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Old 08-23-2007   #1
NewKidOnTheBlock
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mentioning the price in an ad

Im reading Andrew Goodman's book at the moment and yesterday I read that putting the price in the PPC ad was actually not a good idea as it can prevent potentially good clients from clicking on the ad as well, etc..

To be honest I had thought this was one of the best ideas to filter out low quality traffic (people just into finding information).

Andrew Goodman gives an example of a web design company (I think?) that wanted to only get clients willing to spend 5,000+ (or so?) dollars saying that many clients might not be willing to spend as much money as that before they got to know you, etc. (I guess it's all about ltv here). That's a very convincing example of course.

But am I right assuming that this applies mostly to services not to products (at least if your main goal is making a sale, not penetrating the market to upsell later)?

Also aren't there some cases where putting the price in the ad actually is a good idea - if the search volumes are high enough? Or does more volume still win over quality of traffic in most of such cases?

(I realize that its a balancing act between CTR and profitability..and that one should be looking to find an ad for the keyword that comes close to maximizing overall ROI)

Im really just curious: Is "price in the ad" (almost) always a bad idea?
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Old 08-23-2007   #2
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Re: mentioning the price in an ad

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Originally Posted by NewKidOnTheBlock View Post
....Im really just curious: Is "price in the ad" (almost) always a bad idea?
Nobody knows. Test it and find out. Run 2 ads (using the ad variations option) with everything identical except that one ad mentions price. Same landing page of course. Use conversion tracking, and see which produces the most conversions and best cost/conversion. Why read some generic academic analysis when you can test the real thing, and for your specific industry.
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Old 08-23-2007   #3
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Re: mentioning the price in an ad

We decided a while a go to include pricing in most of our PPC ads. It does help us filter out people who simply can not afford our services. Our CTR dropped but the conversion rate actually increased.

I say test it but in general I am a big fan of displaying price in ad and on the page.
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Old 08-23-2007   #4
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Re: mentioning the price in an ad

It depends on your objectives, if you are going for volume at a lower ROI then insert a below average price or lead in, in order to attract the user to your site. There will be a certain percentage that will buy anyway.

If you are seeking stong ROI then put higher prices in your ad. You will receive less clicks but they will tend to convert more often. Thisi is similar to the economic principle the Price elasticity of demand

The offsetting factor is that as your CTR decreases, you may have to increase your max cpc which unbalances your ROI gains.

The real challenge comes when you want to dynamically insert a price into your titles in adwords. You lose quality score from resetting your ads frequently but the accuracy of clicking on a targeted offer with an actual price rather than a lead-in, pays off in conversion.
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Old 08-23-2007   #5
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Re: mentioning the price in an ad

Thanks for the input.

Of course I agree that testing it is the way to go, but I only try to learn and read a bit about PPC on the side (Im only reading one book (the one by Andrew Goodman) and a few interesting threads on this forum now and then) and won't be in a position to "play around" with PPC very soon, but having a basic understanding probably can't hurt.

And well I was almost a bit shocked when I read that part in the book, because I had thought of mentioning price as a great idea before hehe
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Old 08-24-2007   #6
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Re: mentioning the price in an ad

It depends on your business. Like the others said, test it and see. We got a 5-fold increase in conversion by including prices in our ads. CTR suffers, so you have to bear this in mind in a Quality Score world, but the increase in conversions offsets all of that and then some. YMMV so you need to test.

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Old 08-24-2007   #7
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Re: mentioning the price in an ad

It's definitely worth testing, as I think Goodman's thesis is weak. If you are selling *products* (and assuming, of course, your price is competitive), being up front about price within the ad itself can be a big driver of clicks. You might not make the sale on the first click as people will be shopping around, but if you have a good price, the customer is likely to find his way back to your site.

It goes without saying, however, if you put a price in the ad and it doesn't match the price on the landing page/checkout, then your conversion will stink. So if you frequently change the price on your product, and you can't stay on top of it in your ads, then it might not be a good idea.
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Old 08-24-2007   #8
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Re: mentioning the price in an ad

I would agree..testing is key. I have found in high priced verticles, including pricing helps bring in more quality folks (for example million plus housing). If the price is out there someone who is looking for a home in the 250k-350k range will not click through.

Quote:
CTR suffers, so you have to bear this in mind in a Quality Score world
Regarding the above quote..I recently returned from the SES show and heard something I had never thought of .. the more quality traffic you are brining to your landing page, the lower the CTR will be. It logically makes sense. If you weed out enough people to reach your target market with your initial copy, then there will only be a certain % of people who will want to click through - which leads to higher conversion and ROI. There are plenty of other things to aid in quality score - landing pages are huge, HUGE (something I knew but didn't realize the extremely large impact they have on quality score -something else I learned at SES).

When there is an instance of keeping your pricing from competitors and, thus, you do not want to display your pricing in an ad, I have found offering an incentive for the purchase is highly highly effective (so $500 off or free shipping, etc). perhaps test the two and see which is more profitable for you.
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Old 08-24-2007   #9
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Re: mentioning the price in an ad

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Originally Posted by J Clark View Post
.. the more quality traffic you are brining to your landing page, the lower the CTR will be.
I think you're putting the cart before the horse. In order to *reach* the landing page from PPC, a consumer would have had to click first. I think you mean "conversion" from the landing page, not ad CTR ...? Or "the more traffic your ad brings in, the lower your *CPC* will be" (because of the QS)?

