With so many shopping price comparison sites dominating the Internet, it feels like its becoming a saturated market. Five years ago there were only a few such websites, but today there are more than 130. Whilst it is stiff competition making it harder for these shopping price comparison websites to stay afloat, it is also down to the economic downturn.
The famous Moneysupermarket.com has recently announced that it is has made a significant loss and this has prompted the brand to restructure. They suffered a £51m pre-tax loss for the year to December 31 2008 and with figures like this, it’s no wonder they are taking action.
According to the Telegraph, the chief executive of Moneysupermarket.com has been quoted as saying that they “will review the cost base” and “extract more value from lower online and offline marketing spend”.
Many financial forecasters are predicting some shopping price comparison websites will have a hard year ahead.
As the savings account and ISAs market have been hit with the current economic climate, it is understandable why people are not concentrating on saving their money these days. Quite simply, they need it to spend.
In addition to this, it is thought that the huge expenditure on advertising is one of the reasons why price comparison sites are struggling. If you want to get your name out there and noticed then you have to be prepared to spend.
However, some might say the economic downturn has actually made people more financially aware, and this includes businesses. The rapid expansion of shopping price comparison websites is now set to slow down as many people cut back. They will stay with their trusted insurance provider because they don’t really want to start switching and making their financial situation worse.
As for Moneysupermarket.com, the CEO knows that the first job is to cut back on the large advertising campaigns.
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