Google knows what your competitors charge. The price competitiveness report in Merchant Center shows exactly how your prices stack up against other merchants selling the same products. For every SKU with enough market data, you get a benchmark price representing what competitors charge, and a clear status: above, at, or below.
Most advertisers check this report once, nod, and forget about it. That's a missed opportunity. Price position directly affects click-through rates, conversion rates, and how much you pay per acquisition. Products priced 20% above benchmark don't just convert worse. They drain budget that could go to competitively priced items.
This guide covers how Google calculates benchmark prices, what the data means for your campaigns, and what to do when your prices don't match the market.
What Is Price Benchmarking?
Price benchmarking compares your product prices to an aggregated benchmark from other merchants. Google surfaces this data through the Merchant Center Reports API's price_competitiveness table, which returns three key fields per product: your price, the benchmark price, and a status indicating whether you're above, at, or below the benchmark.
The data is product-level, not category-level. Each SKU gets its own benchmark based on other merchants selling the same or highly similar item in the same country. A running shoe priced at $120 might have a benchmark of $105, giving it an "above benchmark" status. A different shoe at $89 with a benchmark of $95 would be "below benchmark."
The three status categories are straightforward:
- Below benchmark: Your price is lower than the market average. These products have a pricing advantage in Shopping results
- At benchmark: Your price is roughly in line with competitors. No pricing advantage or disadvantage
- Above benchmark: Your price is higher than the market average. Shoppers see cheaper alternatives alongside your listing
This data also feeds into the competitive intelligence picture alongside auction insights and competitive visibility data. Price benchmarking tells you where you're expensive. The other reports tell you where you're losing share.
How Google Calculates Benchmark Prices
Google aggregates pricing from merchants who sell the same products across the Shopping ecosystem. The benchmark represents a weighted average of offers from other advertisers in the same target country. Google matches products using identifiers like GTIN, MPN, and brand, not just product titles.
Several factors shape the benchmark:
- Country-specific: Benchmarks are calculated per country. A product's benchmark in the US will differ from its benchmark in Germany, even if the same merchants sell in both markets
- Identifier-based matching: Products need GTINs or strong identifier matches. If your feed is missing GTINs, Google may not be able to match your products to competitor offers
- Multiple merchant participation: Google needs enough merchants selling the same product to generate a reliable benchmark. Niche or private label products often lack benchmark data entirely
- Daily updates: Benchmark prices refresh daily as competitors adjust their pricing. Your price position can shift without you changing anything
Benchmark coverage gaps
Expect 30-50% of your catalog to lack benchmark data, depending on how many private label or unique products you sell. New products and items with missing GTINs are the most common gaps. If your product feed has incomplete identifiers, improving feed quality is the first step to getting more benchmark coverage.
What benchmarks don't capture
Benchmark prices reflect the listed product price only. They don't account for shipping costs, promotional pricing that hasn't been applied, loyalty discounts, or bundle values. A competitor showing $89 for a product might charge $12 for shipping, making the real price $101. Google's benchmark only sees the $89.
This means your "above benchmark" products might actually be competitively priced when total cost is considered. Keep that context in mind before making pricing changes based solely on benchmark data.
Reading the Price Competitiveness Report
You can access price competitiveness data in two ways: directly in the Merchant Center interface under Growth > Price competitiveness, or programmatically through the Merchant Center Reports API. The API approach lets you combine pricing data with ad performance metrics, which is what makes the data actually useful.
The report shows each product with benchmark data alongside these columns:
- Your price: The current price in your product feed
- Benchmark price: The aggregated competitor price for the same product
- Price difference: The gap between your price and the benchmark, as a percentage
- Benchmark status: Above, at, or below benchmark
- Country: The market where the benchmark applies
The most useful view is the aggregate distribution: what percentage of your catalog falls into each bucket? A catalog where 60% of products are above benchmark has a systemic pricing problem. One where 15% are above benchmark likely just has a few premium items that justify their price.
Sort the report by price difference to find the biggest gaps first. A product priced 5% above benchmark is a minor issue. One priced 40% above benchmark is either a premium product or a pricing mistake that's burning ad spend.
Price Position and Ad Performance
Price position doesn't just affect whether shoppers buy. It affects whether they click. Google Shopping shows prices directly in the ad unit. When a shopper sees your product at $149 next to three competitors at $109-$119, they skip your listing before they even reach your site.
