Minimum Advertised Pricing is a controversial subject, unless you’ve never heard of it. In fact, it’s kind of boring unless it affects your business directly. Then it REALLY interests you.
If you are a PPC agency that takes on e-commerce clients, than you need to be aware of this. It’s likely you will someday have a client with a MAP policy on some/all products… and since Google Shopping is becoming more and more essential for e-commerce, it’s better to have a heads-up now than when you first go to advertise for that client and get a nasty surprise.
A Boring (But Necessary) Definition of Minimum Advertised Pricing
Minimum Advertised Pricing is when a retailer is required to only advertise the price of a product above a “minimum” price established by the manufacturer. Note, this is not technically illegal since the retailer can actually sell the product for whatever price they want to sell it for… they just can’t advertise a price below MAP.
MAP is something instituted by manufacturers to help preserve their brand. It’s more complicated than that, but that’s the gist of it. They want to make sure retailers don’t sell their product too cheaply & bring down the brand, so they often require retailers to sign and abide by a MAP contract.
A MAP contract differs by manufacturer in how stringent it can be, but it has often been a thorn in the side of e-commerce sites.
As an example of what a MAP policy may look like, here is GoPro’s MAP policy online: GoPro Minimum Advertised Price Policy. Note, I have no affiliation whatsoever with GoPro, using their MAP policy as an example has to do strictly with the Google Search I did to find any MAP policies made public.
But wait, there’s more.
Here’s the problem when it comes to PPC Advertising. Google Shopping policy conflicts with the stricter MAP policies so your client trying to compete in a crowded market has to choose between getting kicked off Google for showing “different” prices (the MAP prices) from what you sell the product at (the actual lower price), or having their orders frozen by the manufacturer until they change their prices on Google (which will then be wrong so they get kicked off of Google).
Perhaps this isn’t as big of a problem with smaller electronic devices (say a GoPro) where consumers see a fixed price of $200 everywhere and purchase from the retailer they are most familiar with, but I have seen this be a huge problem in the B2B e-commerce side of things, especially with high priced industrial equipment (being intentionally vague here to maintain client privacy). Consumers are far less “loyal” to the retailer, and far more price conscious. If you can show them they will save $200 on this $4,000 piece of equipment, they will buy from you. This is where getting creative on helping the consumer see past MAP is essential… unless Google Shopping comes along and blocks those creative attempts as well.
What’s the Issue? MAP Pricing and Google Shopping
This is a policy meant to discourage bait-and-switch and is one to be applauded, right?.
The nature of the conflict is that Google Shopping requires the price in the Google Shopping feed for the product to be identical to the “final” price on the Landing Page and in the checkout process. The user can’t land on the page and then add the product to the cart and discover that the price changed from what was advertised on Google Shopping. The pricing must be fixed.
At first glance, this makes sense and is a great policy, right? I mean, I don’t want to see a Mac Pro computer advertised for $500 only to get to the Landing Page and realize it’s actually $5,000. This is a policy meant to discourage bait-and-switch and is one to be applauded, right?.
Well, most of the time.
The problem arises when you are trying to abide by the MAP policies and Google Policy at the same time. The humorous thing is that a company forced to show MAP pricing in Google Shopping will actually be LOWERING the price for the user if they show a lower price in the cart.
I’m not sure anyone’s going to complain about that at the water cooler the next day…
“Ah gee Ralph, you’ll never guess what. Stupidest thing ever, I was looking online for a TV and I clicked on a link and what do you know, that idiot company actually lowered the price on me $200 when I added it to the cart! I couldn’t believe it! I called and chewed their CSR for that, no one’s going to lower prices on me and get away with it!”
Another complication here, is that the Google Shopping price policy is somewhat vague when it comes to this. Again, MAP pricing seems to have slipped underneath the radar here. Google Shopping policy mentions “club pricing” and auctions (only fixed pricing allowed), but is somewhat nebulous when it comes to MAP pricing specifically. This simply adds to the confusion.
Google Shopping (The Rock) >>> Retailers <<< Manufacturer with MAP (Hard Place)
So here’s the rub:
Conflict Stage #1: See, if you show the actual, low price in your Google Shopping feed (the low price that will make customers happy and get people to buy from you) then your manufacturer gets mad at you and threatens to stop shipping your products until you fix the prices since you are advertising a price below the MAP pricing for that product.
Conflict Stage #2: If you show the MAP price the manufacturer allows you to show but then drop the price in the cart when the user clicks the “See Lower Price in Cart” button, then Google suspends your feed because you are not selling your product for the price you put into the Google Shopping feed, since Google requires the price to be the same.
Is There a Solution?
Unfortunately, for those stricter-than-normal MAP policies there isn’t really much hope for retailers to advertise without breaking either Google or the manufacturer’s policy. As e-commerce goes more and more the way of Google Shopping, this will continue to grow in importance and frustration for retailers under strict MAP policies.
My suggestion would require tweaking and thought, but initially I do think there is a fix for this. I think Google Shopping should have a field in the feed for MAP pricing. Perhaps there could even be a little “alert” in Shopping results for a product where the retailer is using MAP pricing (if allowed by MAP policies, of course 🙂 if this field is populated. This way Google and the user would be alerted to the fact that the reason the price that the user ultimately sees is different (lower), is because of policies.
If the “MAP Price” field is populated, than Google will not show the “Price” field, but will use that lower price to check against the “final” price the retailer is selling the MAP product for. Admittedly, this may require manual approval and the retailer may have 24-48 hours to wait for approval… but that is still a lot better than being unable to upload products at all, or be tempted to break one or the other’s policies.
Of course, Google could always go the route my client suggested: The final sale price of a product must be equal to or less than the advertised price on Google Shopping. After all, if it’s less than the advertised price, that will just make for a happy consumer, right?
Either way, something needs to be done as MAP policies continue to be written, and Google Shopping continues to take over SERPs. Have you ever run into this problem before? Anything you would add? Let me know by tweeting at me here:
— Kirk Williams (@PPCKirk) May 20, 2014