Recommendation for Yahoo! Product Submit and Yahoo! Shopping

by Brian Smith, on July 27th, 2007

Dear Yahoo! Product Submit & Yahoo! Shopping,

It’s time for a change. You have 2 options.
1. Stop charging merchants on a pay per click (PPC) basis.
2. Radically overhaul Yahoo! Product Submit, creating reporting and bidding capabilities that make use of a smart web service - basically learning from the successes and failures of Yahoo! Search Marketing (YSM).

While I’d like you to go for the second option, at this point, I have a feeling this is too difficult. Panama is the future of the company - at least for the moment - and getting any resources to improve Yahoo! Product Submit is not going to happen. Furthermore, Yahoo! Shopping/Yahoo! Product Submit seem to be just another Yahoo! operating unit (a JAYOU, for short). It will do fine under the (fairly) new direction of Jasper Malcomson, but is not destined to be a shining star. This is not a below the belt blow to Jasper and his team, it’s just that I can’t imagine that anyone high up at Yahoo! really cares about Yahoo! Shopping/Yahoo! Product Submit right now.

If Yahoo! Shopping and Yahoo! Search Marketing Product Submit bring in $150M this year, that’s great, but I think Yahoo! decided years ago to focus more on search, than on product search. Rob Solomon and Chris Saito made a good effort. David Beach tried to shake things up. And I’ve been a wonderful pain in your ass, but I’ve finally come to the conclusion that Yahoo! Shopping and Yahoo! Product Submit don’t really matter to the company. I’ve met some smart people at Yahoo! Shopping and Yahoo! Product Submit, so I kinda hate to say that, but if the overall support of the company isn’t behind the product, it’s the truth as I see it.

Yahoo! Product Submit (the way merchants get on Yahoo! Shopping - for those of you newbies) is a smart system that processes data feeds quickly and efficiently. The system even auto-categorizes products with incredible accuracy. The Yahoo! Product Submit reporting functionality, however, leaves a LOT to be desired. Actually, it leaves everything to be desired. Where’s the product level reporting? Where’s the product level bidding? Where’s the API so I can grab click costs in almost real time and then automatically make changes to my bids in order to optimize my ROI?

At the same time, my guesstimation is that Yahoo! Shopping is making at least 20% of its revenue from graphical ads and another 30% from YSM ads, which means that the Yahoo! Product Submit PPC ads only account for 50% of revenue. Assuming that Yahoo! Shopping is doing aprx $150m/yr (I’m being generous), that means the PPC ads from Yahoo! Product Submit are only bringing in $75m/year. While that sum might be meaningful for any other shopping engine, in the grand scheme of Yahoo!, that’s chump change. So get rid of it - Panama and Graphical Ads are the future of Yahoo!, anyways, right?!?

Two years ago, I interviewed Rob Solomon, former GM and VP of Yahoo! Shopping who said “Yahoo! Shopping is becoming a starting point and adding value to the shopping experience.” Somewhere along the way, that vision was lost. Yahoo! Shopping now looks like the mind of a improperly medicated schizophrenic. My comments last November pretty much say it all, but to sum it up, the site does not provide an incredible shopping experience that consumers will evangelize. It’s a mess.

So go FREE. Yahoo! Product Submit becomes a Google Base-esque service, although with the ability to more flexibly handle feeds than Google Base or any other shopping engine (seriously, Yahoo! Shopping is the easiest engine to work with). Yahoo! Shopping then shifts monetization efforts to Yahoo! Publisher Network ads & Graphical Ads - which it has pretty much already done. And most importantly, the Yahoo! Shopping team can return to the basics, improving the shopping experience on Yahoo! Shopping.

It’s a tough pill to swallow, but merchants will applaud you for building a free shopping comparison engines with a lot of traffic - it’s what has driven Google Base and Google Product Search.

1. Yahoo! Product Submit, go free.
2. Yahoo! Shopping, gracefully fill the revenue gap with targeted YSM and graphical ads.
3. Yahoo! Shopping, go back to the basics and concentrate on cleaning up the site and building an incredible user experience.

Related Posts
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psurplus said

*applause*
You couldn’t have said it better. I want to quit using Product Submit everyday. There is no mechanism that can portray the value my organization receives from using it. I remember asking you before about where this product is going, and at least I haven’t been let down. I never really had that high of expectations if any to see any improvements to this Yahoo service.

I eagerly await any response from Y! on this.

July 27th, 2007 at 9:12 am |

colin said

I agree that Y! Shopping is a subpar product… both front end and back end. For a CSE not to have click/cost/order/revenue reporting data and bidding on a product level, at this point, is absurd. However, I don\’t believe that the solution is to go free. A free service has an entirely too low barrier to entry. Anyone and everyone WILL signup. This includes spammers that bring a lot of noise and junk. This was the problem Google ran into with Froogle. It became a mess. They’ve spent ages trying to clean it up. Granted, a free service will benefit from comprehensiveness, but there will be no organization and a lot of junk.

In my opinion, instead of going free, they could offer a flat rate of 5 cents per click. 1) they would have the lowest rates of all the PPC engines 2) because advertisers still have to pay for their listings, albeit not much, it remains an incentive (that you don’t have w\ the free model) for them to provide good, optimized data in their feeds. Even a CPA model doesn’t provide much of an incentive for a merchant to provide up to date, clean data to a publisher… they’ve, more or less, got nothing to lose.

As such, if an engine was really considering going free, I would instead urge them to go for the minimal flat rate approach. Everyone will be happier.

As for the other engines that want to maintain their higher rates, I would still hope that someday they can take on the AdWords model: Get rid of the minimum category rates… let the market drive the price.

July 27th, 2007 at 1:14 pm |

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