If you’re an ecommerce advertiser on AdWords take note: As of March 1, Google Price Extensions are live in AdWords for desktop searches (they have been live on mobile for some time). These extensions allow you to display your range of products or services, together with the price of each, below your main ad when your ad shows in Position 1. Price Extensions are a powerful tool to help ecommerce advertisers communicate more information to shoppers to better qualify potential customers before paying for a click.

AdWords Price Extensions

A screenshot of AdWords Price Extensions on a mobile device. Image via Google.

What to Expect?

Google’s research indicates that Price Extensions can drive significantly higher CTRs. In some cases, Google also reports stronger conversion performance. We would expect to see improvements in conversion rates, as shoppers unwilling to pay the requested price are unlikely to click the ad in the first place. In this way, Price Extensions can help you drive more clicks by taking up more page space, while also excluding clicks from shoppers who are searching for a cheaper product and are unlikely to convert.

Should You Use AdWords Price Extensions?

We expect that Price Extensions will demonstrate particularly strong performance for retailers, since they allow you to show the actual price of your products to consumers before you pay for a click. In the following situations, we expect that Google Price Extensions would improve performance.

  • If you’re an ecommerce retailer, you should test Price Extensions in most cases. They will allow your ad to occupy a significantly larger area of the search results page, while also allowing you to communicate additional information about pricing and selection to shoppers. However, see below for a few types of advertisers for whom Price Extensions might not improve performance.
  • If you produce and sell a product that is also sold by resellers, Price Extensions will allow you to demonstrate your price advantage clearly in your ad. This should help you win more sales over your resellers.
  • If you’re an ecommerce reseller, you can use Price Extensions to highlight specific product lines or brands. You can use them to demonstrate your price advantage for certain brands, or to prominently display your higher-margin or more popular items.

There are some situations where Price Extensions likely will not improve performance, and in this case you should be very careful about testing them, and only expand them if performance is strong.

  • If you have custom pricing, or if the actual price typically varies significantly from the stated price on your website, then be very careful about testing Price Extensions. The difference between the stated and actual prices could turn off many shoppers.
  • If you sell a high-end version of a product that is significantly more expensive than other competitors, displaying your prices prominently could cause a decline in traffic as shoppers default to your cheaper competitors. However, this could also be a targeting strategy. For example, if you sell high-end driftwood coffee tables, showing your prices could help to exclude clicks from shoppers seeking coffee tables from Ikea or Craigslist.

How to Test Google Price Extensions

Setup for Price Extensions is quite simple. First you input the following information for three to eight items:

  • a header to describe the product or service
  • a very short description related to the header
  • the price
  • a final URL

AdWords will automatically format this data to display as a clickable extension underneath your ads when your ads show in the top position.

When beginning a test with AdWords Price Extensions, make sure to begin with a limited test applied to a few campaigns. This will allow you to evaluate performance and make adjustments in poor performing areas before they can impact your entire account. Similarly, make sure to pay attention to all of the metrics that are relevant to your business. If Google Price Extensions drive stronger CTRs but poor revenue performance, then you should consider changing your extensions or not running them at all.

AdWords Price Extensions are a powerful new tool for ecommerce advertisers to share more information in their ads and better qualify shoppers before paying for a click. For most retailers, they are definitely worth a test.