Last updated on May 30, 2023

Using price monitoring software 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 dives into a test on the impact of pricing on shopping ad performance and how PPC specialists can use pricing monitoring software (even those who can’t adjust the 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 is a future performance metric

The benchmark price is an important indicator of future performance for your products. Based on your product price versus the benchmark you can predict how well a product will perform within your Performance Max campaigns.

A product that generates revenue (Hero) today that becomes higher priced than the benchmark, will probably become a budget depleting product (Villain) tomorrow. Because it will still generate clicks, but no longer sell as well compared to when it was cheaper than the benchmark.

This can have a major impact on your campaign performance. Since it was one of the 10% of your products that generated 80% of the revenue.

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

So, pricing has a major impact on your campaign performance but most PPC specialists don’t have direct control over product pricing. Still there are two things that you can do.

  1. Share pricing and performance data with colleagues
    Share pricing and performance data internally with stakeholders. As it might not only affect your online campaigns but also impacts product sales in stores. Additionally, they might be able to change the product pricing which might help you improve the performance of the shopping ad campaigns.
  2. Add a predictive performance layer in campaigns
    You can also add a predictive performance layer in your campaign segmentation by integrating the price benchmark as a custom label in your feed. That way you can shift the advertising budget to products with a higher expected performance. Like Villains that are below benchmark. 

Price Monitoring Software

As price has a major impact on your ad performance, we developed a pricing monitoring tool for retail and e-commerce. This allows digital marketing leaders and PPC experts to follow the price developments of competitors. You get insights into which competitor is selling your products and how they are priced at a glance.

Our price monitoring tool, the Pricelizer, is integrated with our Shopping Ads optimization tool. This gives you both the product price and performance data in one overview. Here are two ways to efficiently monitor the prices of your competitors:

  • Choose your competitors
    As not all webshops might compete with you, it is possible to select which competitors you want to include in the analysis. 
  • Select your product (categories) based on performance
    You can choose to only follow products that fall into one of the Labelizer categories based on ad performance. For example, your Heroes and Villains. That way you have a nice overview of your most important products and don’t make unnecessary costs.


Exporting pricing and performance data 

As stated before, it is important for PPC specialists to share pricing information with stakeholders that are responsible for the pricing of products. That’s why you can easily export and share this information via a file or a link. You can share a csv with buyers or connect it to a feed management tool.

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 won’t directly result in a revenue increase. While changing the price of a Villain has a big chance of turning that product into a Hero. It is also important to monitor your Heroes to see if you can raise the price without hurting the campaign performance.

That is why we have added the labels to the export file. Together with information on which competitor had what price, and the lowest price in the market. By adding margin data into the mix stakeholders are able to decide if it is possible to adjust the price. If you want to learn more about price competitiveness in shopping campaigns, discover these three cases.

Start monitoring your competitors pricing

To help you in competing in the ad auction we offer a free 30-day trial for Producthero and Producthero Pro. Join over 6,000 e-commerce organisations and 400+ digital agencies in Europe. Start your trial today.

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