Approaching advertisers - what did I do wrong?

[boff]

I want to set up a comparison website in a specific industry. This industry is made up of a few national retailers and many small regional ones. There is only one comparison website at the moment and it is very basic. The products in this industry are big ticket items that are not bought online but people certainly do a lot of research online which is why I believe a comparison website will be useful.

In order to compare stuff on the site, I need retailers to send me details of their items. So I approached them by highlighting the advantages of appearing on my site - mainly cheaper and simpler than PPC and they can spend as little as they wish and stop at any time. All they have to do in return is send a file with their product details, something that is not confidential.

But absolutely no retailer expressed interest. Even the big ones who do a lot of PPC were not interested. I can't even have a basic site to show potential retailers until I get at least one or two retailers on board so that I have products to compare.

Where did I go wrong? Is there any way I could approach them differently to convince them to advertise on my site? They are already doing advertising, so it's not a question of convincing them to advertise from scratch. I can't think of a better deal for them than what I offered - a very low risk proposition.

Any help or suggestion would be most welcome. I have plenty of ideas to make this business grow but I can't even get it off the ground!

 

[OldWelshGuy]

it sounds like you are trying to sell them cold, i.e. be in at the start.

What can you GUARANTEE them? As in how many enquiries are you getting currently? what level af traffic are you getting? is it online or offline even?

 

[UKSBD]

Let's say I sell a nice niche product, it's pretty hard to find, but when people do find me I sell at a premium (say £1000)

Now someone comes along and wants to make it easier to find my product, but they are also going to list all my rivals at the same time, some of those rivals sell the product for £900

So to compete with these rivals I will not only have to reduce my price to £900 but the person setting up this great scheme will probably want a cut as well.

Comparison sites just create a race to the bottom of the price ladder.

The only way I would join would be if it was successful and I had no choice.

 

[Tim Coulter]

I think @UKSBD summed up the retailer's perspective perfectly:

Comparison sites just create a race to the bottom of the price ladder.

The only way I would join would be if it was successful and I had no choice.

However, they are still very valuable, from the buyer's perspective, but only once they are fully populated with retailer data. This means that you will need to manually fill your database first in order to start generating the traffic that will make retailers take notice.

Is it possible to do this without the retailers' cooperation, for example by reference to their respective websites? If so, depending on the number of product lines and the number of retailers, there are several possibilities:

1. For the big retailers, create web scraping tools that automatically extract their product and price data. (You might need this approach anyway, to keep prices up-to-date, if price changes are frequent).
2. Use outsource workers or micro tasks to collect the data for you.
3. If you have lots of time and no money, do it yourself, the hard way.

Since your project appears to still be at the validation stage, one strategy would be to reduce the scale of the challenge by launching a regional test site first. This would cut the cost and the timescale of building your database and would give you the numbers on which to judge whether it's worth scaling out nationally.

 

[boff]

Let's say I sell a nice niche product, it's pretty hard to find, but when people do find me I sell at a premium (say £1000)

Now someone comes along and wants to make it easier to find my product, but they are also going to list all my rivals at the same time, some of those rivals sell the product for £900

So to compete with these rivals I will not only have to reduce my price to £900 but the person setting up this great scheme will probably want a cut as well.

Comparison sites just create a race to the bottom of the price ladder.

The only way I would join would be if it was successful and I had no choice.

This is why I hesitate to use the word comparison: everyone thinks immediately about price and that puts off potential retailers who are scared of eroding margins.

What I want to compare is more than price; it will be a feature comparison website rather than price comparison. In this industry, it's hard to make like for like comparisons since the products are rather unique, so comparing on price is not accurate.

That's one big selling point of the site: to make it easier for people to find the advertiser's products. It's one place to find them all.

Also, since they are already advertising on Google, at least the big retailers, it's not as if rivals are not listed side by side, their prices just a click away. Small retailers are regional, so one in Leeds will not compete with one in Glasgow.

 

[boff]

I briefly considered listing their products in one of these ways but it sounds desperate.

First I want to have them on my side and not alienate them by taking their products without permission, whether it's legal or not. It would be starting off on the wrong foot if I upset them.

Secondly if they are not interested to simply submit now a list of their products at no cost to them, why would they be interested in paying later to appear on the site? There needs to be a minimum of interest from them, I can't strong-arm them to appear on my site.

