MarketingBeyond

ShopZilla and NexTag's Advertising Cash Cow: "Keep the Donut Machine On"

Ever hear the story of the donut machine that couldn't be turned off?  That's the situation at ShopZilla/Bizrate, NexTag and other so-called "shopping services"--the place you go for comparison shopping on the Web.

My recent experience with both advertisers, promoting MobileDiscoveries, my consumer electronics site, is a case in point. Each site attempts to list thousands of products available from online merchants to drive business to their E-Commerce sites. ShopZilla and NexTag charge per click, based on minimum bids associated with product categories. Computers, peripherals and other electronics items carry the highest minimum bids.

The online shopping cartels have created cash cows in the the Web shopping industry where the donut machine can't quickly be turned off. Unlike search engine advertising, which permits pausing campaigns--no donuts there--shopping service advertisers must submit "product feeds" to the sites, wait days for product categorization, fund a draw account (a hefty $700 for NexTag and $100 for Shopzilla/Bizrate), then bid on product placement. 

Like Google, Yahoo and other online advertisers, merchants who place the highest bids get listed in prime positions. Unlike the search engine advertisers, however, it takes ShopZilla and Nextag from 24-36 hours to make any changes--whether bids, campaign pausing or product listing updates. As a result, hundreds of clicks, priced from 15 cents up and averaging  85 cents, continue mounting for days, despite merchants' attempts to stop them. The donut machine can't be turned off.

ShopZilla has two programs, a "continuous" program that keeps replenishing ShopZilla's coffers, as shoppers click away, and a "monthly budget" plan. However, ShopZilla's monthly plan doesn't stop when the budget is reached. If clicks are excessive--as with my campaign--the charges continue creating a negative balance that accrues with additional clicks until ShopZilla can remove the product listings. This method differs 180 degrees from search engine companies that  "stop the press" when your budget is exhausted.

NexTag and ShopZilla argue they don't have the technical ability to immediately pause campaigns, change bids or product information. However, I find it very convenient that ShopZilla and NexTag in the Internet age avoid technology that would stop the donut machine in midstream. One sales rep at NexTag told me "we're working on it." But until then, money flows into the online shopping engine coffers unabated.

In terms of customer service, NexTag is virtually unreachable. Customer service never responded to my queries except with boiler-plate emails. And I finally had to engage American Express to investigate and get my deposit back. That got NexTag's attention, generating a short NexTag customer service survey. Not good.

ShopZilla provides better advertiser support, but the account reps have to follow the company line on maximizing revenues and profits.

Complaints from merchants and consumers abound on the Internet about the shopping services. NexTag clocks in at over 82,000 while ShopZilla receives only a mere 42,000. BizRate takes the prize at over 353,000, with many complaints related to its $100 survey promotions. Click rate fraud, as with Google Yahoo and others, is also a hot discussion topic.

The donut machine is alive and growing at ShopZilla and NexTag.

The Marketing of Belief and Trust: World Economic Conditions & You

 During the past few weeks, anyone who has read the papers, listened to radio, watched TV or talked to their friends has been battered with news from Wall Street and beyond about worldwide financial troubles. I debated all week long whether to blog on our financial conundrum. What could I offer that isn't already under discussion? What do I know about the financial services industry, the credit crunch, mortgage securities and the like?

The answer is "not a lot." But when I started writing MarketingBeyond last year, I promised--from a marketing perspective--to comment on the passing scene and try to avoid the trivial and tripe. And I hope my readers believe I've held to my mission.

However, as I've read about the serious financial troubles facing the U.S. and other countries, I can't help but comment on what I'll call "The Marketing of Belief and Trust." Notice I used the word "belief"and "trust"--not "hope" or other word. Marketers have the tendency to choose words common to the industries, companies and messages they seek to promote. Thus, we end up with trite phrases melted into our heads like cheese on an omelet.

In my mailbox today were the latest copies of Time and BusinessWeek. The front page story titles--the hyperbolic phrases that sell magazines--were there. "How Wall Street Sold Out America: They had a party. Now you're going to pay," proclaimed Time. "Is it Safe Yet?" in 200 point type was BusinessWeek's proclamation about the economic downturn.

But the press isn't running the country and our financial demise is not a result of the devil, a single politician, the Feds or greedy financial types. You pick your own enemies that caused our financial mess. I prefer talking about belief and trust to relieve the pain.

From a marketing perspective, belief and trust are the most important elements of any organization's growth and sustainability. (This includes belief and trust in government as well.) As long as people believe and trust in companies whose products and services they buy, consumers will "stay the course" in times of trouble and strife. Lose belief and trust, however, and you might as well close shop, as we've witnessed in the financial services industry of late.

Belief and trust were not only decimated between consumers and financial institutions. The financial institutions themselves--banks, in particular--refused to loan money back-and-forth around the globe to diminish the impact of the credit crisis. Like a snowball rolling down a hill, the largest global financial firms exasperated the situation by letting the snowball enlarge, crushing everyone in its path down a very steep hill. So much for belief and trust.

Comparisons of our worsening financial crisis to the Depression in the 30's brought to mind Herbert Hoover's famous promise to the American people: "Prosperity is Around the Corner." Little did Hoover know he was in the corner rather than around it. The Depression lasted quite a few years. He might better have said: "I know we're in a pickle, but, trust me, I will do everything in my power to remedy the situation as quickly as possible." That kind of language engenders belief, and it's exactly what we need right now.

As we weather the pain of our current predicament, then, let's save the finger pointing til later. Those who may have contributed to bank failures, loss of thousands of jobs and inadequate government monitoring will face their punishment in due order.

Until then, everyone in the United States--consumers, business leaders, government decision-makers and  financial services executives--must focus all their energies on the marketing of belief and trust. Ignore this mandate at our peril.