Google’s automated discounts as a shopping feature

Want to know more about this new pricing tool? Keep on reading.

Google Ads automated discounts is a new pricing tool using real-time data and artificial intelligence to attract customers into sales.

What does this mean? The optimized price is displayed in your ads. When users click on it, they are redirected to your page showing the actual price available (this resembles to plane tickets, for example). 

How do automated discounts work?

Google’s AI is in charge of adjusting the price of ads after analyzing large amounts of data. Once you set the minimum and maximum price range allowed, Google’s system considers price elasticity, trends, and market prices to determine optimized discounts.

Would you implement it in your business? Let us know in the comments below. 

How to set it up

1. Implement conversion tracking: this can show you what happens when a user interacts with your ad
2. Set minimum and maximum sell price
3. Determine the cost: you can either set it yourself for items you want the automatic discount to work with or you can let Google’s AI determine it for you
4. Integrate pricing controls on your website

Our Take

Google’s automated discounts are a great conceptual feature that we could experiment with. However, it may be tricky to trust Google’s AI with something as sensitive as the price of your products because it directly affects your profit. 

Price sensitivity, elasticity, and revenue management are pricing concepts that have been optimized for decades in different industries, such as airline tickets. It is great to have a tool to test possibilities of increasing revenue or profitability, but it’s not clear yet if you can choose a limited amount of products to test this with on shopping campaigns. 

Do we have some type of control of limited exposure to avoid potential catastrophic scenarios? 

As expected, we will continue analyzing this new feature and we’ll let you know if Google announces any changes. Stay tuned!

About Quantikal

Quantikal is a data-driven performance marketing agency based in Buenos Aires, Argentina. We help clients scale their business through profitable digital ad spending by constantly obsessing over clients’ key metrics. Quantikal’s experience working in diverse online companies in marketing roles including media buying allows us to provide solutions in the ever-demanding increase of marketing performance, doing more with less thus becoming a strategic partner.