But as for high traffic = lower conversion... yeah of course. But two things to consider: I'd much rather have 1% conversion on a million visitors than 100% conversion on one visitor! So there's definitely a place where the two have to come into equilibrium.

The point about the Quality Score is that it affects price per click (i.e., lower CPC on better performing ads, and vice versa). So that's a second balancing act: higher conversion on fewer clicks AND a higher CPC ad might not necessarily equal better ROI.

AND (second thing to consider) is that at some point if CTR is really low (regardless of conversion from the landing page), your ad will just get turned off entirely, since Google doesn't care about your conversion, it cares about clicks. So even if the calculus of CTR/CPC/conversion leads to positive ROI for you, it might be a moot point if Google disables your ads.
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Old 08-24-2007   #10
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Re: mentioning the price in an ad

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I think you're putting the cart before the horse
I don't think that is the case at all .. you have to consider the implications your ad will have - good and bad - before making it 'live'. In this case, including the price or not?
Quote:
I think you mean "conversion" from the landing page, not ad CTR
No, I mean CTR. ... if you design an ad without some type of qualifier then you will get lots of traffic - but each click costs. In other words, if you write an ad for 'plummer in CA' but only service San Diego you will waisting a lot of money. By including the text 'San Diego' you will be lowering your CTR (and I realize you can geo-target, etc this is purely to prove a point) but achieving higher quality traffic. Which goes back to my million dollar home example. I want to be seen by everyone searching for home (thus high impresions) but only want those looking for 7 figure price tag (lowering my CTR). By driving more qualified traffic (ie. those looking for a 7 figure home) I have already increased the likelihood those folks will convert.

Quote:
The point about the Quality Score is that it affects price per click
I understand that .. and it is very true. That being said, I was told from Clay Bavor, Product Manager at Google "concentrate on landing page not CTR". I'll take my chances with his advice.
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Old 08-24-2007   #11
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Re: mentioning the price in an ad

Quote:
It's definitely worth testing, as I think Goodman's thesis is weak. If you are selling *products* (and assuming, of course, your price is competitive), being up front about price within the ad itself can be a big driver of clicks.
I was gonna say something along those lines right before I read your comment hehe. It reminds me of the "long copy sells better than short copy" principle in copywriting - people can skip information they don't need, but can't read information that isn't there. (Obviously this is not universally true as having 1000's of pages with 10 important lines somewhere in them might not work better than short copy).

So the other day when I was reading this copywriting book every night before I went to bed, I walked past a couple of barber shops (exp?) in my town wondering if I should switch b/c my old one had raised prices (blabla dont wanna bore you guys ). And I realized that only one had put the prices on their shop windows and the prices would have been lower whereas all the other barber shops I happened to walk past that day did not display their prices.

And I assume I would have simply switched to the one that had the good prices and did display it, because I'm probably not outgoing enough to go into each barber shop and then ask them/or make a phone call saying: "what's the price for a hair cut?..oh Im sorry thats too expensive for me!".

It's probably sort of a usability thing, too (you dont have to jump through hoops to find out whats going on), but I just realized that displaying the price might not necessarily lower CTRs..it could actually filter out the segment of bad traffic thats not willing to pay your price and attract more people that are willing to pay that price (but not a price much higher than that). So you might get more quality traffic w/o lowering CTR (in theory).

However, I must say that Mr. Goodman also states in his book that one shouldnt listen to anyone's theory (his included he states), but simply test two ads against each other and then see what's really going on
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Old 08-24-2007   #12
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Re: mentioning the price in an ad

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Originally Posted by NewKidOnTheBlock View Post
However, I must say that Mr. Goodman also states in his book that one shouldnt listen to anyone's theory (his included he states), but simply test two ads against each other and then see what's really going on
Nice CYA move ... I should write a book filled with examples from my own experience, but include the caveat at the end of every chapter: "but you should really test this, because I might not be right."

All this having to test everything... sure sounds like a lot of work
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Old 08-25-2007   #13
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Re: mentioning the price in an ad

Actually, I didnt see it like this. I thought his advice about testing everything in PPC instead of listening to theories is good advice and admitting that he (like everyone) might be wrong about one thing or another, too...I mean you have guidelines and all, but why not test something if its possible to do it without a lot of effort in PPC?

I guess its only a problem if youre running a small PPC campaign for a small website, but for most companies it shouldnt be a problem, I guess (meaning putting the effort into the testing instead of not doing it will have a positive ROI).
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Old 08-27-2007   #14
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Re: mentioning the price in an ad

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Originally Posted by NewKidOnTheBlock View Post
Actually, I didnt see it like this. I thought his advice about testing everything in PPC instead of listening to theories is good advice and admitting that he (like everyone) might be wrong about one thing or another, too...I mean you have guidelines and all, but why not test something if its possible to do it without a lot of effort in PPC?
I was just being a little facetious I agree that everything needs to be tested, but it's important to have some idea where to start - that's where expert advice comes in.
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Old 08-27-2007   #15
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Re: mentioning the price in an ad

Yeah and his book gives a good overview of principles. I guess he probably didn't mean you should test everything (theres only so much time in a day), but he obviously gives most underlying principles in the PPC world..but if you're not sure about it, test it .
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Old 09-04-2007   #16
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Re: mentioning the price in an ad

If you put the price in the copy you could be missing out on the opportunity to sell to the people who had an arbitrary lower price point in mind. An effective landing page should be selling the heck out of the 'sizzle' to justify the cost.
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