You don’t need Drew Carey to help you figure out if “The Price Is Right” for your products. SEM ad copy testing can determine not only the most profitable price point, but also the most lucrative way to messaging pricing. Inspired by “The Price is Right’s” Double Prices game, Boost Media shares how to do this.
Let’s say you are an online retailer selling $100 shoes that are on sale for $90.
One of these messaging tactics boosts CTR by 103% which drives a substantial lift to CPI. Which is it?
If you said, “Save $10,” you are correct! Ads containing “Save 10%” drive a 45% drop in CTR and an even larger 63% reduction in CPI compared with ads that do not contain the “save [X%]” phrase.
You can either state the actual dollar price or generically reference “price” in your ads. Which of these methods drives a 32% lift in CTR and an 84% CPI growth?
If you answered, “$90”, you are correct! Including the word “price” without stating the actual price draws a dramatic CTR lift but corresponds to an 87% reduction in CPI.
Lessons for your CMO
Look to SEM ad testing to pinpoint a profitable price point. Boost’s data shows that price matters. Moreover, every retailer included in our dataset is a premium retailer. The effect might be even greater for budget retailers. Use SEM testing to determine the right price: you can quickly and easily test $90 vs. $99 vs. $85 to understand how pricing impacts your Average Order Value (AOV) and total conversion volume helping you to identify the most profitable price point. (Just be sure your website reflects the pricing listed for each ad copy variation!)
Small differences can make a big impact. Once you hit on the right pricing, use SEM testing to uncover the nuances of how to message that price. Using our $90 example above, the ad that says “Save $10” would have generated 463 sales upon receiving 100,000 impressions. The ad that says “Save 10%” would have generated only 57 sales. With a $40 AOV, that is a $16,000 revenue difference just from changing one character.
Tune in next Tuesday for more CMO insights plus retail SEM ad copy benchmarks.
*CPI refers to Conversions-Per-Impressions, a metric which takes both conversion rate and Click-Through Rate into account. Click here to see our methodology.