• Increase pay per click conversions & ROI by including a price in your ad

    by  • April 1, 2008 • Pay Per Click • 4 Comments

    Many people have the misconception that all PPC clicks are created equal when they come from the same source with the same keywords. But user intent plays a huge part in conversions, and if the people who click your ads are looky-loos without any intention of buying what your ad is advertising – at least not at the stage of the buying cycle they are in – then those clicks you have paid for don’t convert at all.

    When you are selling a product that is not exclusive to your site, especially with high-ticket items or items that people tend to shop around for to find the best pricing, you end up paying for clicks from people who are just checking to see if you have the best price or not, and they don’t have the intention of buying from you right then… unless you were fortunate enough to be the last site they checked (which goes against regular PPC techniques where you want to be the first click) AND you had the best price. And obviously, you will have lower conversions and a low ROI (return on investment) when you do have a high percentage of non-buyers.

    And as many web marketers know, often consumers don’t practice store loyalty unless you are really impressed them previously or you are a huge brand, such as Amazon. But if you aren’t fortunate enough to be size of Amazon, you likely have noticed that there is a definite trend for consumers having the “best price wins” mentality. And part of why ROI is dropping for advertisers is because many more visitors are clicking in the research phase to see which site is the winner in that lowest price contest.

    When you have someone searching for a specific product… meaning very specific such as the full product name or the brand with a product number, such as “Canon Rebel XTi” or “XBox 360 Elite”, including a price in the ad copy description can help prevent those just price shopping from clicking your ad, when they can see your price right in the description. If you offer free shipping as well, you should include this as well. If your price is good enough compared to your competitors, those that click on your ad will be in the buy phase. It is also important to see what your competitors are priced at, especially if they are using price in their own ad copy. Amazon.com has been doing this more lately with specific types of products, so if you know Amazon is advertising on your product keywords as well, it is worth doing competitive research. Don’t forget geolocation when you search!

    First off, you also need to ensure you are tracking your conversions (yes, I am still surprised by those who are not) and ROI. To test this, you will need to create a new campaign, not just rotate the ad copy within the campaign. This is because Google choses the ad copy that has the highest resulting CTR rate, but in this case you are tracking ROI and conversions to determine the success. You will see a lower click through rate on this ad copy since the price hunters won’t need to click, but your ROI should go up, since you are paying less for actual conversions. Then you want to compare this to your ad copy without any pricing information in the ad, to determine which ad copy is most successful.

    Do note, that CTR rate isn’t the key, because this is what many advertisers focus on. With Google AdWords focus on it when it comes to their quality score algorithm, many advertisers have begun focusing on CTR as their main metric. It is your ROI that will be your determining factor in whether the pricing ad copy works. Want to explore this a little more? Read The most important pay per click metric is not click through rate.

    When including price in your ad copy – especially if you are an affiliate advertising something through the affiliate program – you need to monitor pricing so you can adjust your pricing within the ad copy accordingly if the pricing changes. Unfortunately, be aware that changing the price in your ad copy can reset the ad’s AdWords history. So if the price changes from $19.99 to $19.98, you might decide that it isn’t worth changing, but if the price changes to $14.99 then you probably should :)

    Do be aware this won’t work for all types of products, especially those that are market priced (ie. everyone has to sell the product at a set price) or ones where there just isn’t the “lowest price mentality”. Then you will want to skew your ads on the customer service, shipping or other areas in the market that will appeal to potential buyers and turn them into customers. However, I have used this with clients and seen a definite increase in ROI, especially in competitive markets where there were a lot of AdWords or YSM advertisers targeting the identical product search term.

    Be sure to subscribe to my feed, I have many advanced pay per click & AdWords posts on deck for the coming weeks. And you can view all my previous Pay Part Click posts if you want a kick start on some of the advanced PPC tips and techniques I have already posted.

    About

    Jennifer Slegg is a longtime member of the SEO community and is an expert on social media, content marketing, Google AdSense and search engines.

    4 Responses to Increase pay per click conversions & ROI by including a price in your ad

    1. Pingback: Jennifer Slegg Makes the Case for Prices in Your PPC Ads | sidkaplan.com

    2. Pingback: Using geolocation targeted keywords in PPC ads for consumer confidence at Jennifer Slegg - Search Engine Marketing Consultant

    3. April 4, 2008 at 9:07 am

      What do you think about including a price as a pre-qualifier?

      After having great click-thru rates on our PPC ad, with low conversions, we’re concerned that the issue is not in the marketing but in the expectation of the searcher. For example, someone searching for a book on sexual harassment training is presented with an Amazon ad. The searcher may have automatically expected a book like that on Amazon to be priced $15-$25 range. However, clicking-thru, they see this is actually a professional compliance guide that’s priced at $49.99.

      I’m thinking, put the $49.99 right there on the ad, to prequalify shoppers who might have clicked thru and left because of the price.

    4. Paul Da Silv
      June 6, 2008 at 1:18 am

      Interesting article – however…

      Although, yes, you are correct in saying ROI should be the overiding objective – you do still need CTR to be high – there is a balance you need to acheive.
      With the QS algorithm taking into account CTR of the ad – if your CTR is pony(although perhaps converting well), you will end up losing ad rank, paying a higher min CPC which then will damage your ROI also.

      Increasing your ROI is all well and good but increasing volume of sales is also important.

      The strategy here may only be serving to make it more efficient, spending less and reducing the volume slightly on overall sales.

      From a marketing company or PPC agency, where commission made is off the back of clients spend – there is a trade off and conflict of interests in some respects.

      Thoughts?

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