NEW Price Competitive Tool in Google Merchant Center

Advertisers may have spotted a new addition to Google Merchant Center in the last few days. A tab labelled as Price Competitiveness now allows advertisers to see how their product pricing stack up against their competitors, giving a current ‘Your Price’ vs ‘Current Benchmark Price’ in addition to a current percentage differential vs benchmark in addition to a historical benchmark % too.

By far the best performance view to review is splitting by Product (SKU), though for a top-level view advertisers may also want to split by Category or Brand to see if there are any major differences. Advertisers can also look at pricing data of specific date ranges of either 7-days, 14-days, 30-days or all time.

What is really interesting about the feature is that the ‘Current Benchmark Price’ factors in price data from all advertisers (including your own) with the metric being click-weighted instead of being given as an average.

What does click-weighted mean?

Click-weighted simply means that the metric factors in the breakdown of clicks between different advertisers to calculate a benchmark price, rather just calculating an average between all advertisers, which could skew the data when an advertiser has priced a product significantly higher/lower than the rest of the market.

For example, in a simplistic Shopping auction there are 5 advertisers selling the same product. Included below are the advertisers with the price they are retailer the product for and the percentage of clicks they were able to generate from appearing in Shopping results:

• A – ￡60, 27% of clicks.
• B – ￡65, 21% of clicks.
• C – ￡65, 17% of clicks.
• D – ￡72.99, 5% of clicks.
• E – ￡60, 30% of clicks.

The output of averaging the prices would give a pricing benchmark of ￡64.60 ((60+65+65+72.99+60/5)), whilst a click-weighted average would give a lower benchmark at ￡62.55 ((60*27+65*21+(65*17+72.99*5+60*30)/100)).

Whilst it may not seem like a large difference, it can be a great indication of where clicks are going on Shopping whilst also providing an overview of opportunities to either become more price-competitive with lower-priced retailers or look to increase prices on products which are performing well to increase margin.

The tool is likely to be extremely useful for advertisers in highly competitive, low value (<￡30) auctions, where consumers are likely to put a product's price as a priority in their decision-making process of a purchase over other factors such as level of customer service, returns policy, delivery etc.

What’s best is that advertisers can download the pricing data directly from Merchant Centre, apply it to product performance data and begin to look for growth opportunities immediately.