Ever heard of a recommendation engine? If you’re in e-commerce, you probably have. Leading e-commerce retailers such as Amazon use recommendation engines to generate massive conversions. The newest e-commerce and monetization tools make heavy use of recommendation engines because they work. For example, CodeFuel’s total monetization solution drives e-commerce with real user recommendations and intelligent algorithms.

We Want Answers!

The future of search is semantic and predictive. In other words, search engines will try to understand the meaning of your phrase, and they’ll try to predict what you need before you need it. Google Now, for example, can answer vocal queries, tell you when your flight is leaving, and remind you to pick up your dry cleaning.

This has led some to conclude that we don’t really want search engines, we want “answer engines.” Most of the time, when we ask Google a question, we aren’t treating Google like a database, we’re asking it a straightforward question.

For instance: “What does ‘monetization’ mean?” or “What is a recommendation engine?”

We Want Answers

Sometimes Google will provide us with the answer on-screen, so we never have to leave the Google search page. How convenient! The next thing you know, Google will be giving us recommendations for burger joints, pizza places, and vacation destinations. After all, Google spends a great deal of time tracking our online behavior, which makes it easier for the search giant to offer us only the most relevant, time-saving suggestions and recommendations.

About Recommendation Engines

Every time you visit your favorite retailer, that retailer is probably tracking and storing your online behavior – it’s just the way the world works. Amazon, for instance, keeps track of your browsing history, your purchase history, your reviews, and synthesizes this information into a sort of profile. Amazon can then offer you more relevant products as you shop.

This works extremely well, and for good reason! Recommendation engines offer real value. For instance, instead of forcing you to search through a site for all the popular and relevant items that might appeal to you, an e-commerce site can just bring them directly to you.

After Amazon took its recommendation engine full throttle a couple years ago, it saw an increase of almost thirty percent in sales. Amazon uses its recommendations both on-site and off-site through email marketing. Amazon uses pretty standard marketing metrics in their email marketing and recommendation practices, but also throws humans and custom revenue-prioritization algorithms into the mix.

According to one analyst at Forrester, these recommendation strategies could increase conversions as much as 60%.

What Recommendation Engines Do

Recommendation engines work by learning from the user. They show the right offers at the right time, and high-quality recommenders, such as DisplayFuel, only display non-intrusive ads that are contextually relevant.

As we’ve seen, recommendation engines boost conversions. They do this for several reasons. One reason is that they automatically enhance a website design by adding content that is always relevant and appealing.

Customers also stay on-site longer. The more relevant, valuable products that a user is shown, the more likely they are to continue shopping, keep browsing, and add more items to their cart. In the long term, this increases the value of the customer in terms of revenue and loyalty.

Recommendation engines also provide in-depth analytics and insight into the mind of the shopper. You can learn more about what your shoppers want, what they like, what they don’t like, and how to optimize the shopping funnel on your site or in your app.

They are excellent monetization tools, since they can advertise products or services without being intrusive. An app, browser extension, software program, or website can use advertising as a monetization method.

Should You Use One?

If you’ve got an appropriate app or website, absolutely! Every e-commerce site should be outfitted with recommendation engines: in the same way that “related post” widgets keep readers on blogs, recommendationers keep shoppers on-site. And the longer a user is on your site, the more money you’ll make.

The key to any successful advertising effort is relevance and value. Ask yourself if your ads are relevant and helping your users. A front-and-center banner ad is completely different from an unobtrusive, contextual recommendation that only appears when it is asked for.

Certain types of apps and websites that deliver information with a search bar may be able to benefit from a recommendation engine. Shopping sites, coupon apps, niche websites, and, of course, e-commerce sites can all benefit from a recommendation engine.

Recommendation engines are fast becoming the norm in today’s world. Whether you’re a search engine or an e-commerce platform, recommendation engines are just one more way to boost conversions, retain users, and add more value.