A comparison shopping website, sometimes called a price comparison website, price analysis tool, comparison shopping agent, shopbot, aggregator or comparison shopping engine, is a vertical search engine that shoppers use to filter and compare products based on price, features, reviews and other criteria. Most comparison shopping sites aggregate product listings from many different retailers but do not directly sell products themselves, instead earning money from affiliate marketing agreements. In the United Kingdom, these services made between £780m and £950m in revenue in 2005[1][needs update]. Hence, E-commerce accounted for an 18.2 percent share of total business turnover in the United Kingdom in 2012. Online sales already account for 13% of the total UK economy, and its expected to increase to 15% by 2017. There is a huge contribution of comparison shopping websites in the expansion of the current E-commerce industry.
The first widely recognized comparison-shopping agent was BargainFinder, developed by Andersen Consulting (now Accenture). The team, led by researcher Bruce Krulwich, created BargainFinder in 1995 as an experiment and published it on-line without advance warning to the e-commerce sites being compared. The first commercial shopping agent, called Jango, was produced by Netbot, a Seattle startup company founded by University of Washington professors Oren Etzioni and Daniel S. Weld; Netbot was acquired by the Excite portal in late 1997. Junglee, a Bay-area startup, also pioneered comparison shopping technology and was soon acquired by Amazon.com. Other early comparison shopping agents included pricewatch.com and killerapp.com. NexTag another entry into comparison shopping was named Times magazine world top 50 website in 2008,[2] only to eventually close in 2018.[3] In 2005, PriceGrabber was acquired by Experian for $485 million, negotiated by then-CEO and founder of the company, Kamran Pourzanjani, along with Tamim Mourad, in 1999.[4][5]
Around 2010, the price comparison websites found their way to emerging markets. Especially South-East Asia has been a place for many new comparison websites.[citation needed] It started in 2010 with CompareXpress in Singapore, and in the following years companies like Baoxian (China), Jirnexu (Malaysia), and AskHanuman (Thailand) followed.[6]
Meanwhile, in developed markets, Google was accused of promoting Froogle and its replacement, the paid-placement-only Google Shopping, over competitors in its search results, driving down traffic to other sites and driving some out of business.[7] The European Commission began an investigation in 2010, which concluded in July 2017 with a €2.42 billion fine against the parent company Alphabet, and an order to change its practices within 90 days.[8]
Comparison shopping agent
In the early development stage from 1995 to 2000, comparison shopping agents included not only price comparison but also rating and review services for online vendors and products. Altogether, there were three broad categories of comparison shopping services.[9]
Later, through mergers and acquisitions, many services were consolidated.
Services
Through 1998 and 1999, various firms developed technology that searched retailers websites for prices and stored them in a central database. Users could then search for a product, and see a list of retailers and prices for that product. Advertisers did not pay to be listed but paid for every click on a price. Streetprices, founded in 1997, has been a very early company in this space; it invented price graphs and email alerts in 1998.[10]
Technology
Price comparison sites can collect data directly from merchants. Retailers who want to list their products on the website then supply their own lists of products and prices, and these are matched against the original database. This is done by a mixture of information extraction, fuzzy logic and human labour.
Comparison sites can also collect data through a data feed file. Merchants provide information electronically in a set format. This data is then imported by the comparison website. Some third party businesses are providing consolidation of data feeds so that comparison sites do not have to import from many different merchants. Affiliate networks aggregate data feeds from many merchants and provide them to the price comparison sites. Many of the popular shopping websites provide direct affiliation to the customer who wants to become affiliate partner. They provide their own API to the affiliate partner to show their products with specifications to the affiliate partner's website. This enables price comparison sites to monetize the products contained in the feeds by earning commissions on click through traffic.[citation needed] Other price comparison sites have deals with merchants and aggregate feeds using their own technology.[citation needed]
In recent years, many off the shelf software solutions[11] have been developed that allow website owners to take price comparison websites' inventory data to place retailer prices (context adverts) on their blog or content the only website. In return, the content website owners receive a small share of the revenue earned by the price comparison website. This is often referred to as the revenue share[12] business model.
Another approach is to crawl the web for prices. This means the comparison service scans retail web pages to retrieve the prices, instead of relying on the retailers to supply them. This method is also sometimes called 'scraping' information. Some, mostly smaller, independent sites solely use this method, to get prices directly from the websites that it is using for the comparison.
Yet another approach to collect data is through crowdsourcing. This lets the price comparison engine collect data from almost any source without the complexities of building a crawler or the logistics of setting up data feeds at the expense of lower coverage comprehensiveness. Sites that use this method rely on visitors contributing pricing data. Unlike discussion forums, which also collect visitor input, price comparison sites that use this method combine data with related inputs and add it to the main database though collaborative filtering, artificial intelligence, or human labor. Data contributors may be rewarded for the effort through prizes, cash, or other social incentives.
