There’s a fascinating article on Wall Street Journal about an anti trust case building up where comparison shopping sites like Nextag, BizRate and LeGuide, are losing money based off of the way Google displaying a product search.
If you were to search for “samsung 4k tv” in the past, sites that were mentioned would have been listed so you could compare the prices.
Today, Google displays the product on the side:
If you notice, the ones with the pictures and the TV are displaying retailers that sell a TV and the price points side by side. A price comparison site was supposed to take care of that. When a shopping compares prices and are ready to purchase, they would click through the link and buy. The site would earn their affiliate income through a deep link to the product. Similar to how I mentioned bloggers making money from another Wall Street Journal article.
Quoting from the article:
LadenZeile, a comparison-shopping site run by Visual Meta, saw a 60% slump in traffic in Germany in late 2012, after Google changed its search algorithm. That caused a similar drop in revenue, according to Robert Maier, founder of Visual Meta.
That is a tremendous drop in traffic.
What I Think Of It All
These sites made it their business to provide engines to display prices all around so they could earn affiliate income. It makes perfect sense and also made sense to build and reinvest into it. Like the article mentioned, there are the Amazons and eBay’s where you can buy the same product cheaper because the shopper has become savvy. You might question, the shopper is savvy and therefore needs to rely on the comparison shopping site. That’s partially true because that’ll help the search quicker, but I think these shopping sites are losing because the shoppers are really savvy. I can remember just four years ago I did not know about using a portal payouts. I used to do a comparison shop then click through and make the purchase. Now everything I buy online is through a portal. I will continue to shop around and look for the best prices, but ensure a portal is used to earn back a refund. I’ve run into a handful of people who I would never think they know about a portal, so I dumb things down entirely and at the end they ask “So it’s something like an ebates, right?”
The one thing I do agree with the sites is:
“Google has the power to destroy a company’s existence,” he said in a September presentation on European e-commerce competition in Brussels.
Google argues that its actions had nothing to do with the decline of comparison-shopping sites. It said the trouble at those sites was caused by a broader revolution in online shopping in recent years. More consumers and merchants choose to buy and list products via Amazon or other direct-sale sites, rather than visiting comparison sites, Google said.
And just like the article, Google is right in their arguments, there is a broader revolution in online shopping. Sites like Cardpool, Giftcard Zen, or Raise are on the markets helping consumers save even more on products when you can use discounted gift cards.