The main objective of monitoring/tracking ad prices is to adjust your prices accordingly to the market competition, thereby increasing your ad rank, and as a result increasing your impressions, clicks, and sales. This article looks at 3 ways to monitor the price competition of shopping ad campaigns with GrowByData Marketing Intelligence specifically designed to power smarter and faster eCommerce. It examines why you should be tracking the average ad prices for products, the most popular ad price range for your products, and which price segment was most popular (at an auction level) for your products’ category.
Google is the first place most people search for a product and is the most competitive platform of all. Google Algorithm examines and analyzes the search query, estimates what phase of the purchase funnel you fall into, and presents a set of results. If the search is for a product, Google will present the most relevant ads based on their evaluations. There are many factors that Google will consider before showing the list of Google Shopping ads. However, as a customer, price is an important factor in making our purchase decisions. As a result, Google will frequently present ads deemed within an optimal price range, to increase the likelihood of getting a click on an ad.
Below are the 3 simple ways of monitoring price competition in your shopping ads campaign with ad intelligence tool data. The intraday shopping ads capability from your target location down to zip code level with multiple devices using a powerful online marketing intelligence tool ensures you do not lose out on any sales opportunities throughout the day with various insights and alerts.
One of our clients reached out to us based on a trend they noticed where they felt like they were seeing some higher prices for their ads in ad auctions. We ran a price analysis, which showed that there was a significant increase in their average prices in the first half of the month. It had increased from a $15 baseline to a $37 average price, between the first and second week.
Drilling down to the granular data showed that several custom products had started to creep into auctions and pushed the average price up. With their average price at times being 5X the cost of the lowest price, their conversions most likely had struggled.
This is a perfect use case where our data can help ‘prove’ marketing hypotheses with real data. Also, the great thing about our data is that we were able to provide them with the product URLs and screenshots of the products in question that had been driving up the prices. In order to get the biggest benefit of this kind of data, an analysis needs to be performed on a keyword (or a smaller group of keywords) which can be done using our Search Intelligence Software Solution, to make the right decisions for your ad campaigns. Our solution is able to provide on average how other brands are pricing the same products you provide, and where they are ranked on the Google shopping ads auction. Monitoring average prices can help you understand at what prices other brands are successfully attracting customers, in comparison to you.
To explain the importance of knowing which price range is most popular in a category, we examined which price ranges were most popular for our selected keywords, as shown in the graph below. We found 77% of the products ‘above the fold’ were in the price range between $0-$50, compared to only 68% shown ‘below the fold’ in this price range. This shows Google prioritizes or prefers showing cheaper products ‘above the fold’ more often.
In the graphs below, we take a closer look into the price range distribution of Custom Ink and their top competitors. The data showed that Custom Ink had product ads for all three price ranges ‘below the fold’, but they did not have any products show up ‘above the fold’ in the $50-$150 price range, compared to their competitors. They could target products in this price range to show up ‘above the fold’, to increase their visibility and findability to a digital shopper.
The graph below shows how the ad auction was divided based on ad coverage by price quartile in Google Shopping for Custom Ink and their top competitors in March 2021. SpreadShirt, AlliedShirts, and RushOrderTees had their highest ad placement in Price Quartile 1. Whereas, CustomInk and Zazzle had the majority of their ad placement in Price Quartile 3.
This shows that CustomInk and Zazzle ads were normally priced towards the higher end of the ad auction. The ad coverage based on price quartile can differ based on specific regions, time, keywords, etc. Therefore, knowing what price quartile your ads are placing on versus your competitors’ placement can help you decide what sort of ad campaigns you should run.
In terms of average position on the ad auction, Custom Ink had an average position of 9, Zazzle had 8, AlliedShirts and RushOrderTees had 7, and SpreadShirt had an average position of 6. Taking the average position and the price quartile into account, we see that the brands which had more ads in Price Quartile 1 typically had a better average position on this set of keywords.
Check our our Search Advertising Resources for more Insights
In Conclusion
We all know that price is an important factor which is heavily weighted in our shopping decisions. Therefore, advertisers must have the right information and data in order to succeed. Keep in mind, having the price right doesn’t always mean having the cheapest price. This would imply that it’s a race to the bottom. The data above suggests that is not always the case, as customers will evaluate multiple other factors beyond just price to make decisions. With this in mind, advertisers should analyze all available data and update their prices accordingly, to generate the greatest value for their business.