The role of prices in Google Shopping Ads

Google ecosystem is a perfect place for every e-commerce business owner. Thanks to Google’s extensive offer, you can reach potential customers and showcase your offer in many effective ways. One of them is known as Google Shopping Ads (GSA). To make them fully effective, though, you have to take care of your prices. How can you do that? And what should you pay attention to?

Google Shopping Ads are displayed above text ads and search results on the main Google SERP page. They contain a picture of the product, the seller’s name, the store’s star rating, the price, and, optionally, a discounted price (with a small “SALE” tag).

Because they are easy to notice, are displayed in the upper part of the SERP page, and contain product pictures, they can be very effective in attracting more traffic to your online store. Moreover, GSA work very well cost-wise, too. They are settled in the CPC (cost per click) model, so you have full control over your marketing budget and can easily track the effectiveness of every ad.

Take a look at how Google Shopping Ads can look:

How to make GSA effective – pay attention to prices

The first thing most users notice are product pictures. In GSA, they are just thumbnails, so you have to make sure to showcase the product as well as possible. If your store has a lot of positive reviews, that’s also very helpful and can encourage many people to click a given ad.

However, there is one more element that cannot be neglected – the price. If you want to succeed with your Google Shopping Ads, you need a well-thought-out strategy for pricing in this specific marketing channel. Here, you ought to pay attention to four crucial elements:

DON’T BE TOO EXPENSIVE

If you want to attract many users, your products should be slightly cheaper than the competition. If you can’t afford that, make sure your prices don’t exceed the competitors’ prices by more than 10%. It’s obvious that prices are important in the entire e-commerce sector, especially now, when many customers are trying to save as much money as possible (mind you, recently, the global e-commerce sector experienced negative growth for the first time in years, -6% in Q2 2022¹).

If your ads have many views or even clicks but not many conversions (sales), that’s most likely a price-related problem. After all, you have to remember that nowadays, customers have many ways of verifying whether a given price is attractive. If they find a better offer, they will go elsewhere.

How can you make sure your prices aren’t too high? You can use Dealavo to monitor your competitors’ prices and adjust yours accordingly. You can use this tool to monitor prices in different channels, including Google Shopping. There is also one more option that can be very effective. It’s called dynamic pricing, and, in essence, it’s a price automation solution. Dealavo algorithms use AI to continually maintain the most optimal price based on your input (pre-defined rules) and market data. This way, your store offers attractive prices without needing to verify and analyze them manually.

BID HIGHER FOR CHEAPER PRODUCTS

The lower the product price, the higher the chance for conversion. You can give your ads a significant boost by bidding higher (showing your products for a higher CPC rate). That’s especially vital when you offer some products that are temporarily discounted, but this principle applies to all products in your offer that are cheaper compared to other stores, of course, provided you want to promote them using GSA. In such a situation, opt for higher advertising rates for these items.

That said, here’s how you should organize products in GSA:

1. Cheap: the highest advertising priority and the highest bids
2. Average price: medium priority, medium bids
3. Expensive: lowest priority, lowest bids

Why should you pay more for cheaper products? Why not concentrate on the most expensive items that give you higher income? Cheap/discounted products are always the most attractive ones. This is where economies of scale step in the game. It’s better to sell 1,000 cheap products and make 10,000 USD on them than to sell 100 expensive products and make 5,000 USD on them, correct?

INCREASE PRICES FOR PRODUCTS THAT YOUR COMPETITORS DON’T OFFER

It may happen that you are the only retailer offering a particular product. In such a case, getting more customers is easier because they don’t really have that much choice. You don’t have to be the cheapest one anymore, which means that you can offer a higher price. Of course, you can’t go overboard and sell a product worth 10 USD for 100 USD, but you are definitely more flexible here.

Dealavo will help you assess which products in your offer aren’t available in the market (or their availability is limited). Concentrate on them and try raising prices.

USE DISCOUNTED PRICES

On the screen above, you can see two offers with discounted prices. That’s always a good idea to distinguish your offer additionally. The discounted prices are bold and have a different color, which draws attention. You can add the discounted prices in the Google Merchant Center by using the optional “sale_price” attribute.

Of course, it is of paramount importance to verify whether your promotional price is actually promotional – you can check that with Dealavo by comparing your discounted prices with other prices available in the market.

Notes

Use a free report to check which products are worth promoting in GSA

If you have hundreds of products in your offer, it can be challenging to decide which should be promoted using Google Shopping Ads. Dealavo has selected all the key factors that have a significant impact on the results you can achieve in GSA.

Now, thanks to Dealavo’s free report, you can discover them all and get the list of the products most suited for promotion in this channel. All you need to do is fill in the form on Dealavo’s website and send your product feed along with EAN codes. It’s a good starting point to see how effective price monitoring can be.