But that gives me an idea. What I could do is scrape retailer X's products, get it on the site and then contact retailer Y and tell them their rival X is listed on the site, if they want to appear too...

 

[fisicx]

Or just drop the project. If they aren't interested in appearing on your site go find something else to compare.

Even if you did scrape together the product information it's not going to make you any money so this just isn't something worth persueing.

 

[NickGrogan]

I want to set up a comparison website in a specific industry.

I can't think of a better deal for them than what I offered - a very low risk proposition.

But what exactly are you offering them?

If I advertise using PPC, I know that people will see my ads, for the terms I want and may click on the ad to the page I want.

If I advertise in a trade magazine, I know the readership numbers, I know the target market, so I have a good idea on response rates.

You are offering me a chance to be listed on an empty website, which has no traffic, along side my competitors. So what can I expect in return? Nothing.

From the suppliers point of view your website can achieve 3 things.

1) nothing, nobody visits and the site dies
2) You use my product information to create content (which may be incorrect or out of date) that directly competes with my own website in google, you may use PPC to drive traffic to your site, potentially taking it from mine, and then you want to sell the traffic I already had, back to me.
3) Your site takes off, becomes the key website for this market. This takes more traffic from me, increases PPC costs as we compete, and your charges/commissions will increase as you dominate the market.

If the market is very big, like insurance/ home energy then there is a place as the impact of even the largest sites is minimal. But in a high value niche, I don't see it working.

 

[boff]

Hi Nick,

Good points and good analysis.

What am I offering them? An advertising platform cheaper and simpler than Google but similar in that it works on a cpc basis. Low risk compared to newspaper ads where you don't know how many people respond to your advert and if your money has been wasted in a page crowded with other ads.

Yes, the website is empty. I have to start from somewhere. I can't get 100 advertisers from thin air. But I understand that from an advertiser's point of view, it doesn't impress. Getting traffic is not a problem. Once the site is ready, I can open the floodgates.


1) Possible if the business idea doesn't work out and it seems to be going that way. In any case, it won't cost the suppliers anything. They only pay when they get the traffic.

2) Not everyone can afford the skill, time and money to do PPC, so for these guys, I won't be competing with them but in fact provide them with an alternative platform that they can handle. For those doing PPC, I may well capture/steal their traffic but if I sell it back to them cheaper, it's a win for them. Obviously it makes no sense for them to buy it back from me at a higher rate, unless the quality of traffic is better.

3) That's what I would like to happen - big enough to become to go-to point. I believe there is a gap in the market for this. There are lots of small websites out there and no central one that dominates. This is not necessarily a negative point for advertisers but a source of traffic for them. It would not take traffic from a small website that people don't know about but instead provide traffic to it. And in order to become that big, I would need to do a lot of brand advertising, so my marketing will go beyond just stealing traffic from PPC.

There is already a comparison website in the market with the biggest retailers on them, so these retailers considered #2 and #3 and still decided to go ahead.

I would have loved to discuss those points with retailers/suppliers but it never went that far. I don't believed they even thought that far, that deep.

 

[fisicx]

What am I offering them? An advertising platform cheaper and simpler than Google but similar in that it works on a cpc basis.

This only works if your website brings in targeted traffic. They won't pay you a penny intil you can demostrate a good ROI.

Fill your site with data taken from the existing suppliers sites and start marketing. If traffic builds and you start to rank well then you can contact the suppliers again. But it may well take a number of years to get yourself in a position where advertisng on your site become economical for the suppliers.

 

[NickGrogan]

Getting traffic is not a problem. Once the site is ready, I can open the floodgates.

If getting traffic is not a problem, then your idea is even less attractive. What a supplier wants is hard to find traffic, people who want to buy my products now.

Not everyone can afford the skill, time and money to do PPC

But you're offering a PPC model too, and it will be much easier to find training or support for Adwords than your site.

For those doing PPC, I may well capture/steal their traffic but if I sell it back to them cheaper, it's a win for them.

If you're buying at £1 per click on adwords, and only some of those potential customers will click through to the supplier site, how can you sell it for less than £1? You're filtering the traffic, so you need to charge more.

It would not take traffic from a small website that people don't know about but instead provide traffic to it.

By taking traffic from the larger sites? Who are also your main advertisers and revenue source.

There is already a comparison website in the market

Who owns it? One of the big retailers? What did they do to attract customers?

 

[boff]

This only works if your website brings in targeted traffic. They won't pay you a penny intil you can demostrate a good ROI.

