Data Feeds Tested

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Data Feeds Tested

Tuesday, 22 June 2004

Topic: Data Feeds — How to Create and Effectively Use Data Feeds for Profitable Campaigns

What is a data feed? How can using them get you exposure on over 15 sources of highly qualified traffic, sources that will often convert at a higher rate than either Google or Overture?

The sources in question are comparison search engines. While we have tested a number of these in previous reports, we have yet to look at how to create and utilize feeds to optimize your comparison search engine campaigns. This research brief will do just that. (Our previous reports on comparison search engines can be found in the notes at the end of this brief.)

What are the typical requirements of a data feed? How do you update and maintain a data feed once it is created? And how can you optimize and effectively use data feeds to drive the most qualified traffic?

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1. THE MARKETING POTENTIAL OF A DATA FEED

A data feed is simply a structured form of information about the products you carry. Data feeds are most commonly based on MS Excel, MS Access, or a text file with every value separated by a delimiter (commas, pipes, or tabs). A data feed forms the backbone from which comparison engines derive and display information about your products.

Comparison engines are a good source of qualified traffic because shoppers can compare products based on detailed descriptions, prices, and consumer reviews before clicking on your listing. These engines typically convert at a higher rate than standard PPC engines such as Google AdWords or Overture.

Data feeds are helpful in (at least) three ways:

They can be used to ensure the success of your marketing campaign on a comparison engine by optimizing your product listings. (One way to do that is to list only those products that are converting profitably. More on this below.)
Carefully creating and managing your data feeds can ensure that your customers have access to complete and up-to-date information about your products and prices.
Feeds give you significant flexibility in creating compelling, keyword-rich product descriptions versus "snipped" comparison engine descriptions, which are sometimes incoherent keyword gibberish.

KEY POINT: The key to a successful comparison engine campaign lies in using a well-structured and optimized data feed.

To understand the marketing potential of an optimized data feed, we will look at how our test site used a data feed to launch a profitable campaign on one of the major comparison engines.

On their first run, this company did what most merchants do: they included their entire product range in the data feed. The results for Campaign A are listed below:

CAMPAIGN A:RESULTS BEFORE OPTIMIZING DATA FEED
PRODUCT	CLICKS	CONVERSION	CLICK COST	REVENUE	NET PROFIT	ROI
1	211	1.42%	$105.50	$450	$30	28%
2	45	2.22%	$22.50	$150	$23	100%
3	714	0.14%	$357.00	$150	($312)	-87%
4	36	11.11%	$18.00	$600	$162	900%
5	85	10.59%	$42.50	$1,350	$363	853%
6	14	14.29%	$7.00	$300	$83	1186%
7	325	3.69%	$162.50	$1,800	$378	232%
8	300	0.00%	$150.00	$0	($150)	-100%
9	517	0.39%	$258.50	$300	($169)	-65%
10	29	3.45%	$14.50	$150	$31	210%
Total	2276	1.54%	$1,138	$5,250	$437	38.4%

What You Need To UNDERSTAND: The cost-per-click for this campaign was $0.50 and the order size for each product was $150. The total amount spent for this campaign was $1,138, net profit after click costs was $437, and the ROI achieved was 38.40%.

On analyzing the results of Campaign A, this company realized that while products 3, 8, and 9 received a large number of clicks, very few of these converted into orders. As a result, products 3, 8 and 9 exhibited negative ROI. Having caught this trend early in Campaign A, we decided to remove these products from the data feed.

What would happen to this campaign if we removed the unprofitable products and achieved the same results? Take a look at Campaign B, below:

CAMPAIGN B:RESULTS AFTER OPTIMIZING DATA FEED
PRODUCT	CLICKS	CONVERSION	CLICK COST	REVENUE	NET PROFIT	ROI
1	211	1.42%	$105.50	$450	$30	28%
2	45	2.22%	$22.50	$150	$23	100%
3	0	0.00%	$0.00	$0	$0	0.00%
4	36	11.11%	$18.00	$600	$162	900%
5	85	10.59%	$42.50	$1,350	$363	853%
6	14	14.29%	$7.00	$300	$83	1186%
7	325	3.69%	$162.50	$1,800	$378	232%
8	0	0.00%	$0.00	$0	$0	0%
9	0	0.00%	$0.00	$0	$0	0%
10	29	3.45%	$14.50	$150	$31	210%
Total	745	4.30%	$372.5	$4,800	$1,068	286.6%

What You Need To UNDERSTAND: By optimizing the products in the data feed, our test site would be able to boost ROI to a substantial 286.58%. Removing the low-converting SKUs resulted in an increase in net profit of $631 and a decrease in click costs of $765.50. Not only did the profits multiply, but the total campaign expense was just one-third of what it was in Campaign A.

