In today’s competitive landscape, it seems everyone is looking for ways to stay ahead of the game and increase sales. One strategy you may not have heard of is Price Competitiveness Based Bidding, and this is what we’ll dive into in today’s blog.
If you’re looking to improve your existing strategy, these tips will help you stay ahead of the competition and boost your bottom line.
Over the last few years, we have witnessed many changes in how we run shopping ads. Alongside these changes PMAX and shopping optimisation have also changed, requiring more consolidated shopping campaign structures than before. Feeding through Google ads we rely heavily on 4 areas to shape the performance of our shopping ads:
- Shopping feed – having a detailed and optimised feed allows your products to perform well within Google’s algorithm.
- Audience signals – encourages Google’s algorithm to show to the right audience.
- Business data – for example, stock levels of products allowing you to align business needs with marketing.
- Measurements – ensuring you have the right measurements allows for detailed and accurate examination and review of performance. Businesses need to be aware of changing measurements for example ensuring they have the ability to measure ‘buy now, pay later’ schemes.
Price competitiveness is often overlooked in its importance in shopping optimization, and refers to how your products rank in comparison to competitors identified by their GTINs. According to a Crealytics 2022 study, being competitively priced leads to significant improvements in both impressions – by 131% – and conversions – by 280%. Being price competitive allows for your products to show more often under Google’s algorithm. Attractive pricing also appeals to customers!
There are various methods to identify how price competitive you are. The first is through Google Merchant Centre’s Growth programme, who are able to provide a generic price comparison report.
Another alternative is to utilise a third-party platform: at Demandmore we use Shoptimised. Running our feed through Shoptimised allows us to optimise our feed easily with rules and mass changes.
Ensuring that our products have GTINs is crucial and the function to view this en masse allows for our products to be compared to others in the market. A further benefit of using Shoptimised is its ability to clearly illustrate price competitiveness with a detailed breakdown of each product.
How can we use price competitiveness to our advantage?
Once you have reviewed your price competitiveness data, the next stage is to incorporate price competitiveness-based bidding. You can add custom labels to your products to segment based on categories such as the following:
In doing so you are able to set out various campaigns for each segment, Shoptimised runs frequent audits and dynamically changes the labels of the products which we can use in Google Ads to automatically move products between campaigns.
At Demandmore we recommend structuring campaigns based on price competitiveness as follows:
The guide above should be reviewed in line with other segmentation metrics that align with the goals of your campaign for the best outcome, for example: margins, lifetime value (LTV), and stock volumes.
Competitive pricing and a high search volume campaign would perform best in maximising sales given that the margins on the products are good. This is because of its visibility and price attractiveness to customers.
The overall performance is also subject to the budget pushed through the campaign. Having a sufficient budget will allow for your ads to perform well as you bid competitively against competitors gaining a higher impression share.
Similarly, a competitive pricing and low search volume campaign would also bid to maximise sales. Spend would be low due to limited search volume but with a competitive price your products would be pushed forward and shown more often when searched, leading to a higher click-through rate despite low impressions.
In comparison, uncompetitive pricing and low search volume campaigns should be reviewed and determined whether there is profitability in running such campaigns that often have low ROAS levels.
Additionally, uncompetitive pricing and high search volume campaigns may include products that are not ranked 1st or 2nd but the market has a large opportunity to build brand awareness and visibility.
This could also encourage greater engagement with your site and push sales through non-branded products. Additionally, reviewing the products within and adapting the prices to become more competitive could encourage more sales.
If you found this useful, check out our other informative blogs!
Alternatively, follow us on our socials to keep up to date with our latest posts!
The post Maximising Performance Max: A Guide to Price-Competitive Bidding Strategies appeared first on DemandMore.
