Sunday, August 19, 2007

The impartiality of price comparison sites

Fascinating article on Reuters about the rise of and strategy behind the price comparison site.

The focus is very much on the financial services sector but there are some lessons for the travel industry, especially in terms of public perception.

In a pretty scathing opening, writer Jennifer Hill says:

"The marketing conceals strong commercial motivation: these are profit-making businesses, raking in billions of pounds in commission and advertising from product providers."

Sites mentioned in the piece include MoneyExpert.com, MoneySavingExpert.co.uk, SimplySwitch.com, uSwitch.com, Gocompare.com and ComparetheMarket.com, as well as Moneysupermarket, owner of Travelsupermarket.

Worth a read...

Kevin May, editor, Travolution

Technorati tags:

3 comments:

Anonymous said...

Price comparison sites are just another form of publisher / advertiser. Some make money from commission, others CPC - and just like all other forms of advertising of course they are commercially motivated. You never hear anyone complaining about Television or Newspapers not being impartial, or making billions of pounds in advertising revenue - why is that?

The price comparison bashing began when MoneySupermarket announced it was going to float and the traditional insurers saw a considerable proportion of their profits fade because they could no longer charge ridiculous prices. TV and Newspapers have also seen a large proportion of their advertising revenue move to price comparison sites because it performs a lot better and is easier for advertisers to measure.

Price comparison sites level the playing field and de-complicate products that were once very difficult to compare, leading to more competetive prices and fewer cloak-and-dagger pricing models. At the end of the day, the insurers, TV and newspapers may not be too happy, but the consumer is better off - and if a few billionaires are made in the process, what do we care?

Dan G. said...

"You never hear anyone complaining about Television or Newspapers not being impartial,"

You do, all the time. Witness opponents to Fox News, Rupert Murdoch's acquisition of the Wall Street Journal, just about everything else Rupert Murdoch does, and the leftish leanings of the BBC.

Granted, not all of these alleged and real biases are motivated by advertising. Fox News has found a profitable niche, pandering to the right-wing; Rupert Murdoch uses his media vehicles to push a political agenda, ultimately to benefit his business interests (notably, The Times' support for Tony Blair); and BBC journalists and producers are disproportionately young, urban, female and from multi-cultural backgrounds, all of which point to left-leaning sympathies.

The Times and the BBC trade on a reputation for impartiality - and yet they are not. Further down the media food chain, where subscription fees are harder to find, the relationship between advertising and press coverage is more closely linked, even if it is implicit. Many of the trade publications targeted at the local government market charge a "colour separation fee" for printing a news story based on a press release.

Price comparison sites certainly serve a useful purpose and, simply by offering a greater choice, benefit the consumer. But it makes sense to treat claims of impartiality with a pinch of salt.

cDVDs.co.uk said...

I dislike the 'attacks' on price camparison sites, nor more recent than that of a large insurer and TV advertiser who claims, in a negative light that price comparisons are 'middlemen'...

However, if it is this middleman which saves consumers money and more importantly time, then what's the problem?

Price comparisons, depending on the sector will of course not include everyone, but seeing the recent trend, should they not all be investing in product feeds?

I run a successful CD and DVD comparison site which is accessible at http://www.cdvds.co.uk and we compare prices from over 50 retails, which would overwish take users a substancial amount of time and effort. The trend merely follows what users want and that's better value of money and simplicity.

Si