The ultimate guide for using prices in Dynamic Product Ads
May 15, 2023
Fundamentally, any offer has two main aspects; the benefit and the cost.
Almost certainly, your Dynamic Product Ads already focus on the product, its features and unique selling points. But if you stop at that, you might be leaving out a key piece of information - the price.
The goal of advertising is not only to attract users interested in the offer, but to attract users interested AND willing to pay the price for your product.
A customer who loves your product but finds your price too high is not going to convert at the end of the day.
You might be tempted to play around with your targeting settings and try out new audiences, but in reality, the biggest increase in performance comes from improved content. Not many advertisers realise that 47% of the ad's effectiveness comes from the quality of the creative, while only about 9% comes from targeting.
So when trying to reach better results, putting work into your designs should be the first step - and lucky for you, we've got over 1.3B impressions worth of data to share.
Showing prices in your Dynamic Product Ads makes sure that customer expectations are aligned from the moment they first see your ad.
No more bouncing off the product page because the price was higher than expected.
Showing price in your catalog ads
The argument behind showing prices in your paid social content is rather simple, and can be summed up with just two words: "qualified traffic".
As we mentioned in the introduction, it often happens that a user clicks on a Dynamic Product Ad, only to bounce off as soon as he finds that the price is not as low as expected. But this can be fixed by setting the expectations early - directly in the design.
In our analysis of over 1.3 billion impressions on Meta, catalog ads that show price information in the design reached a 20% higher performance on average.
That's quite the improvement for such a simple change.
Additionally, we also found that showing prices was correlated with a 10% lower Click-through Rate, and a 33% increase in the on-site Conversion Rate.
This just goes to show that getting as many clicks as possible is not the key to success. Instead, it is important to make sure that the right people click, and that the traffic coming to your store is actually qualified to buy your items.
Different ways to show the price
A price splash
A very common way to show prices in ads is what we call "a price splash". It is basically placing the price on top of a circle, rectangle, or a custom shape to make it more noticeable.
This has the benefit of drawing more attention it, as the shape can have a vibrant colour and pop out of the design clearly. Additionally, many users will recognise a price splash, instantly knowing where to look for the price information.
In certain cases, a price splash may not fit your design, or brand identity. In those scenarios, you can create a beautiful ad by simply integrating the price into the text in your ad.
It can still be valuable to visually separate the price from all other text by perhaps giving it a different colour, different size or font. That way, users will notice it subconsciously and don't need to spend effort actively looking for it.
Another thing to consider is the use of decimal spaces for your in-content prices.
This decision mainly boils down to your marketing and pricing choices. Some advertisers choose to price their items using decimals (i.e. 9.95$) to influence the cost perception. You can read more about that in out Pricing psychology article.
More options to consider
- Stating "low price" or "sharp price (skarp pris in DK)"
- Offering a price guarantee, or "price match"
- Showing off "Buy now, Pay later" options
Selling cheap vs. more expensive products
For shops selling low-end priced products, it's extremely good to show prices, a 100% higher performance on average. The Conversion Rate on site stays the same at 33%, BUT, in the case of cheap products, it actually increases Click Through Rate by 51%.
Meaning that when the product is cheap, people are more likely to click when you show the price - and also more likely to buy once they have clicked.
If your products are cheap compared to your competitors, then the price is typically your best selling point - which is why you should definitely show it.
But for shops selling mid-range and expensive products, we only see a 10% increase in performance on average. The Click-through Rate is actually 19% worse than the average, due to discouraging unqualified traffic, while the Conversion Rate on-site is slightly higher than average (35%).
Multi-brand stores vs. single brand
Showing prices performs better for multi-brand stores, than for single-brand stores. When selling multiple brands, showing prices performs 16% better, while it's only 5% better on average for single brand stores.
The biggest reason behind this is that multi-brand stores don't experience a much lower Click-through Rate when showing the price (only 5% lower CTR), while single-brand stores see a 28% lower Click-through Rate.
The on-site Conversion Rate is much better for single-brand stores (46% better), while it's a bit less significant for multi-brand stores (22% higher on average).
This suggests that people buy from multi-brand stores more because of the price, and from single-brand stores because of the product.
Campaign vs. always on designs
Campaign designs (i.e. Black Friday, etc.) perform a whopping 57% better when showing prices, whereas "normal" designs not made for specific campaigns ("always on") only perform 4% better, on average, with price than without.
Both campaign-designs and normal designs with prices in them see a lower Click-through Rate, the big difference is in the conversion rate on site:
Campaign-designs with prices have a 61% higher Conversion Rate on site compared to campaign-designs without prices (i.e. Black Week ads without the price). For normal ads, designs with prices in them "only" convert on-site at a 17% higher rate compared to normal ads without price.
When you're running a campaign you should DEFINITELY show the price. But when creating your "always-on" design, it's a good idea to test whether showing the price improves results for your business.
Large vs. small brands
Small shops typically get less results by showing prices. Small brands experience a 33% worse performance on average when showing price, whereas medium brands see the best performance improvement of 29%, and large brands a good 19% improvement as well.
Small shops typically don't have the advantage of high volumes and great prices compared to medium or large brands. Small brands should probably focus more on building up awareness through their products itself, instead of the prices.
Create designs with prices in minutes
Here at Confect, it's our mission to make it as simple as possible to reach higher performance through improved designs for Dynamic Product Ads.
What if we told you that you could make your ads 20% more effective (on average), in just 4 simple steps?
- New design
- Insert text layer
- Insert the product field "price"
Read the full how-to guide here - or learn how to customize your Dynamic Product Ads designs with Confect here.