BAM!: Branding, Advertising, and Marketing for Sponsored Search - Understanding Sponsored Search - page 133

For sponsored search, price is one key product attribute for which a consumer
close to the purchase phase will search online. There are many attention-getting key-
phrases related to price, including discount , sale , and free .
Potpourri : Pricing a product or service can get really tricky. Two examples to
illustrate this are prestige pricing and fractional pricing .
Prestige price is the practice of charging higher prices for goods or services
to give the impression to the consumer that there is added value for the cost.
Prestige pricing capitalizes on people's notions that correlate price with quality.
So, a high-priced product is viewed superior in quality to a similar product priced
for significantly less.
Fractional pricing is the practice of costing products in odd prices or a little
less than a higher round number (e.g., $9.99, $19.99, $7.97, etc.). Fractional pric-
ing is based on the psychological pricing theory that consumers ignore the last
digit and do not properly round up.
Promotion. Promotion includes all the channels and media used by a business to
communicate to customers about its products or services. Promotion is how a busi-
ness markets and sells products or services. Naturally, a business must balance com-
municating effectively while also being cost efficient.
Promotion is tied significantly with sponsored search, as ad copywriters can often
increase the response rate from sponsored search ads by simply changing the head-
line on an advertisement [ 2 ]. This improvement comes from continual testing. A rule
of thumb is that whatever copy or promotion is working today will eventually not
work, as consumer tastes change, competitors copy the essence of the message, or the
product changes. Therefore, new promotion techniques, approaches, offerings, and
strategies are continually needed.
Although there is certainly crossover, promotion is typically viewed as having six
distinct elements:
• Traditional advertising - (a.k.a., “above the line advertising” [ 79 ]) any paid com-
munications included in print, broadcast, and support media.
• Public relations - concerned with maintaining a public image for a business, and
typically encompasses official but unpaid communications, such as press releases,
exhibitions, conferences, seminars or trade fairs, and events.
• Personal selling -primarily word of mouth but can be any informal product-re-
lated communication by consumers, satisfied customers, or people specifically
engaged to create word-of-mouth momentum (i.e., not apparently paid).
• Sales promotion - specific efforts by the sales staff, usually most notable by word
of mouth, demonstrations, coupons, and deals.
• Direct marketing - marketing that reaches customers by communications directly
addressed to the customer.
• Internet/interactive marketing - marketing of products or services over the
Internet, including that of sponsored search.