However, some combination of these two approaches is most frequently used. Some search engines are starting to blend information from standard feeds with information from sites where product stock-keeping units (SKUs) are unavailable.
Empirical projects that assessed the functionality and performance of page-wise SSC engines (AKA bots) exist. These studies demonstrate that no best or parsimonious shopping bot exists with respect to price advantage.[13][14]
Price comparison sites typically do not charge users anything to use the site. Instead, they are monetized through payments from retailers who are listed on the site. Depending on the particular business model of the comparison shopping site, retailers either pay a flat fee to be included on the site, pay a fee each time a user clicks through to the retailer web site, or pay every time a user completes a specified action—for example, when they buy something or register with their e-mail address. Comparison shopping sites obtain large product data feeds covering many different retailers from affiliate networks such as LinkShare and Commission Junction. There are also companies that specialize in data feed consolidation for the purpose of price comparison and that charge users for accessing this data. When products from these feeds are displayed on their sites they earn money each time a visitor clicks through to the merchant's site and buys something. Search results may be sorted by the amount of payment received from the merchants listed on the website.[15] large price comparison sites.[16]
In addition to comparing tangible goods, some sites compare prices of services, such as insurance, credit cards, phone bills, and money transfer.
Google Panda and price comparison
Like most websites, price comparison websites partly rely on search engines for visitors. The general nature of shopping focused price comparison websites is that, since their content is provided by retail stores, content on price comparison websites is unlikely to be absolutely unique. The table style layout of a comparison website could be considered by Google as "Autogenerated Content and Roundup/Comparison Type of Pages".[17] As of the 2011 updates to its search algorithm, known as Google Panda, Google seems to have started considering these comparison sites to be of low quality.[18]
Niche players, fake test sites and fraud
Due to large affiliate network providers providing easily accessible information on large amounts of similar products from multiple vendors, in recent years small price comparison sites have been able to use technology that was previously only available to large price comparison sites.[16]
This technology includes software and plugins aimed to standardize the typical processes involving price and product comparison. Without much resources it became possible for amateurs to build seemingly professional websites, mostly using the popular Wordpress CMS. These small sites often rely on Google for their visitors, which are monetized using affiliate networks like Amazon.
The low content quality of typical niche sites, often bordering on spam and fraud, is a growing problem from the perspective of consumer protection and the quality of search engines. By playing the algorithm of search engine giant Google, it is possible to place low quality sites prominently in the search results.
Until recently the phenomenon of fake test or comparison websites had escaped public attention. An analysis by testbericht.de discovered that 34,6% of German search traffic related to product tests on the first page of google leads to fake test sites.[19] When a big German newspaper published a report about such a website[20] and consumer protection organization sending out warning letters,[20] observers started to note a sense of panic in the industry, with site owners changing or deleting the content in question.[21] Amazon, being the biggest player in the affiliate market, declined to comment on the matter.[19]
Deceptive comparison sites give the impression of testing a product thoroughly. In reality, the tests are just an aggregation of freely available information, often leading to the most expensive products being recommended. This in turn increases the commission rate the site owners earn for the recommended products.[22]
Google EU Court Case
This section needs to be updated. Please help update this article to reflect recent events or newly available information.(February 2024)
In 2017, the European Commission fined Google €2.42BN for allegedly monopolising the comparison shopping engine (CSE) market.[23]Google released a statement that the European Commission's assessment will be appealed.[24] Google will review the formal decision, but expects that it will accrue the fine in the second quarter of 2017.[25]
Inktomi Corporation was a company that provided software for Internet service providers (ISPs). It was incorporated in Delaware and headquartered in Foster City, California, United States. Customers included Microsoft, HotBot, Amazon.com, eBay, and Walmart.
Google Shopping, formerly Google Product Search, Google Products and Froogle, is a Google service created by Craig Nevill-Manning which allows users to search for products on online shopping websites and compare prices between different vendors. Google announced at its Marketing Live event in May 2019 that the new Google Shopping will integrate the existing Google Express marketplace into a revamped shopping experience. In the US, Google Shopping is accessible from the web and mobile apps, available on Android and iOS. Google Shopping is also available in France, accessible from the web only. Like its predecessor, Google Shopping is free and requires a personal Google account in order to purchase from the platform. A colored price tag icon replaces the parachute icon from Google Express.
Affiliate marketing is a marketing arrangement in which affiliates receive a commission for each visit, signup or sale they generate for a merchant. This arrangement allows businesses to outsource part of the sales process. It is a form of performance-based marketing where the commission acts as an incentive for the affiliate; this commission is usually a percentage of the price of the product being sold, but can also be a flat rate per referral.
Online shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser or a mobile app. Consumers find a product of interest by visiting the website of the retailer directly or by searching among alternative vendors using a shopping search engine, which displays the same product's availability and pricing at different e-retailers. As of 2020, customers can shop online using a range of different computers and devices, including desktop computers, laptops, tablet computers and smartphones.
