Using price benchmark data to influence shopping ad performance

Product pricing has a huge impact on the performance of shopping ads and Performance Max campaigns. That is why it’s crucial to use pricing monitoring software for retailers. It’s logical, as people who shop online can easily compare prices. If multiple ads offer the same product, with a different price, people will first evaluate the lowest priced option. This article explores the impact of pricing on shopping ad performance and how PPC specialists can utilize price benchmark data or monitoring tools—even if they don’t have direct control over product pricing.

How can your shopping ads compete with other retailers?

While consumers may be loyal to specific online stores or discover products on social platforms, many people rely on Google to compare prices or to look up extra product information. That is why retailers and e-commerce organisations want to appear on the first page of Google.

How can you get your advertisements to show up on the first spots?

In the article about the Shopping Ad Ranking Factors we dive into all components that influence your position in the search engine. Today we will focus on the product price and using price monitoring software as this has a huge influence on your competitive powers.

As we all know, Google generates revenue by driving traffic and conversions. They get paid for each click on an advertisement. That is why Google rewards retailers with the lowest product price with a better ranking, as these products get more clicks and are more likely to get a conversion as consumers are often looking for the lowest price. So, a small decrease in pricing can lead to an impressive increase in advertisement impressions for a product.

What is the impact of pricing on an advertisement?

Below you can see a case from one of our advertisers. The graph shows the benchmark price of the advertiser versus the indexed price of the market. The advertiser wanted to test what the impact of pricing was on their campaign performance. So they decided to lower their prices from 5% above to 5% below the index price for one week without changing their campaign settings (displayed at the green 1).

In the graph below you can see the campaign performance before and during that period (at the green 2). When the advertiser was cheaper than the market there was an instant boost in clicks, conversions and conversion value. This shows how important the effect of pricing is on the campaign performance.

Price Benchmark Data: understanding future performance

The benchmark price is a key indicator of how your products will perform in the future. By comparing your product price to the benchmark, you can predict how well your product will perform in your Performance Max campaigns.

A product that’s currently one of your best performers (Hero) might become a budget-draining product (Villain) if its price goes above the benchmark. This is because it will still generate clicks, but it won’t sell as well because it’s now more expensive compared to the benchmark price.

This shift can significantly affect your campaign performance, especially since the top 10% of your products often drive up to 80% of your revenue.

What can you do with pricing information, if you can’t adjust product prices?

While pricing plays a significant role in your campaign performance, most PPC specialists don’t have direct control over product pricing. However, there are two strategies you can adopt:

Share pricing and performance data with colleagues
Collaborate with internal stakeholders by sharing pricing insights. Adjusting pricing doesn’t just enhance your online campaigns—it can also drive in-store sales. Stakeholders can leverage this data to refine pricing strategies and improve overall campaign performance.
Add a predictive performance layer in campaigns
Use the price benchmark data as a custom label in your feed. This allows you to segment your campaigns and allocate budgets more effectively, focusing on products with higher expected performance. For instance, Villains priced below the benchmark may represent opportunities to increase visibility and drive conversions.

Price Benchmark Data in the Producthero Platform

Since price directly impacts ad performance, we’ve developed a Price Benchmark tool to help monitor your pricing against competitors. This tool is integrated into the Producthero Platform, allowing you to see both performance data and pricing benchmarks in one place. With it, PRO users can:

See Benchmark information of each product and export data
You can filter products based on the Labelizer Strategy categories, such as Heroes and Villains, to focus on your most critical products. That way you have a nice overview of your most important products.
Visualise price benchmark history over time by clicking on a specific product.
Use the price benchmark labels in a supplemental source to be able to segment your campaigns based on price benchmark data.

Exporting pricing and performance data

The value of having both the pricing information and the campaign performance using the Hero, Villain, Zombie and Sidekick labels makes it easy for stakeholders to understand what the potential uplift in revenue would be after a price change:

Lowering the price of a Zombie product may not increase revenue significantly.
Adjusting the price of a Villain has a strong chance of turning it into a Hero.
Monitoring Heroes could help you determine if you can increase their price without harming performance.

This is why you can export a file that includes your products, their Labelizer performance labels, actual price, benchmark price, and price benchmark label (Below, Above, or At Benchmark). By adding margin data to the mix, stakeholders can make more informed decisions about whether price adjustments are viable. If you want to learn more about price competitiveness in shopping campaigns, discover these three cases.

Start monitoring your competitors’ pricing using price benchmark

To help you in competing in the ad auction we offer a free 30-day trial for Producthero and Producthero Pro. Join over 15,000 e-commerce organisations and 900+ digital agencies in Europe. Start your trial today.