Fill your site with data taken from the existing suppliers sites and start marketing. If traffic builds and you start to rank well then you can contact the suppliers again. But it may well take a number of years to get yourself in a position where advertisng on your site become economical for the suppliers.

Are you advising to send traffic to retailers for free until they can afford to get a good ROI?

 

[boff]

Nick,

Getting traffic at the right price is the issue.

As I said, my PPC model is much simpler. There is no auction, no ads to refine, no keywords to bid on, no quality score, etc. What you set out to pay is what you pay.

As for buying traffic at £1 cpc on adwords and selling it for less, that's how it will be. It's more complex than this and you will have to take my word for it. I work in marketing and with comparison websites and that's how it works.



What I'm offering is nothing new. I'm just taking a model that exists in many other verticals and applying it to an industry that doesn't have it yet. so that should answer the first 3 points. It works elsewhere, and from what I see in this particular industry, there is room for it and no reason for it not to work. I may be wrong with the economics - ie purchasing traffic at the right price, but that comes afterwards, after i get suppliers to sign up.



The existing comparison website in this industry is affiliated with the biggest retailer. Somehow they still managed to get others onboard.

 

[NickGrogan]

The existing comparison website in this industry is affiliated with the biggest retailer, because of this they still managed to get others on board.

A known entity in the market, with significant market knowledge and finances creates a portal/comparison site - I'd certainly want to be listed,

An unknown entity, with unknown knowledge and finances creates a portal/comparison site - call me when you've got some serious traffic and been around for a while.

Sites like this popup in b2b energy every few weeks, all claiming to revolutionise the market, drive huge traffic and all for a simple price per lead.

Most fail pretty quickly and no-one has really taken off.

 

[boff]

Good comparison and that may well be it but what's the risk to advertisers to sign up? Just some time wasted to supply a list of their products?

Personally, I wouldn't want to appear on a comparison site run by the biggest retailer - it's not going to be an independent site. Now if the comparison site is very big, that's a different story...

 

[fisicx]

Are you advising to send traffic to retailers for free until they can afford to get a good ROI?

Yes. That's how these business model start out.

Good comparison and that may well be it but what's the risk to advertisers to sign up?

It's not the risk, its the fact you haven't given them any advantages.

Now directories and comparison sites are launched all the time with the same aim as you have: to make money. 99.9% of them fail. The other 0.1% succeed because of the investment the owners put into them. This project will cost you money for years. In fact it will probably never even break even.

Sorry to be so negative but that's the reality of the situation. Your potential advertisers aren't interested so it's really not worth putting the hundreds of hours of effoert into something that may never get off the ground.

 

[The Byre]

We get offers for comparison websites and other listings all the bloody time. These people seem to think that I owe them a price list and a set of images. Hardly a week goes by without such a brilliant offer landing on my desk or in my emails. I can imagine that other people who work here get the same traffic.

Each and every one of these brilliant offers may indeed be just that - brilliant. But quite honestly, like those idiotic recorded calls that claim to solve all our problems that we didn't know we had, or tell me that they are a government sponsored initiative, it is now just the background noise of doing business.

I don't care if our business is listed on some comparison website or not.

If you want to list other people's businesses, then go ahead and list them. If you have a price list, bung that in as well. But when it comes to buying advertising, it has to have a proven track record.

 

[boff]

The Byre,
In which industry are you?

 

[The Byre]

To be honest, we are strictly B2B and C customers are just a PITA and these price comparison sites tend to encourage punters that think they are going to use our services.

But over and above that, advertising is a fine thing if it is targeted and proven. My suggestion, for what it may be worth, would be to build your website, put the prices there and compare the various offerings and shove Google Ads or something like that on it and earn a crust on the side.

 

[Deleted member 244558]

Your idea might be very good but if no one is interested then you are trying to flog a dead horse.

There's a story about a guy that had such a fantastic idea for some software, he was convinced that everyone would want to buy it so he got a loan for development and testing, he was so enthusiastic and pleased that his product would soon be out there on every smartphone in the world.
But when he took it to market after 2 years of that development he found his first test didn't yield any results so he ploughed more money into advertising only to find people didn't actually want the product. He ended up 50K in debt.

It's good to get creative and have Ideas but watch how many people get turned away on dragons den. The ones that get successful investment are the ones that find a need in a good market then product the product. The unsuccessful ones walk away still convinced of their product and can't understand why the Dragons with all their experience cannot see the value!

