Are Coupons and Promotions Worth Your Time?

By Shannon Glass | @shannonkglass | Account Manager at Hanapin Marketing

Who doesn’t love a good sale? You see a commercial, receive a mail-flyer, or an email and it immediately catches your attention when something is said to be “on-sale”. While these methods are still going strong, coupons and promotions in the digital realm are as well. Personally, I am more apt to view and research a product that has any type of sale language than I am a product that appears to be regular price.

So when it comes to coupons and promotions, do they actually work or do they just increase overall views and traffic? As it is for most things in digital, the short answer is that it depends on the business and what the promotion or coupon is. A simple yes or no won’t suffice. In this post, I will walk you through what exactly coupons and promotions are and some winning and losing examples.

What are Coupons and Promotions?

If you are looking from the search side of things, they can be shown in the form of text within the ad copy or as an ad extension. In this first example, the advertiser chose to include the promotion (40% – 50% off) in the headline, however, the text can be included in the headline or description.

In this second example, the advertiser utilized promotion extensions to highlight the promotion. By utilizing promotion extensions, you are capturing more ad space and ensuring that the promotion stands out. For more information regarding promotion extensions, check out Promotion Extensions: A Quick and Easy Boost for Ecommerce PPC Campaigns.

In this final example, a coupon is utilized with Google Product ads. The item on the far left includes a tag that says “Special offer”. Once clicked, the user is presented with the details of the offer, when it expires and the code that needs to be applied during checkout in order to receive the offer. For more information on Merchant Center Promotions, view this Google Support article about Merchant Center basics.

So, do they actually work?

Now that we have gone through a quick breakdown of what the forms of coupons and promotions are, let’s chat about if they actually work or not.

Note! As mentioned above, success should be determined by the advertiser at the account level. Just because they were or were not successful in one account does not mean they will perform the same in another.

Below we have a test involving general text ads that contained no promotion running alongside text ads that contained a promotion of 30% or more. Final results concluded with the promotion seeing a 200% lift in conversion volume and a 64% decrease in cost-per-acquisition. It is clear that the promotion drove more conversions and won the test.

In this next example, we saw the reverse in performance. Final results here concluded with a 64% lift in conversion volume and a 20% decrease in cost-per-acquisition in favor of the regular pricing ads. In this instance, we chose to move forward with the regular pricing ads.

Conclusion

Both of the examples included in this post utilize the same strategy of simply including promotion text within the ad, however, we see opposite results. This eludes to the fact that testing is key. The days of manual ad testing (Check out this article from 2012: Ad Test and You Shall Receive) are leaving us for more automated ad testing practices.  With new initiatives in Adwords, we know that the more ads the better and that letting the data determine which creative to use is best.

My Recommendations: When it comes to promotions and coupons, I highly recommend testing and allowing the data to speak for itself. Depending on seasonality, promotion type, industry, etc. performance will vary across the board.

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