Price-comparison sites may have recorded a dramatic increase in traffic from consumers seeking to cut their household spending, but they have not yet been able to benefit from the downturn.
Last week, Moneysupermarket.com announced that, despite receiving 120m visitors to its website in 2008, its earnings had fallen by 9%. This prompted its chief executive, Peter Plumb, to announce plans to slash the company's marketing budget as part of wide-ranging cost-cutting measures. The site, which compares prices for financial services, travel, utilities, broadband and motoring, spends most of its £84m budget on online search ads, with a further £18m on TV ads.
Its woes have been compounded by last summer's withdrawal from the secured loans market of FirstPlus, at that time the biggest loans provider participating in its comparison service, but Moneysupermarket, as is the case with many of its competitors, faces wider problems - not least that many of the sectors in which it operates are particularly vulnerable to recession.
Moneysupermarket's chief financial officer, Paul Doughty, says that the behaviour of the site's users is reflecting a broader shift in consumer habits as they reduce their expenditure on items such as 'weekend break-type travel', with fights and hotel bookings down.
'[We're seeing a] general loss of confidence all over the market,' says Ian Henderson, managing director of advertising agency Totem. 'People are just sitting on their hands and avoiding decisions they don't absolutely have to make, for fear of getting it wrong. They don't need price-comparison sites if they're not going to buy anything.'
Another possible explanation for the falling revenue is that the growing number of consumers using comparison sites are doing so to get information before going directly to the provider or retailer, meaning that the sites lose their commission.
A more fundamental problem, and a direct result of the financial crisis, has been a fall in the volume of products banks are offering, as well as a backlash from some firms that are limiting the number of products they offer through the sites, or pulling out completely as they believe they can attract customers more cost-effectively themselves. Direct Line has never participated in price-comparison sites, while Aviva has withdrawn to launch its own web and phone service that gives its details both of its own and rivals' products.
'All the price-comparison sites will have felt the squeeze,' says Neil Saunders, consulting director at retail research firm Verdict. 'They're all quite similar and there's only so many ways you can actually compare things. In order to retain visibility, it really does come down to how they promote and advertise themselves.'
Moneysupermarket has announced a full review of its marketing spend and is weighing up whether to withdraw from TV advertising as Plumb, a former managing director of dunnhumby, tries to reach his goal of targeting its customers more accurately.
The site may not have much choice about how it implements its cost-cutting programme - advertising is its biggest expenditure - but it's clear that Plumb and Moneysupermarket's new marketing director, David Osborne, will have their work cut out building the brand on a smaller budget than last year, against the backdrop of a recession.