Automated discounts is an add-on feature in Merchant Center that uses Google AI to help increase your gross profit by optimizing discounted prices for products in your Shopping ads on Google.
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Benefits
Automated discounts can help improve your product performance and increase your gross profit while saving you time, effort, and cost.
- Optimize product selection and prices: Automated discounts analyze actual and estimated changes in product demand, prices, and market signals to identify products and discounted prices that will help attract customers to your online store without needing to beat all of your competitors’ prices.
- Increase product performance: Timely discounts that are optimized for your inventory and overall performance can help increase conversion rates for products that receive impressions in your Shopping ads.
- Reduce effort and cost: Discounted prices are regularly optimized for you, which allows you to spend less time and fewer resources researching product selection and prices.
How it works
Automated discounts continually analyzes data — including actual and estimated changes in product demand, prices, and market signals — to estimate how often your products will be shown in Shopping ads, clicked on, and purchased at multiple prices. When estimates identify timely discounts for products that will help increase your gross profit, automated discounts optimize prices in your Shopping ads to help attract customers to your online store. Customers who click on those Shopping ads will see the optimized prices on your product landing pages and during checkout.
Note: If you use Merchant API to manage your inventory, the sale price optimized by automated discounts, [gadPrice], and the prior price, [priorPrice], are available in the Products sub-API.
You choose which products can be discounted
You choose which of your products can be discounted in your Shopping ads. Typically, 10-40% of your chosen products are discounted at any time. The more products you choose, the more flexibility you allow automated discounts to help increase your product performance and gross profit.
You limit the size of discounts
You set minimum prices of at least 5% below a product’s current price, but not any lower than you’re comfortable with. Optimized prices are typically up to 20% below current prices, but will never exceed the limits that you set.
Example of a product’s price with automated discounts:
- Product’s current price: $100
- Your minimum price: $70
- Discounted price range: $95 - $70
Estimates and discounts are based on performance, market signals, and more
Automated discounts continually analyzes your product performance and market signals to optimize prices in your Shopping ads, which it does several times a day based on the latest gross profit estimates. Estimates and optimized prices are based, in part, on the following data:
- Impact of potential price changes on product demand (also known as price elasticity)
- Impact of potential discounted prices across your inventory
- Seasonal and historical trends and events
- Your cost of goods sold (COGS)
- Your purchase conversions from Google Ads
- Your product details
- Your revenue
How automated discounts uses your data
Google is firmly committed to the privacy of your business data. When you set up automated discounts, you’ll be asked to provide the cost of goods sold and minimum prices for your products, which it uses to estimate your gross profit and to optimize prices in your Shopping ads. Google will never share this information.
For more details on privacy concerns while using Google products and services, review Google's Terms of Service.
For details on how Google handles personal information, review Google's Privacy Policy.