Pricing effect during the peak season on shopping campaigns

The peak season is just around the corner, that’s why it is time for an article on how to handle your shopping campaigns during the peak season. This peak season will likely be different from past years due to the economic situation, therefore we focus on the effect of pricing on your shopping advertisements and performance max campaigns.

Economic down turns impact brand loyalty

As the economy is shifting towards a downturn, consumers become more aware of how they spend their money. They are more conscious about choosing if they spend money on their favourite brands versus making wise spending decisions to prepare for the future. A study by Google and Ipsos, Christmas Shopping Study, even revealed that 61% of the consumers are open to trying a brand they haven’t bought before during this peak season. 

Max Minus, PPC & Google Ads Consultant @ Freelancer
“We’ve seen Google talking about brand loyalty decreasing as a trend over the last few years & we know that shoppers will be even more keen to find a deal as we have challenging macro factors at play. This does open up the playing field for this peak, particularly if some brands have cut media spend due to their own challenges.

Some of the things I’ve been speaking about with clients is reviewing things like their Free Shipping thresholds, as small things like this can be the difference between them and a competitor, but ultimately I think consistency in the SERP will pay dividends as competitors come in and out with their offers during peak, which will likely be prolonged, again.”

Consumers are price aware

Many retailers offered lower discounts during the peak season compared to previous years. According to Google, in Q4 2020 the average discount of products was 14% while in Q4 2021 the average discount dropped to 9%. his year, discounts could be even lower. As a digital marketing manager it is something to keep an eye on as the price of your products has a huge impact on the performance of shopping ads and performance max campaigns. 

Google understands that consumers are increasingly focused on two key factors when shopping: price and quality. The more clicks ads get, the more revenue Google generates. As a result, Google tends to prioritize shopping ads for products with lower prices, knowing they’re more likely to receive higher click-through rates.

With this in mind, it is important to monitor the prices of your competitors during the peak season, especially if they offer the same products. Staying competitive on pricing can make a significant difference in how your ads perform.

Monitoring competitor prices

There are multiple ways to monitor the prices of your competitors.

At Producthero, we have developed a pricing benchmark tool that compares the prices of your products to the price benchmarks. This tool compares your product prices to industry benchmarks, so you can see if your products are priced higher, lower, or in line with the market. This gives you the insight you need to quickly respond to price changes before, during, and after key sales moments. Producthero’s Price Benchmark is used by retailers and e-commerce organizations and is available within Producthero PRO, which you can try as part of our 30-day free trial.

Hybrid consumers: online and offline shopping

According to research by Google, consumers are increasingly blending their online and offline shopping behaviors. They might look up product information or compare prices on their mobile devices while physically browsing in a store. This means that a consumer could discover a product in one of your competitor’s stores and, if your price is right, end up purchasing it online from your shop instead.

With our price benchmark tool, you can predict how well a product will perform within your Performance Max campaigns.

Ruben Runneboom, Google Ads Specialist @ Rubenrunneboom.nl
“Google Ads is changing faster than ever. It seems that every time you open the interface new features are available. All aimed at automating actions that previously had to be performed manually.

The renewed Google algorithm has proven that you can push account performance successfully if you provide the system with clear data. Adding offline sales data into your online strategy at a hybrid store is essential to feed the algorithm with the right signals. Especially during the upcoming Christmas season where you will see that people orientate online and complete the purchase in the store.

Within the Google Ads interface there are some options to notify the algorithm that a (temporary) sale period is approaching. In combination with dynamic pricing and a well-thought-out campaign structure you can stay ahead of the competition and drive your profit.”

Analysing your advertising performance

There are multiple ways to discover which products perform well. You can use Google’s best seller report, shopping insights and reports about rising retail categories to inform your strategy. Additionally, you can evaluate your products and adjust your biddings based on the performance. 

Many retailers, like G-Star, Rituals and hundreds of digital marketing agencies apply this tactic very successfully. They use the Producthero Labelizer Strategy to determine which products perform best and to push them into Google’s shopping window. Using the Labelizer Strategy they are also able to see which products don’t perform, allowing them to shift the budgets to the campaigns that actually generate revenue. Discover how G-star boosts ad campaign using the Producthero Labelizer Strategy

Adriaan Dekker, Freelancer Online Marketing @ Dertien11
“Now more than ever it’s important to embrace automation in Google Ads. For this to work, you need a solid base. Companies that can track all conversions coming from ads have a big advantage.

You need to lead the automation tools from Google in the right way or it will work against you. For e-commerce companies, this means trying to measure POAS instead of ROAS. If you know what you earn you can make better decisions in bids and structure.

Besides Google Ads, keep optimizing your landing pages. If you pay the same for a new client but have a higher conversion ratio you are growing.”

Your organisation might offer lower discounts this year due to the economic situation or even have doubts about increasing the advertising budgets during this peak season. If that happens in your organisation, I would recommend reading this article about shopping advertising during economic downturns.

In the article we highlight the effect of advertising on sales. It shows that firms who spend more money on advertising during economic downturns increased their market share with 1.7% compared to 0.6% market share for organisations that cut their marketing spend.