The Importance of Competitive Pricing in Google Shopping Campaigns

By Tinuiti Team

Many brands use resellers to multiply their sales and to reach new audiences. While it's a compelling strategy, it can also complicate the pricing issue. Setting your own prices versus those of your competitors can determine how much inventory you move and how easily your customers can find you via search.

Why You Need to Develop a Competitive Pricing Strategy

When it comes to Google Shopping, the way your products appear can depend heavily on price. Most people use Google Shopping for comparisons; if they can find the same product for a reduced rate through another retailer, you've probably already lost the sale.

This is where market research comes in handy. Think not only about the actual price of your product, but the final price when you include shipping and any other ancillary costs. Savvy shoppers pay attention to those details.

It helps to know how people find your Google Shopping ads and what they do after they're exposed to an ad. Many shoppers never buy the products they discover via Google Shopping, either because the prices are too high or because of the results aren't exactly what they want. Either way, consumer behavior can help drive your pricing strategy.

Remember That Google Shopping Will Likely Show the Best Price

Google wants to serve up the most useful results for its customers — even in Google Shopping. If possible, the algorithm will show the best price first, and if your product has the best price, you already enjoy a competitive advantage. However, if other retailers sell the same product for a lower price, you might not get any visibility at all.

It's not just about one product or one search. Google tracks your ads' histories to determine how competitively you are priced. If you're not seeing any lift when your ad campaign, a high pricing history might have caused the problem.

Over time, Google often penalizes ads that experience sharp price increases, especially when it happens over and over again. Brands must remain cognizant of this fact; boosting the price can reduce impressions and result in higher bid prices as well as fewer conversions.

Pay Attention to Price's Impact on Potential and Current Clients

Many brands don't realize how pricing impacts their campaigns. Some retailers get more leeway than others when it comes to steep discounts, but brands have to manage this facet of business carefully.

Educate your client about why pricing matters. If they recognize a potential disadvantage in the Google Shopping marketplace, they might give you less grief when you try to adjust pricing structures. Brands can resolve pricing issues by disallowing steeply discounted prices among retailers, running extensive A/B tests for special price values, and other market research.

It's difficult to create the perfect Google Shopping campaign when you're not sure exactly what factors influence impressions, bid prices, and other results. If you're looking for ways to improving Google Shopping results, check out our report: How feed quality affects Google Shopping.

You Might Be Interested In

*By submitting your Email Address, you are agreeing to all conditions of our Privacy Policy.