Remember Niche Market, then Product.

 

[boff]

Unlikely to be a dead horse as there is already another comparison site in that sector. So there has been enough interest by advertisers for them to sign up to this site.

In case people say the market is too small to have too many comparison sites, I don't think so, especially since the existing one is very basic and doesn't provide a good user experience.

The one thing I'm not certain is whether a comparison site will be profitable but that's another issue that I can only find out after trying. Right now I need to get these advertisers to sign up.

My conclusion from this thread is that I lack clout amid too many people wanting to launch comparison sites. And I have nothing to show.

 

[fisicx]

Unlikely to be a dead horse as there is already another comparison site in that sector.

But how do you know if that site is successful? Maybe the advertisers on that site have had their fingers burnt and don't want the same thing to happen again.

 

[boff]

No, I don't know if that site is successful or not. That's why I said I don't know if a comparison site can be profitable until I try it out for myself and give it a good shot. But being profitable or not is not my issue here.

If advertisers have lost money on the existing comparison site, they would have pulled out. Instead more joined, although overall, there are not many advertisers.

 

[Deleted member 244558]

You're a smart guy. If you're not sure about the market then you should weigh up whether you want to take the risks in potential wasting precious time. I can help with clout. Send me the email you sent them and their response and I'l write one that will penetrate a little deeper.

 

[Deleted member 244558]

Boff
As per my PM you can use something like this to get a response, and as mentioned if you go to my website and blog you will find lots of useful information like this and you can sign up for daily tips straight to your inbox. Obviously can't post website on here yet but if you Google Guy Webb Email Specialist you will find me pretty quick.

Please be ethical with your stories.



Subject Line: (first name) Google will not like me talking to you.


Dear (First name)

Could you be spending too much on advertising? We have a breakthrough site that is so simple and cost effective, Google should be scared!

*Tell a Story here about how you helped another business for example:

Back in August last year, a good friend of mine was starting up in business and was really struggling to bring in new sales, She was familiar with all of the big names out there in particular Google Ad words but she was wasting money hand over fist, valuable money she didn't budget for nor could she afford to throw away.

No business can afford to throw money away right?

To cut a long story short I did a lot of research spending hours of my own time and discovered that there is a better way, a more simplified solution which also turned out to be really cost effective which was a bonus.

Now I’ve decided to help other businesses large and small by using my simple methods, I believe that Google isn't the only way for cost effective advertising. I’d like to show you how easy and simple it can be and by helping you, you will also be helping me to grow my business so it’s a win win situation.

When would you be able to find some time from your busy schedule to have a 20 min conversation to explain in further detail of how I can help you?

I’m free this Wednesday or Friday afternoon after 2pm, If you would be kind enough to let me know by way of return if this is suitable for you? I would really appreciate that response so I know i’m not wasting my time.


Yours Sincerely

 

[boff]

Cheers. Nice approach.
Does length matter though? For .e.g a one paragraph letter with the bare minimum vs this ?

 

[Deleted member 244558]

Follow this formula yes length matters.

Keep to the point around 250 - 300 words

 

[AllUpHere]

Boff
As per my PM you can use something like this to get a response, and as mentioned if you go to my website and blog you will find lots of useful information like this and you can sign up for daily tips straight to your inbox. Obviously can't post website on here yet but if you Google Guy Webb Email Specialist you will find me pretty quick.

Please be ethical with your stories.



Subject Line: (first name) Google will not like me talking to you.


Dear (First name)

Could you be spending too much on advertising? We have a breakthrough site that is so simple and cost effective, Google should be scared!

*Tell a Story here about how you helped another business for example:

Back in August last year, a good friend of mine was starting up in business and was really struggling to bring in new sales, She was familiar with all of the big names out there in particular Google Ad words but she was wasting money hand over fist, valuable money she didn't budget for nor could she afford to throw away.

No business can afford to throw money away right?

To cut a long story short I did a lot of research spending hours of my own time and discovered that there is a better way, a more simplified solution which also turned out to be really cost effective which was a bonus.

Now I’ve decided to help other businesses large and small by using my simple methods, I believe that Google isn't the only way for cost effective advertising. I’d like to show you how easy and simple it can be and by helping you, you will also be helping me to grow my business so it’s a win win situation.

When would you be able to find some time from your busy schedule to have a 20 min conversation to explain in further detail of how I can help you?

