Two months ago I wrote a post looking for comments on social shopping. I mentioned Jellyfish. And the Smack attacked (check out the comments for the post). A Smack, for the uninitiated, is a group of jellyfish…or in this case, the fanatical Jellyfish.com Smack Shopping community. Jellyfish has done an incredible job of bringing the fun back into a shopping site.

Smack Shopping is a game: “During each Smack show, Jellyfish auctions off new products in our unique price dropping format. Every second that ticks off the clock, we drop the price of the product, until the deal sells out. And to make it fun, we don’t tell the audience how many units are available for each auction. That’s right, the deal will get better every second you wait, but don’t wait too long because once the product is gone, the deal is over.” (from the Smack Shopping site)

But the game doesn’t end there. Early on when the price starts dropping, members can guess the % off for the final deal. If you’re the best guesser you get ‘guru points’ (which according to one Smack Shopper do nothing but give you bragging rights - which is actually perfect - Jellyfish can talk smack as well as be part of a smack) and you get to spin the SmackWheel for small prizes like T-Shirts or larger prizes like cash back rewards on Jellyfish.

But the game doesn’t end there. For selected Smack Shows, there’s also sometimes an ‘outwit the smack‘ game where one lucky contestant tries to guess the least popular answer the rest of the smack will pick (hard to explain…gotta see it in action).

But the game doesn’t end there. You can earn Quest points for sending a message to your friends and getting them to sign up. Once Jellyfish hits its Quest goal, there’s a special event. This past week, the second Quest event was a Smack Shopping show featuring a 2007 Toyota Prius (see screen shots throughout this post). To participate in the auction, members had to have received at least 50 quest points.

I think the Smack Shopping experience is really really smart. Jellyfish has remained true to its word of not playing the arbitrage game, while developing a unique customer acquisition channel.

But is the Smack show a customer acquisition channel for the Smack show or for Jellyfish? That’s what’s not yet clear in my mind. And because of the seeming success of Smack Shopping and the incredible hype around social networking, part of me really just wants the company to focus on that area and forget about the comparison shopping angle. In fact, I think it would be smart for one of the main shopping comparison engines to buy Jellyfish for Smack Shopping.

The guys at Jellyfish see Smack Shopping and comparison shopping tightly intertwined. As co-founder MarkMcGuire explained to me, people come in through Smack and convert into Jellyfish.com users. The more users Jellyfish sends to its merchants, the more those merchants will ‘bid up’ (by increasing their cash back amount) their listings. It’s a win-win-win (for consumers, for merchants, and for Jellyfish). Here’s what Mark told me back in July:

“Most of our customers are introduced to Jellyfish through Smack Shopping, and we are extremely pleased with the synergies between the two products. Approximately 35% of our Smack customers are currently converting to Jellyfish.com purchases, and we think this conversion rate will continue to increase. I know you understand the VPA advertising platform at Jellyfish.com allows our merchants to increase their CPA commissions on a global, category and product-level, there-by improving their rankings in our results and their overall value proposition to the end consumer. To realize the full promise of the Jellyfish.com VPA ad model, we need lots of customers buying. Buying drives liquidity in our advertising rates. The more sales retailers receive at Jellyfish.com, the more focus they give to their rankings, not only increasing our advertising revenue, but the actual end deal the customer receives and our overall value proposition. Smack Shopping is a primary means through which this virtuous cycle has started at Jellyfish.com.”

While Jellyfish claims a good % of Smack Shoppers are converting into Jellyfish.com buyers, I just have not found evidence of this. I have talked to many merchants currently on Jellyfish and they are not seeing sales. They say participating in a Smack Show is good, but in general, they are not seeing sales through Jellyfish.com. SingleFeed does not currently support Jellyfish. We will eventually because it’s easy enough to do and merchants are asking us to. However, my position as the SingleFeed guy from the start has been to optimize the listings that are driving the traffic and then worry about the next tier of shopping engines. Just as in the old days of PPC marketing, eventually I didn’t work with Ah-ha, Sprinks, FindWhat, Looksmart, etc. because concentrating on Google and Yahoo was a much better use of my time.

People might argue that because Jellyfish is a cost per acquisition (CPA) model, it doesn’t matter if a merchants doesn’t get sales. That’s a good point, but we all know that there’s always some management involved when working with any marketing channel.

So, as with all my posts, I’m sure you’re asking where I’m going with this. Let me tell you.

Jellyfish has found a creative niche for itself. They really are building a community. Not a shopping community, but a community around a game. Just as people get together to watch Amazing Race or Survivor, Jellyfish members get together for Smack Shopping shows, which turn into Smack parties. That in itself says a lot. It’s not like I’ve talked about shopping on NexTag as a party anytime recently.

Which is why I think the opportunity is not to try to convert the Smack into Jellyfish.com users, but rather completely blow out the social game show piece of the business. Game shows can be incredibly lucrative advertising platforms. Ad markets like the one we have today make this opportunity especially attractive.

The Jellyfish comparison shopping piece is just a distraction. Jellyfish should partner with a major shopping engine or affiliate network for the comparison shopping piece and work exclusively on the game show. OR, some smart shopping engine should swoop in and buy Jellyfish. From the point of view of the major engines, Jellyfish, while not exactly a major force to be reckoned with, has done a good job of acquiring users building an audience without playing the arbitrage game.

Yes, the shopping engine would have to dig into the numbers to see what’s really happening behind the scenes, but numbers (in terms of comparison shopping revenue) aren’t all that matter. Jellyfish has come up with a creative community experience. The Smack isn’t going to come and sting the big boys in the behind, but the big boys need to pay attention to these types of innovations. AND perhaps more importantly, most of the shopping engines make 30% or more of their money from Google AdSense and graphical ads. A site like Shopzilla or PriceGrabber could use Smack Shopping to create deeper advertising relationships with its merchants.