It’s no secret that Amazon has dominated the internet retail arena in the past decade, and furthermore, that Google has not-so-secretly been building its e-commerce interests over the past few years. Perhaps even more well-known is the retail glory that the Holiday shopping season can bring for the thousands of merchants that prepare for it.
But what remains a mystery is a clear-cut moneymaker during this crucial time period we call Q4. In CPC Strategy’s quarterly comparison shopping engine (CSE) rankings, some interesting revelations were made in the crucial metrics that every internet retailer should be aware of.
An analysis of significant retail metrics such as conversion rate, traffic numbers, and average cost per click reveals that although the CSEs Google Shopping and Amazon Product Ads have both made themselves household names for internet retailers, only one really distinguished itself as the main contender.
Conversion Rate (CR)
Google Shopping’s conversion rate has been decreasing since Q4 2011, where it stood at 3.1%. In Q4 2012, we see that number decreased 22.35% to a conversion rate of 2.4%. Why the decline? It’s possible that the gradual switch to a paid engine is responsible because allowing retailers to bid affects their respective products’ exposure.
On the other hand, Amazon had an overall conversion rate of 1.8% in Q4 2011, which stood well below Google’s 3.1%. However, we can see that number increase to a conversion rate of 2.8% in Q4 2012. That’s a 57.5% increase in just one year.
Winner: Amazon Product Ads with a Q4 2012 CR of 2.8% vs. Google’s 2.4%
In Q4 2011, Google started out below Amazon in terms of traffic. However, the switch to a paid CSE has seen near exponential growth.
Note: It may appear that from Q2 to Q3 Amazon’s traffic just fell through the basement, but this is NOT the case. In fact, Google Shopping sent 144% (more than TWICE) more traffic to online retailers than Amazon, and so Amazon’s traffic is proportionally far less. In Q4 2012, Google Shopping sent 96% more traffic to retailers than Amazon did.
Why the big difference? Google’s transition to a paid model influenced other notable CSEs like Shopzilla and Shopping.com to advertise their products on the Google CSE. As a result, much of their traffic was directed to Google Shopping.
Winner: Google Shopping with 96% more traffic sent to merchants than Amazon in Q4 2012.
Cost per Click (CPC)
Note: Google Shopping didn’t charge a single CPC until Q3 2012, when they averaged $0.30, because they hadn’t officially been a paid engine until October 2012. What’s more notable, however, is that Shopping was able to keep their CPCs down. In Q4 2012, Google’s $0.31 CPC was 32.5% cheaper than APA’s $0.41 CPC.
Winner: Google Shopping with a $0.31 average CPC vs. Amazon’s $0.41 average CPC
By no means is this article a complete analysis. Other important metrics of note include cost of sale (COS) and revenues. In CPC Strategy’s full Q4 rankings, they look at all relevant metrics as well as the other major CSEs, such as Pricegrabber, Shopzilla, and Nextag.
From these rankings, one truth becomes very clear: Google Shopping is serious business. Despite still being a very young and maturing CSE, retailers can cash in on the benefits the traffic-heavy CSE can provide, especially during the ever-crucial 4th Quarter.