How Google Ads Can Reduce Price Elasticity for My Brand
The digital marketplace has transformed into a complex maze filled with countless choices. According to a recent Google study, 62% of European consumers—and 67% globally—find it increasingly exhausting to make purchasing decisions amidst the overwhelming abundance of choices. This "paradox of choice" isn’t just a theoretical dilemma; 56% of shoppers have abandoned or postponed purchases due to decision fatigue. In today’s hyper-competitive market, pricing power has emerged as a critical differentiator for brands. The ability to command premium prices without losing customer loyalty is a direct reflection of strong brand equity. A recent study by Kantar and Google indicates that brands with strong pricing capabilities are able to set prices up to double those of less competitive rivals while still sustaining consumer demand. This phenomenon is particularly relevant in industries like travel, where Travelstart’s shift from volume-based to value-based bidding in Google Ads increased revenue per booking by 50% and overall revenue by 27% year-on-year.
I. The Correlation Between Brand Equity and Pricing Power
Brand equity directly influences a company’s ability to maintain pricing power, especially during economic fluctuations. Kantar’s analysis of a U.K. skincare brand revealed that a 14% price increase resulted in only a 7% drop in sales volume—far less than the 10% decline predicted without prior brand-building investments. This resilience translated to a 7% revenue boost, with 76% of the gains attributed to marketing efforts. Likewise, over a nine - year period, McCain's brand - building strategy decreased price elasticity by 47%, facilitating a 44% rise in base sales.
These cases underscore a key insight: price elasticity isn’t fixed. It can be shaped by consistent messaging that emphasizes quality and uniqueness over promotions. For example, Minnano Bank’s app-centric approach—using UGC-style vertical ads in Google Ads—improved engagement by aligning creative content with customer lifestyles, reducing cost per account opening by 40%. By contrast, brands overly reliant on discounts risk commoditization, as seen in the travel sector, where Travelstart’s initial focus on booking volume led to unsustainable bid inflation.
II. Google Ads Strategies to Enhance Pricing Power
Transitioning from volume-based to value-based bidding is a game-changer for brands aiming to strengthen pricing power. Travelstart’s adoption of return on ad spend (ROAS) bidding in Search Ads 360 allowed its AI algorithms to prioritize high-margin routes, such as “joburg to cape town flights,” during peak search periods. This shift was supported by dynamic templates that adjusted ads in real-time based on flight availability and search trends—a tactic impossible with manual optimization.
AI tools like Smart Bidding in Google Ads also mitigate data gaps. For instance, The Very Group used enhanced conversions and consent mode to track anonymized user behavior, lifting measured conversions by 19% and ROAS by 7%. Similarly, Minnano Bank’s integration of Firebase with Google Advertising enabled predictive audience segmentation, targeting users likely to open accounts or apply for loans. These strategies demonstrate how first-party data, when activated through Google’s ecosystem, can refine bidding to protect margins.
III. Building Brand Equity Through Digital Marketing
First-party data serves as the fundamental building block of contemporary brand equity. The Very Group’s transformation from a legacy mail-order business to a data-driven retailer illustrates this shift. By automating daily data uploads and expanding its usable audience pool, Very achieved a 13% uplift in conversions. Its predictive credit model, powered by Google Ads and Google Tag Manager, identified high-value customers likely to use financing options—a segment crucial for long-term profitability.
Creative execution also plays a vital role. Minnano Bank’s vertical video ads in Google Advertising, which highlighted features like automatic savings “Boxes,” resonated because they mirrored how users engage with mobile content. Likewise, Travelstart’s route-specific ads with real-time pricing (e.g., “Fly JNB to CPT for ZAR599”) reduced friction by aligning ad copy with search intent. These tactics show that brand-building isn’t just about awareness; it’s about embedding value into every customer touchpoint.
IV. Measuring and Communicating Marketing’s Impact
To secure buy-in for brand-building initiatives, marketers must align KPIs with financial outcomes. Tools like Google Analytics 4 (GA4) and floodlight tags in Google Ads provide granular insights into price elasticity and revenue per booking. For example, Kantar’s pricing sensitivity tests can quantify how much brand equity offsets price hikes, as seen in the U.K. skincare case. Similarly, Travelstart’s focus on ROAS—rather than cost per acquisition—made its 27% revenue growth attributable to marketing efforts.
Collaboration with finance teams is equally critical. The Very Group’s cross-functional “ad-tech squad” bridged silos by linking Google Ads data to profitability metrics like customer lifetime value (LTV). This approach mirrors Minnano Bank’s Data Creation Group, which standardized metrics across departments to avoid localized optimizations. By framing marketing as a driver of pricing power—not just sales—brands can justify investments even during budget cuts.
Topkee’s AI-driven creative production service enables brands to replicate this precision marketing. By analyzing market trends and user behavior patterns, it ensures that messaging is in line with consumption habits on a specific platform. Topkee’s attributed remarketing strategy puts this principle into practice. By segmenting users based on behavioral triggers and deploying customized remarketing ads.
V. Future-Proofing Pricing Strategies
AI’s next frontier is predictive pricing. The Very Group’s credit model, which forecasts repayment behaviors, hints at how machine learning in Google Advertising could anticipate willingness-to-pay thresholds. Similarly, Performance Max campaigns—which unify bidding, creative, and audience targeting across Google’s network—offer a glimpse into integrated solutions that balance brand and performance goals.
Privacy-centric tools like enhanced conversions in Google Advertising will also grow in importance. As third-party data diminishes, brands must leverage consented first-party data to maintain targeting precision. Minnano Bank’s cloud-based infrastructure, which processes real-time data across Tokyo and Osaka, exemplifies the technical agility needed for this transition.
Topkee’s TTO platform enables similar predictive capabilities by automating conversion tracking and smart bidding, ensuring ads target high-value segments while preserving margin integrity. Topkee’s TMID tool mirrors this approach, offering customizable tracking templates that replace UTM parameters, enabling brands to attribute conversions accurately across campaigns without relying on deprecated identifiers. By centralizing first-party data tracking across multiple touchpoints (e.g., website interactions, ad engagements), businesses can build granular audience profiles.
Conclusion: The Competitive Advantage of Pricing Power
The intersection of brand equity and pricing power is where sustainable profitability lies. From Travelstart’s revenue surge to McCain’s elasticity gains, the evidence is clear: brands that invest in long-term equity can navigate price pressures with far greater resilience. For marketers, this means shifting from short-term conversion metrics to value-based strategies in Google Ads that align with financial objectives.
Ready to future-proof your pricing strategy? Partner with experts who can harness Google Ads’ AI tools to build—and measure—your brand’s pricing power.
