How price competitiveness influences shopping campaign performance – 3 cases

Ever wondered why Google has added Price Competitiveness reports to your Google Merchant Center? It is because your price position has a big impact on the performance of your Shopping campaigns. In this article we show 3 interesting cases that explain changes in performance using price benchmark data. 

There are two ways your price competitiveness influences your shopping ads performance:

1. Price is a ranking factor: advertisers with a better price are more likely to show.
2. Price is a conversion factor: advertisers with a better price are more likely to have a higher conversion rate.

We will show you 3 cases of how we analyzed changes in performance caused by price:

1. Price is a ranking factor

Case 1: Drop in ad impressions and clicks when competitor lowers its price

Take a look at this advertiser. They saw several big drops in volume in their shopping campaigns, so we decided to analyse pricing against competitors. We found that one or more of its competitors initiated a sale period for the product group, which is easy to spot in the price benchmark report:

Want to see this graph for your products? Go to your Merchant center > Growth > Price Competitiveness

You can create a report in Google Ads to analyze the performance of these products compared to the price competitiveness:

Want to create this report for your products? Go to your Google Ads account > Reports > Report > + Custom

The impact on the number of ad clicks is easy to spot when we analyze the impressions and clicks during the period their price position changed. The number of impressions went down massively and the number of clicks even more. 

Case 2: Volume boost after discounting some products

Another advertiser lowered the price of some of its products. The impact became visible in the price benchmark report. We see a growing number of products at or below the benchmark price and a lower number above the benchmark price. 

Want to see this graph for your products? Go to your Merchant center > Growth > Price Competitiveness

In the sale period, we see the number of impressions and clicks going up:

Want to create this report for your products? Go to your Google Ads account > Reports > Report > + Custom

Conclusion: Price is an important shopping ads ranking factor

Analysis leads us to the following conclusion: Google is much more likely to show your product ads when your price is better than your competitors. 

2. Price is a conversion factor

Case 3: How price position influences conversion rate

It goes without saying that if your product price is lower than your competitors, consumers are more likely to buy at your store. Your price against competitors changes over time, so it can be helpful to monitor this. For an advertiser we ran a report in its Google Ads account to analyse this: 

Want to create this report for your products? Go to your Google Ads account > Reports > Report > + Custom

You can easily create this report in your own Google Ads account. Make sure to add the Item ID, the Conversion rate and the Benchmark product price difference as columns to your report. You can now analyze the impact of your price position on the conversion rate. Products with a positive benchmark product price difference are likely to have a low conversion rate. 

How to optimize your results with price benchmark data?

Based on price benchmark data you can two things:

1. Segmentation: Save advertising spend on products with a bad price position and push products that have a good price compared to competing advertisers
2. Price optimisation: Find out which products are interesting to lower the price a little bit to radically improve their performance. 

Make better use of your price benchmark data

Producthero can help you in making your price benchmark data more actionable. We do that by creating a connection, so you can use this price benchmark data in your campaigns, in your feed management tool or in reports.
Check how we can easily help you with a Price Benchmark connection

Interesting further read on our blog: Price Benchmark Data – Use cases