I’m free this Wednesday or Friday afternoon after 2pm, If you would be kind enough to let me know by way of return if this is suitable for you? I would really appreciate that response so I know i’m not wasting my time.


Yours Sincerely

If the OP uses this letter, I'd be very interested to know if it actually leads to any conversions.

 

[Deleted member 244558]

Good shout. I'm sure lots of you would be interested with any results, good or bad. Make sure you feedback on here Boff.

 

[fisicx]

Subject Line: (first name) Google will not like me talking to you.

If I saw that in the subject line it would go straight in the junk folder. I wouldn't even open the message to see what was inside.

 

[NickGrogan]

Subject Line: (first name) Google will not like me talking to you.

I wouldn't recommend starting your email with an obvious lie. That combined with the fact it wouldn't get past even the most basic spam filter suggests this is a bad start.

The rest of it reads like a list of marketing clichés.

 

[Deleted member 244558]

Oh dear someone's out of there comfort zone.
Boff give it a go.

don't worry about opinions. It's all good feedback

 

[fisicx]

No, it has nothing to do with my comfort zone. It just reads like all the other spam I get offering SEO magic. It would get junked.

 

[AllUpHere]

I'll be honest, I don't think the letter will get much of a response. However, @guy webb has actually put his balls on the line and posted the letter he would recommend on a public forum. He has not only opened himself up to public scrutiny, but also invited the Op to report back with feedback, good or bad. Fair play to him I reckon.

 

[boff]

I wouldn't recommend starting your email with an obvious lie. That combined with the fact it wouldn't get past even the most basic spam filter suggests this is a bad start.

The rest of it reads like a list of marketing clichés.

It's good to have people feeding back their opinion.
What would you write yourself? or just as subject line?
Mine was brief, very factual and highlighting what they would gain from my site, depending on who they were.

 

[Deleted member 244558]

Come on guys. give Boff your further tips, comments and suggestions.

 

[Deleted member 244558]

It's a bit sad that within a few hours of me given a forum member some advice all we had were negative opinions, not one constructive criticism, just negative.

And.

Since then further advice has been asked from Boff but not one response! It's bit poor really isn't it.

I did say in the first instance that the project probably wasn't a goer but was still prepared to offer an alternative, Isn't business about failing and learning?

Try something and if it doesn't work, learn from it and try a different approach.

If you're all so quick to jump on the bandwagon then give the man some proper advice so he can grow and learn.

The sad thing is Boff will probably not tweak my message or formula now because of the fear of failure driven by your critisim, so we will never know whether my balls should be cut off or not.

You should have just waited for feedback and results then provided me with the correct punishment or praise.

Moving on.....

 

[fisicx]

He has had lots of advice. But he still thinks this project has legs so not a lot of point in making suggestions. It's all negative because nobody thinks it's a good idea.

The forum is full of posters who all thought they had the next big thing and there are very few that ever succeeded. Great idea are just that, great ideas. Even moreso, they are YOUR great ideas. If nobody else thinks the same then it's doomed to failure - watch Dragon's Den for more exmaple.

 

[boff]

He has had lots of advice. But he still thinks this project has legs so not a lot of point in making suggestions. It's all negative because nobody thinks it's a good idea.

The forum is full of posters who all thought they had the next big thing and there are very few that ever succeeded. Great idea are just that, great ideas. Even moreso, they are YOUR great ideas. If nobody else thinks the same then it's doomed to failure - watch Dragon's Den for more exmaple.

How can you know if my idea is bad when you don't even know in which industry it is? There are loads of comparison websites out there, some more successful than others. There is one comparison site in my targeted industry so I don't see why mine is wrong.

Many great businesses were started off the back of what was deemed to be a bad idea. If you don't try, you won't know; if you don't sow risks, you'll never reap rewards. If everyone listened to others telling them their idea was wrong, there would be very few businesses around, especially innovative ones.

But nowhere did I ask if this project was good or not. All I ask was if my approach was wrong and I got some good useful feedback on that.

 

[fisicx]

The idea of the comparison isn't wrong. What isn't going to work is making the suppliers do all the work.

You need collect the information and publish it on the site - that's how comparison sites work. At some point in the future you can demonstrate traffic and leads and offer premium listings but that's not going to happen until you have scraped/collected/researched the content for the site.

Sorry if I come across all negative but if you want to build a site like this you have to do all the work.