hand, are given exposure for their products.
The fact that shoppers are led to a merchant’s site for checkout is an attractive feature. Being sent to a merchant page for checkout means that you – the merchant – can encourage a shopper to make further purchases. You can also design pages that help expose your brand and products to the shopper.
Also, when a shopper is sent to a merchant page, merchants now have the capability of capturing customer information, which can be used to create future sales.
What are Marketplaces?
Marketplaces (like Amazon, Newegg and Rakuten.com) are similar to CSEs in that they provide shoppers with one location to search for many different products. In fact, as far as the enduser (shopper) is concerned, there is essentially no difference between a marketplace and a CSE. Shoppers can still shop around based on variables such as price. The difference, however, is noticeable on the side of the advertiser.
Marketplaces aren’t CPC
While CSEs run on a cost-per-click model, marketplaces earn their dollars a different way. They charge merchants a percentage of each sale. This one difference between marketplaces and CSEs is a profound one. It will (and should) dictate your marketing strategy.
Marketplaces also don’t handle payments the same way as CSEs. The checkout experience in a marketplace takes place entirely on their marketplace site (with Amazon Product Ads being an exception). This robs you of the opportunity of capturing vital customer information.
So what benefit does a marketplace offer? Well, take Amazon as an example. Amazon’s reputation and reach is so widespread and deep, it’s impossible to ignore the type of loyal customer base it boasts. Customers trust sites like Amazon because of the standardized shipping and return polices, and customer-first approach to shopping.
When it comes to marketplaces, as a merchant, it’s your job to be vigilant with your listings. Any incorrect information from your feed is your fault, and not the fault of the shopper, meaning you’ll have to fulfill your end of the bargain – no matter what – if a purchase is made.
Another benefit of marketplaces is the lower upfront risk. Because marketplaces work on a commission-based payment, there are no upfront risks. You only pay when you’re getting paid.
Which is Right For Me? CSEs or Marketplaces?
Chances are you’re the type of merchant who would benefit from both CSEs and marketplaces, depending on your niche, product line and more. Diversification is the key. With a well planned diversified strategy, you can maximize your product exposure while minimizing your risk and costs. Knowing how, exactly, to diversify your portfolio can be a challenge. Studying market trends, past history and other analytics can give you an idea of how to proceed; however, chances are you’ll want to revisit your strategy periodically.
OperationROI can help you create a diversified strategy that uses both CSEs and marketplaces to your advantage. Call us at 1-888-277-5429, or fill out our contact form , to learn how we can help you make the most out of CSEs and marketplaces. And share with us your experiences using CSEs, marketplaces, or both.