We have made a "working" version of the spreadsheet we used to generate these tables available for download:

http://www.meclabs.com/datafeedschart.xls

You can use this worksheet to analyze the profitability of your own comparison search engine campaigns. Change the number of clicks and orders for each product and make global changes to the CPC, order size, and profit by changing the numbers in the green row.

KEY POINT: If you are currently using comparison engines (especially Yahoo! Shopping), you need to take a hard look at the clicks and orders for each individual product.

Many campaigns that convert at 1-2% can be increased to 5%+ by just optimizing the data feed and listing products that are converting at a level that is profitable for the company. In fact, this principle applies to any advertising or marketing service that is based on click fees.

Now that we have shown you what a data feed can do for your marketing campaign, let's get down to the nitty-gritty of how to create, maintain, and optimize a data feed.

2. HOW DATA FEEDS WORK

What are the typical requirements of a data feed?

The comparison engines usually make the requirements quite simple. Once you sign up, they will provide a "sample" feed or the requirements for the feed that you need to generate. In general, the following information is required in most of the major comparison site data feeds:

Manufacturer
Manufacturer Part Number
Your Part Number (internal if different from manufacturer)
Universal Product Code (if applicable)
Product Name
Product Description
Link (directly to the product on your site)
Product Image URL (link directly to the product picture on your site)
Selling Price
In Stock? (Yes or No)
Shipping Rates (rate for Ground, 2nd Day, Next Day, etc.)
Category (often depends on the site)

Not every comparison engine requires the exact same information, and they often have different "naming schemes" for the data. Check directly with each comparison engine to find out what it requires.

How do you create a data feed with these requirements?

For large retailers with in-house developers, it is usually simple to satisfy these requirements by having your developer pull the required information from your current database of products.

For smaller retailers that have no development or database experience, satisfying these requirements will be more difficult. However, one or more of the following suggestions may be helpful:

You may be able to provide enough information to get started by using any existing product catalog or database in your finance or accounting suite.
If you have very few products, you can create a feed manually. This becomes a daunting task once you have over 100 products.
If all of the required information is on your website, then it is probably in some sort of structured format and can be extracted.
This is the process for creating your data feed manually:

Start by opening a new Excel workbook and keying in the headings of each column into the first row. For example, your first row would have manufacturer, manufacturer part number, etc.
Thereafter, enter your actual product information for each respective column, one product per line.
Once you have completed entering all the product information, save the file in a ".csv" format.
Once you have a general data feed you can edit and customize the information for all the comparison engines on which you would like to advertise.
Make sure you account for specific comparison engine requirements. A quick example would be that DealTime might want "Link" as the column heading for the product link while PriceGrabber might want "URL". All you have to do is save a copy of your data feed and re-label that column from "Link" to "URL".

If you are using a Yahoo! Store, you can try your luck with an XML export to create your data feed. The steps are:

Log into your Yahoo! Store and click on the "Search Sites" link at the bottom left of the store manager page.
Enable the export feature through the "Export of Store Contents" link. You can also download the file directly from that page.
Unfortunately, this file is not easy to work with if you have no experience with XML. For stores with few products, you could use this file to copy and paste the information you need to generate the feed.
If you have a new Yahoo! Store with the "Catalog Manager" tool, use the Excel template for your store as the basis for a data feed. Just log in to your store, navigate to the "Catalog Manager" link, and click on the "Upload" tab. Click the "Download" button to download this file, which contains most of the information you will need to create a feed.

There are software vendors that offer solutions to create data feeds. The best resource that we have found for creating data feeds for Yahoo! Stores is:
http://www.rtmltemplates.com/
This site provides a Froogle Feeder service that will automatically create a data feed for Froogle (Google's shopping search engine). This is very efficient as you don't have to format an extra file for Froogle. Here is a direct link to the Froogle Feeder:
http://www.rtmltemplates.com/froogle-feeder.html

KEY POINT: Before you use your data feed to load products on any of the major comparison engines, determine if that site carries your products by using a search engine.

Once you decide on a comparison site, contact them and ask to become a merchant. You should see your products listed on the comparison engine once you complete your setup and the engine has integrated your data feed.

How do you update and maintain data feeds?

