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Changes Coming to Nextag’s CPC Rates

Nextag, one of the leading comparison shopping engines, recently released its updated Rate Card, which contains a couple of interesting changes.

For those new to the comparison shopping landscape, the Rate Card is a list of minimum CPC’s at which products must be bid in order to be eligible for inclusion within an engine’s listings, broken down by product category.  For example, the minimum CPC for a furniture item might be $0.70 per click, while the minimum for a t-shirt might be $0.35 per click.

What’s Changing?

The first of Nextag’s Rate Card changes is nothing strange in the CSE world: rates will increase for the holiday season.  For Nextag, rates will increase between 15% and 35% depending on the category from October 14th through January 5th, 2014.

The second change is one that, while not completely novel, may actually save merchants money:  Nextag’s Rate Card will now take product prices into account by breaking product categories into 3 price buckets with tiered minimums. The cheapest bucket will have the lowest CPC minimum, which represents a discount from the current, catch-all rate.  The mid-tier price bucket will fall somewhere near existing rates, and the most expensive price bucket will represent an increase in the current CPC rate.

For example, rugs priced between $0-$39.99 will have a new minimum of $0.33, rugs from $40-$309.99 will have a minimum of $0.40, and rugs over $310 will have a minimum of $0.60.

Keeping Up With the Joneses

Price-bucketed Rate Cards are not a new idea, and breaking out minimum CPC’s based on price is something that has set Amazon Product Ads and the Ebay Commerce Network (RKG’s two leading comparison shopping engines in terms of efficiency) apart from other CSEs.

This is because the price of an item is a huge factor in determining whether it can be listed on a CSE with a favorable rate of return, as advertisers often can’t afford to pay the same CPC’s for low-ticket items as they can for more expensive items.  While this is part of the reason a Rate Card exists as different types of products carry different price tags, large price discrepancies do exist even within a single product category (which begs the question as to why minimum CPC’s exist in the first place – but that’s another blog post).

By following in their competitors’ footsteps and allowing more products to be listed efficiently, Nextag’s changes can help increase click traffic while also enabling merchants to boost top-line sales.  Everybody wins.

Conclusion

Despite its claim to be the “#1 independent comparison shopping platform,” we have seen Nextag’s performance dip significantly in the past year, subsequently leading to a significant click-share drop.

While other engines have made strides to save their merchants money since Google’s move to the pay-per-click comparison shopping platform, Nextag has dragged its feet on the matter until this point.  With Holiday rate increases just around the corner, these changes could not come at a better time.

  • Jeremy Arthur
    Jeremy Arthur is a Senior Analyst, CSE & Feeds at RKG.
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