GSI Commerce Generates Higher Return Rates for Online Partners Who Advertise on Comparison Shopping Engine Sites
As Cost-Per-Click Rates Increase, Merchants Focus on Their Return on Investment (ROI)
KING OF PRUSSIA, Pa., Jan. 26, 2006 – Using a new, optimized, automated bid management (ABM) process, GSI Commerce (Nasdaq: GSIC) has created a way for its online partners to realize a bigger bang for the bucks they spend advertising their products on comparison shopping engines (CSEs). Launched in 2005, approximately 30 of GSI Commerce’s online partners have used the new ABM process as they look to achieve higher returns on their CSE advertising campaigns.
“As click fees for product advertising on CSE venues continue to rise, we believe we’ve created a very efficient method for our online partners to generate a higher rate of return on the investment (ROI) they make with their CSE advertising dollars,” says Ben Tatta, vice president of the interactive marketing group for GSI Commerce.
Typically, a merchant advertiser receives an electronic report from a comparison shopping engine that contains historical cost data at a category or subcategory level. To view the associated revenue data, the merchant has the option to install code that tracks revenue. The data is limiting because it does not provide the depth of information required to determine the effectiveness that CSE advertising has on the hundreds, perhaps thousands of products that an online merchant is selling.
Taking a cue from the way it gathered and managed open source data with paid and natural search companies, the interactive marketing group of GSI Commerce enhanced its ABM process in 2005. Key to optimizing the process was building an application programming interface (API) that would pull detailed, cost-per-click (CPC) data directly from CSE databases and marry it with associated revenue data.
“The enhanced technology enabled us to dive deeper into the data provided by the CSEs,” explains Tatta. “Now, we can view, interpret, and manage CSE campaigns down at the more meaningful product level. That insight allows us to be much more selective with our ad buys, which in turn generates a higher return on our partners’ advertising investment dollars.”
While other retailers are making CSE advertising spend decisions based on the popularity of search terms and generic data associated with category and subcategory levels, GSI Commerce’s partners are determining ROI for specific products, which provide them with a competitive advantage in the CSE ad marketplace. Since launching its new ABM process in April 2005, GSI Commerce has re-introduced CSE advertising to approximately 30 of its online partners.
One of the first partners to use the optimized ABM process for a CSE campaign was Ace Hardware. During a five-month CSE campaign in 2005, Ace Hardware doubled its ROI.
“We have hundreds of products in multiple categories, which means there is a lot of data associated with our CSE ad buys,” explained Dana Kevish, interactive marketing manager for Ace Hardware. “GSI Commerce’s automated bid management process locks in on the important product-level data and determines the most appropriate purchase to make on a cost-per-click basis. The new ABM process significantly boosted the return on our CSE advertising spend.”
GSI Commerce successfully launched its new ABM process with the help of search and data feed technology partner, ChannelAdvisor. Together, the interactive marketing group of GSI Commerce and ChannelAdvisor have developed API hooks into two popular CSE platforms.
“The goal was to improve ROI on CSE advertisements, and we helped GSI Commerce build a robust ABM tool to help them bid more efficiently and target their CSE ad purchases more precisely,” said Scot Wingo, chief executive officer of ChannelAdvisor. “From our perspective, as a leading technology provider in this space, we believe GSI Commerce was the first to integrate an API with a comparison shopping engine.”
About GSI Commerce
GSI Commerce is a leading provider of e-commerce solutions that enable retailers, branded manufacturers, entertainment companies and professional sports organizations to operate e-commerce businesses. We provide solutions for our partners through our integrated e-commerce platform, which is comprised of three components: core technology, supporting infrastructure and partner services. We either operate, or will operate pursuant to signed agreements, all or portions of the e-commerce businesses for approximately 50 partners.
Forward-Looking Statements
All statements made in this release, other than statements of historical fact, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “should,” “guidance,” “potential,” “continue,” “project,” “forecast,” “confident,” “prospects,” and similar expressions typically are used to identify forward-looking statements. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business of GSI Commerce and the industries and markets in which GSI Commerce operates. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. Factors which may affect GSI Commerce’s business, financial condition and operating results include the effects of changes in the economy, the impact of FASB 123(R), consumer spending, the financial markets and the industries in which GSI Commerce and its partners operate, changes affecting the Internet and e-commerce, the ability of GSI Commerce to develop and maintain relationships with strategic partners and suppliers and the timing of its establishment, extension or termination of its relationships with strategic partners, the ability of GSI Commerce to timely and successfully develop, maintain and protect its technology and product and service offerings and execute operationally, the ability of GSI Commerce to attract and retain qualified personnel, the ability of GSI Commerce to successfully integrate its acquisitions of other businesses, if any, and the performance of acquired businesses. More information about potential factors that could affect GSI Commerce can be found in its most recent Form 10-K, Form 10-Q and other reports and statements filed by GSI Commerce with the SEC. GSI Commerce expressly disclaims any intent or obligation to update these forward-looking statements, except as otherwise specifically stated by GSI Commerce.
Contact:
Greg Ryan
Director, GSI Commerce Corporate Communication
tel: 610-491-7294
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