Updated on May 10, 2023 | 2 minute read
As a Data Analyst, I speak to ecommerce managers from all kinds of industries. And there’s a misconception I come across all the time: that you shouldn’t advertise or bid for low-priced products.
For some retailers it might be the right choice, but not for others. So how can you know if it’s right for you? It all comes down to your first-party data.
I was recently speaking to a retailer offering free delivery with orders over £25 who felt it was unnecessary to spend money to bid on low-revenue items. “Surely they just bounce back, wasting your ad spend, right?”
Well, maybe. But before we agreed to remove the Shopping listings from the client’s Merchant Center, I thought I’d have a quick dig into the data.
So what’s happening here? In this scenario, these cheaper products are known as gateway products.
Gateway products are low-value items which lead to a much higher value sale.
For instance, a sports retailer might bid more aggressively for a low-value item like a pack of six golf balls, knowing that his visitors go on to add more items to their basket - like a t-shirt, a scorecard holder, and some training equipment - before checking out.
And while the retailer only bids for a click on golf balls, they make a sale at a much higher value.
Don’t doubt the revenue power of your low-value items. But take this moral with a pinch of salt: it all comes down to what your first-party data reveals. I’m not recommending pushing all your budget to these items, but if your Google Ads data points to higher AOV from some of your low value products, I’d suggest bidding more for converting traffic. Or rather bidding the right amount for the most relevant traffic if you can.
Access to first-party data can help you make more informed decisions on Google Shopping, as well as on other channels, and inventory decisions.
Do you know what your gateway products are?
Katherine is a Senior Data Analyst working closely with the Client Success team to provide an accurate and high-quality Google Shopping service to retailers. Katherine loves painting, pottery, and her two dogs, Bert and Ernie.