Comments on: Price comparison sites are going, going, gone…

By: Jordan

Jordan — Tue, 26 Feb 2008 11:30:17 +0000

Hi Mike,

Great analysis on developments in the comparison market, but we think your statement about PriceRunner “losing momentum as bigger players have won the traffic and marketing game” might be a bit off the mark.

As it happens, in December we logged the highest number of unique users ever with 2.9 million (more than 50% above the year before). To us at least, it’s a sign we’ve been gaining momentum.

In addition, we’ve recently added a number of partners, including MoneySupermarket. In their case, we provide them with their shopping comparison and they provide us with our financial comparison.

It’s definitely an exciting time, but it will be interesting to see how the market shakes up over the coming months… Keep up the good work.

Jordan (PriceRunner.co.uk)

By: Shak

Shak — Thu, 21 Feb 2008 15:21:05 +0000

Shouldn’t the question be “Does their TV advertising pay for itself”, NO harm in anyone spending £££s on TV ads as long as it makes commercial sense imo.

I would however say that whilst barriers to entry may seem lower, a nice wad of cash is required to gain any traction in the current marketplace.

By: Mike

Mike — Thu, 21 Feb 2008 14:10:49 +0000

The likes of confused , money supermarket , gocompare advertise on television like theres no tommorow so obviously they are going to be the dominant leaders.

Id like to see just how long money supermarket could maintain its leadership if it were to cut down on the ad spending .

By: Philip Wilkinson

Philip Wilkinson — Thu, 21 Feb 2008 13:16:51 +0000

The fact is that price comparison has become a commodity that anyone can get into these days. Easier access to affiliate deals, the technology is not as difficult as it once was, and bigger companies now are in on the game and spending their dosh.

You know where I think the next battle will be thought – and it’s earlier than price comp..

By: Peter Dantic

Peter Dantic — Wed, 20 Feb 2008 09:32:06 +0000

I’m not froma price comp site but am familiar with their model and have partnered various businesses with them. I don’t think the business model is in trouble, it is shifting. Traditionally they get traffic from four sources – direct URL access, paid search, organic search and via 3rd parties.

Loyalty is a variable thing on the web and organic session starts and no doubt good for these businesses but not necessarily dependable.

Paid search prices have gone up, margins have decreased, this is no longer a reliable way to profitably build traffic.

organic search – because their content is reproduced over multiple partners, price comps are losing the SEO game. Take a recent camcorder release type into Google – no price comps in the significant first few listings:
http://www.google.co.uk/search?hl=en&safe=off&q=toshiba+gigashot+a100f&btnG=Search&meta=cr%3DcountryUK%7CcountryGB

Or the ipod:
http://www.google.co.uk/search?hl=en&safe=off&q=ipod&btnG=Search&meta=cr%3DcountryUK%7CcountryGB

Again , np price comps.

This means the last remaining way for them to build significant revenues is to rely on third parties, a few major players that these businesses work with to produce profitable traffic i.e. they pay out a % of the click fee they charge.

However, as the importance of a non-loss making source of traffic grows in the light of diminishing returns from other traffic sources, they have to give more and more away to retain/win the partnerships in light of increasing competition, so less profit for the same number of clicks.

Price comps offer a good service – but they are over-valued and way too dependent on partners for their revenue. And they are only as good as the number of merchants that sign up to them…

By: Chris Norton

Chris Norton — Wed, 20 Feb 2008 09:32:05 +0000

Interesting post – I use moneysupermarket and pricegrabber regulalrly and have found them beneficial when looking for certain high value services or products.

I used to use Kelkoo but as you point out, I think momentum is with some of the other sites these days. You can’t get away from the irritating confused.com adverts.

I would recommend pricegrabber to friends as its a good service with reviews etc but I am not sure the business will be worth what they asking for though.

Chris

By: Mass Marketing

Mass Marketing — Wed, 20 Feb 2008 08:39:09 +0000

I had forgotten about pricegrabber and some of the other comparison sites you mention. That is because there is soooo much noise online that what I often read about on TC today I quickly forget tomorrow.

Conversely the TV advertising from moneysupermarket and confused have now entered my mind. So maybe experian could have spent some of its budget on more TV mass marketing.

The next generation will be automated price comparison sites which we trust and provide our details to get the best options for insurance, holiday tickets, pop concerts etc. – see http://www.edge.org/3rd_culture/kelly08/kelly08_index.html