Ciao was a European-based online-shopping portal with websites in the United Kingdom, France, Spain, Germany, the Netherlands, Italy and Sweden. In February 2008, the company launched an American version of the site, Ciao.com. The site provided a forum where registered users could write reviews and give their opinions on a wide variety of products to help others make decisions. These reviews were available to the general public to help consumers, but also rated by other Ciao users on their usefulness on a scale ranging from exceptional to off-topic. Up to December 2017, when a review was read by a member, the author had money added to their account. Members could also receive money through online surveys and referring friends. On 27 November 2017, Ciao announced that from 1 December all payments would be stopped. In February 2018, Ciao was closed down. Ciao was free to sign up for.
A scraper site is a website that copies content from other websites using web scraping. The content is then mirrored with the goal of creating revenue, usually through advertising and sometimes by selling user data.
A product feed or product data feed is a file made up of a list of products and attributes of those products organized so that each product can be displayed, advertised or compared in a unique way. A product feed typically contains a product image, title, product identifier, marketing copy, and product attributes. But, can also contain links to rich media assets such as videos, 3D animations, brochures, product stories, product relations, and reviews, as in the case of Open Icecat, the multilingual open content catalogue.
Bizrate Insights Inc., trading as Bizrate Insights, is a market research company that provides consumer ratings information to their customers. A Dotdash Meredith company, Bizrate Insights is based in Los Angeles, California.
Bing Shopping is a products search and discovery service that helps save time by bringing products from multiple sellers together on a single website. It uses Bing to show product results–including photos and product details. Products can be filtered and prices compared. Purchases are completed on the seller's website.
An online shopping directory is a "Yellow Pages-Style" web directory that specializes in ecommerce sites. Inspired by the organizational structure used in traditional shopping mall directories, online shopping directories organize ecommerce sites by their category and subcategory of goods sold. Without the constraints related to shopping at a physical mall, an online shopping directory serves to aggregate all ecommerce sites in one centralized location in order to help a user decide where to shop online.
Website monetization is the process of converting existing traffic being sent to a particular website into revenue. The most popular ways of monetizing a website are by implementing pay per click (PPC) and cost per impression (CPI/CPM) advertising. Various ad networks facilitate a webmaster in placing advertisements on pages of the website to benefit from the traffic the site is experiencing.
Like.com was a price comparison service website that billed itself as a "visual search engine for products".
Netbot was the first commercial Internet price comparison service. Founded by University of Washington Computer Science professors Oren Etzioni and Daniel S. Weld the company was funded by ARCH Venture Partners, Alta Partners and the Madrona Venture Group, and the University of Washington was also a shareholder. Netbot introduced the Jango comparison shopping “agent” first as a browser plug-in and later as a server product. In addition, the company operated MetaCrawler, a metasearch engine, before licensing it to Go2Net. In October 1997, Netbot was acquired by the Excite portal for $35M.
Twenga.com is an online open shopping search engine.
Graphiq is a semantic technology company that uses artificial intelligence to rapidly create interactive data-driven infographics. Its intent is similar to Wolfram Alpha which is designed to provide users with direct information on a variety of subjects rather than going through a search engine.
VigLink is a San Francisco-based, outbound-traffic monetization service for publishers, forums, and bloggers. VigLink specializes in in-text advertising and marketing. VigLink CEO Oliver Roup founded the company in March 2009.
Skimlinks is a content monetisation platform for online publishers. It specialises in technology that automatically affiliates product links from publishers' commerce content.
Priceza is a shopping search engine and price comparison tool, with local websites in six Southeast Asian countries:
Pricesearcher was an independent e-commerce search engine launched in the UK in 2016 which now focussing on top 10 lists and providing lists based on sales with no price comparison functionality. It does not use the traditional Price Comparison Website (PCW) model adopted by comparison sites such as Moneysupermarket.com and search engines such as Google Shopping where retailers pay to list their products for sale. Since its inception, it has listed products from online retailers, without charging a listing fee or commission for sales. Product search results are consequently unaffected by a retailer's marketing budget or lack thereof. Shoppers are able to use the vertical search engine as a price-checking tool, to see whether the goods they find 'on sale' elsewhere are genuinely a good deal.
Advertising revenue is the monetary income that individuals and businesses earn from displaying paid advertisements on their websites, social media channels, or other platforms surrounding their internet-based content. In September 2018, the U.S Internet advertising market was estimated to be worth $111 billion, with market share being held mostly between Google, Facebook, Amazon, and Microsoft. These companies earn revenue through online advertising but also have initiated pathways for individual users and social media influencers to earn an income. Individuals and businesses can earn advertising revenue through advertising networks such as Google AdSense, YouTube monetization, or Outbrain.
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