There are three primary ways to get your products loaded and updated on comparison engines:

The first is a "Link" to your data feed that the comparison site can schedule for a download (usually once a day). This is a direct link to your data feed on one of your own servers. An example of this would look like:
http://www.acmeproducts.com/datafeeds/acmedatafeed.csv

All you have to do to make any changes to your products or prices is to edit the data feed file at that location and the changes will be reflected on the next download from the comparison site (usually within 24 hours).
The second is an FTP upload where you will upload your file to a specific FTP location on the comparison site's servers. The comparison site will give you instructions on how to upload your file. In this instance, they will only update the products when you upload a new file.
The third way is a "site crawl" or "spider" of your products. Very few comparison engines still offer this feature, as it is more time-consuming than using a data feed and requires a bit of set-up on the comparison site's part.
Other problems using the "site crawl" method are that, in some instances, there can be errors with the way the information is formatted, which could translate in the wrong information showing up on their site. Wrong information posted on comparison engines can have dramatic negative consequences (lost revenue).

KEY POINT: Updating the data feed is an important step that determines if your listings remain fresh, accurate, competitive, and keep drawing in traffic. You should choose the method that best matches the frequency with which you need to update your product listings.

3. HOW TO OPTIMIZE YOUR DATA FEED

This is a crucial question that ultimately determines the success of a campaign. A common tendency of many merchants is to build a data feed and load their whole catalog of products on to the comparison site. After the first month these merchants look at the number of clicks and orders and figure out the ROI of the campaign. If the campaign proves profitable, they keep it up; if not, they take it down.

Take the example of Yahoo! Products Submit. Many merchants listed their products for a couple of weeks to a month and immediately took them down because Yahoo! Shopping was no longer profitable.

One of the main benefits of using data feeds is that "you have control." You can add or remove products from your data feeds at any time, which makes it an effective way to manage campaigns.

Most comparison engines will provide the number of clicks you received for each individual product. If you compare those statistics to the number of orders you have received for that particular product, you will be able to determine if selling the product was profitable. The non-converting products can then be taken off your data feed to improve campaign profitability. We have illustrated this above with our test site.

More recently, some comparison engines actually provide tracking codes that give you the number of clicks and orders you received on a per-product basis.

Data feeds make it very easy to implement "tracking URLs" for your products. By implementing tracking URLs, you will be able to see which products are performing well and which simply aren't converting. There are two ways to achieve this:

Yahoo! Store owners can create a tracking URL from the "Promote" section. Type in the name of the site you would like to track links from and it will produce a link URL like this:
http://store.yahoo.com/cgi-bin/clink?YourYahooStore+268rEv+index.html

Now you can add this tracking URL to your data feed by replacing "index.html" in the URL with the product ID for each of the products in your store. Yahoo! will then report the clicks under the "Track Links" section.
If you are not a Yahoo! Store owner, you can add an extension to your current product URLs that looks something like this:
http://www.acmeproducts.com/product7.htm?v=DealTime&Product=product7

In this case, the site you are advertising on would be "DealTime" and the product would be "product7". If you are adding tracking URLs to your data feed, it's likely that you'll need the services of a web developer in assisting you with the set-up and data processing once the clicks are logged.

KEY POINT: In most cases you can optimize your feeds to make almost any campaign profitable. Many merchants look for the "most possible" traffic, but you must realize that your efforts should be focused on finding the "most profitable" traffic. It is important to manage the product listings in your data feeds in order to achieve the greatest profit.

4. GUIDELINES FOR CREATING SUCCESSFUL CAMPAIGNS

The following guidelines will help you create and optimize your data feeds to drive successful campaigns:

Start with a "Master" list or database of products that you carry. This list will be used to generate data feeds for each comparison site you would like to participate in.
Create a separate data feed for each comparison site with a corresponding link to that data feed on one of your servers. This will be the link the comparison engines use to update your products on a daily basis. By using a separate link for each comparison site, you will be able to optimize the feed for that specific site by changing the data feed file located there.
For each specific product link, create tracking URLs so you can measure the conversion from click-through to order for each product on each specific comparison site. This step is critical for optimization.
Make sure you are providing as much information as possible. The following information contributes greatly to the performance of your products:
1. Stock – Only list products that are in stock. You do not want to attract customers to your site for out-of-stock products. These customers are at a prime place in the buying process and will leave immediately upon finding out that the product is not available. Make sure your products are posted as "in stock" on the comparison site. Fortunately, "in stock" is usually the default listing.
2. Shipping Rates – If possible, include shipping rates with every single listing. Listings without accurate shipping rates are less qualified because they do not represent the "Total Delivered Cost" used by many comparison engines to help their customers find the best deal. Your conversion rate will suffer if shipping rates are not included.

Using the techniques outlines above, you should be able to create profitable comparison search engine campaigns using data feeds. Below we have listed related reports and our literature review.

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