Best practices for managing paid search campaigns are full of commonly held assumptions, many of which are more myth than fact—especially when it comes to SEM ad copy. This Myth Busters series tackles these misconceptions one blog post at a time. In this installment, we dispel the myth that the best price strategy is to advertise the lowest price.


The myth

For many e-commerce brands, advertising the lowest prices is the only way to win click share from the competition and convert new customers.


The reality

There’s more to price than price itself. Large dinner plates holding small portions can make restaurant entrees seem expensive, while bulk merchandise crammed onto warehouse-style shelves can make products seem inexpensive. The same line of thinking applies to price perception of SEM ads—regardless of the price tag. Here are a few concepts to put to the test as you develop your price strategy:

  • Word choice sets price expectations. Although “bargain,” “value,” and “sale” can be used synonymously, people subconsciously assign different meanings to each word. When clicking on an ad that says “cheap,” customers expect the digital equivalent of a bulk-discount warehouse shopping experience. Messaging “exclusive offer” sets the expectation of a higher-end big-dinner-plate-small-portion experience.
  • The price tag isn’t the only way to create value. Free shipping, free returns, free gifts, and the promise of coupons are just some of the ways brands can add value without competing on price alone. Moreover, positioning $10 off versus 10% off a $100 item is likely to yield different results. Although the price is the same, customers perceive it differently.
  • Price messaging effects AOV. Lowering prices may lead to more clicks or higher conversions, but AOV usually suffers in the process. When testing a new price strategy, identify the balance point between these metrics. Setting appropriate price expectations and teasing out the optimal price positioning can help alleviate strains on AOV.

The opportunity

Imagine the ROAS improvements you could realize if you were able to increase conversion rate and click volume without lowering prices or reducing AOV, while at the same time, helping customers realize the value of your products and services. Honing in on the optimal price strategy does exactly this—and SEM ad testing is an excellent mechanism for collecting data to inform your overarching price strategy.


Where to go from here

Use SEM ad copy testing to develop your overall price strategy. Qualify your audience by setting proper price expectations by testing different price verbiage. Instead of competing on price alone, consider other ways your brand adds value better than the competition. Test benefits such as free returns and guarantees. When testing lower prices, strike a balance between boosting volume and deteriorating AOV.


About Boost Media

Boost Media increases advertiser profitability by using a combination of humans and a proprietary software platform to drive increased ad relevance at scale.

The Boost marketplace comprises over 1,000 expert copywriters and image optimizers who compete to provide a diverse array of perspectives. Boost’s proprietary software identifies opportunities for creative optimization and drives performance using a combination of workflow tools and algorithms. Headquartered in San Francisco, the Boost Media optimization platform provides fresh, performance-driven creative in 12 localized languages worldwide.