Where and when your Ad appears depends on several aspects, such as the quality of your feed (good use of images, titles, descriptions, GTINs, and the use of different product options such as size and colour, are all important factors), how relevant your product is to the search, how much you are willing to pay for a click, and how your price compares to competitor’s prices.

In this article, we’ll focus on how price changes can be an effective method for generating increased exposure on Google Shopping, while also providing insight into how and why you’ll need to use this approach with caution.

If you are price-matching or offering a similar price point to your competitors, it is important to use a quality image and an effective product title to try to make your ad stand out and attract customers to your website. 

Make sure your product page is simple and clear so that, if people do click on your ad, they know pretty much straight away whether that is the product they want to buy. Also, ensure you have a smooth checkout process so you don’t lose any potential clients at that stage.

If you get a good Conversion Rate - i.e. better than your competitors - then you could afford to pay more for a click than your competitors, and that in turn will help to get you a more prominent position which could in turn generate more traffic and sales.

Price drops are a great way to boost your traffic, but they need to be treated with care. In the example above, the price drop was only a temporary drop and was increased again after a week. If the campaign is using Manual CPC Bidding and bids were increased after price reductions, it is possible to revert the bids back to their previous levels. This would likely result in traffic returning to similar levels as before the change.

If you have the Campaign on Automated bidding - maximising Revenue at a Target ROAS - it might take a while for the bids to come back down. Google’s tool has seen improved performance, so it may not drop bids immediately after the performance decreases. In such an instance, we must force Google to drop bids by increasing the Target ROAS. Once the bid has come back down to previous levels, we can change the Target ROAS back to the original level.

If you drop the price to boost traffic and improve your Conversion Rate at the cost of a smaller margin, be aware that competitors could react to your price drop by also dropping their prices. As a result, not only will you no longer have an advantage over your competitors, you’ll find that your margin has been reduced. With the price once again similar to that of your competitors, your Conversion Rate could drop back down, and now with tighter margins, you’ll no longer be able to afford to pay as much per click - meaning you could end up worse off than before the price drop.