The performance impact follows a predictable pattern:
- Below benchmark products typically see 15-30% higher CTR compared to above-benchmark items in the same category. The price advantage is visible in the ad itself
- At benchmark products perform on par with category averages. No pricing advantage, but no disadvantage either
- Above benchmark products see declining CTR and conversion rates as the price gap widens. A 5% gap might reduce CTR by 10%. A 25% gap can cut it in half
The conversion rate impact is even steeper than CTR. A shopper who clicks an above-benchmark product already knows it costs more. But once on your site, they often comparison-shop and leave. Conversion rates for products priced 20%+ above benchmark can drop to a third of what below-benchmark products achieve.
This creates a compounding cost problem. Above-benchmark products get fewer clicks (lower CTR), and the clicks they do get convert at lower rates. You end up paying more per acquisition on the products least likely to sell. That's budget that could go toward competitively priced items with healthy ROAS.
The impression share connection
Google's algorithm factors in expected CTR when deciding which ads to show. Products with consistently low CTR (often caused by above-benchmark pricing) lose impression share over time, even if your bids are competitive. Check impression share data alongside pricing to see if this is happening to your products.
Strategic Responses to Pricing Data
The obvious response to above-benchmark pricing is to lower your prices. But that's not always possible or smart. Margins have floors. MAP policies exist. Sometimes your price is correct and the market is wrong. The realistic options depend on your situation.
Adjust prices where margins allow
Start with the products where the price gap is small and your margin can absorb the reduction. A product priced 8% above benchmark with a 40% margin can easily drop to match. Run the numbers on each product: what's the POAS at the current price vs the benchmark price, factoring in the expected CTR and conversion rate improvements?
Improve feed quality instead
When you can't compete on price, compete on feed quality. Products with better titles, high-resolution images, complete attributes, and strong seller ratings earn more clicks even at higher prices. A well-optimized listing at $139 often outperforms a bare-bones listing at $119. See the feed optimization guide for specifics.
Segment campaigns by price position
Create separate campaigns or ad groups for below-benchmark and above-benchmark products. Bid more aggressively on products where you have a pricing advantage, and reduce bids on products where you're overpriced. This prevents above-benchmark products from consuming budget that below-benchmark products would use more efficiently.
Use custom labels to tag products by their benchmark status. Feed management tools can automate this: pull benchmark data from the API, calculate the price gap, and assign a label like "price_below", "price_at", or "price_above". Then build your bidding strategy around those segments.
Highlight value beyond price
Price isn't everything shoppers evaluate. Free shipping, extended warranties, faster delivery, loyalty rewards, and bundle offers all add perceived value. Make sure your product feed and landing pages communicate these advantages. A product priced 15% above benchmark with free 2-day shipping and a 2-year warranty can still win the click.
Monitor competitor pricing trends
Benchmark data shifts daily. Track your benchmark status over time to spot patterns. Some competitors run aggressive promotions during specific weeks. Others gradually reduce prices on aging inventory. Understanding the rhythm helps you time your own pricing moves instead of reacting to every daily fluctuation.
When to Ignore Benchmark Prices
Not every above-benchmark product needs fixing. Some products should be priced above the market, and chasing the benchmark on those items hurts your business.
Premium and luxury brands
Premium brands price above market by design. A shopper looking for a specific luxury brand expects a higher price and is often willing to pay it. Dropping to match a benchmark calculated from lower-end competitors undermines brand positioning without necessarily improving conversions.
Exclusive products and bundles
If you sell product bundles, kits, or exclusive variants, the benchmark may not reflect the actual value. A camera body priced at $1,200 might have a benchmark of $1,050 because the benchmark comes from sellers offering the body alone, while your listing includes a memory card and carrying case. The benchmark comparison is misleading.
Products with high customer lifetime value
Some products serve as entry points to a subscription, service plan, or consumable ecosystem. A water filter system priced above benchmark might be worth the higher CPA because the customer buys replacement filters for years. Evaluate these products on lifetime value, not single-transaction pricing strategy.
Marketplace-only competitors
If your benchmark is driven by marketplace sellers on Amazon or eBay who don't carry the same overhead, matching their prices may not be viable or necessary. Your direct-to-consumer relationship, customer service, and return policy carry value that marketplace sellers don't offer.
The key question for any above-benchmark product: is the price gap the reason for poor performance, or does the product perform well despite the gap? If an above-benchmark product maintains strong CTR and conversion rates, leave it alone. The benchmark is informational, not a mandate.
Frequently Asked Questions
How often does Google update price benchmark data?
Google updates price competitiveness data daily based on current offers from other merchants selling the same or similar products. Benchmark prices can fluctuate as competitors change their pricing, so a product that was "at benchmark" yesterday may shift to "above benchmark" today without any change on your end.
Why do some of my products not have benchmark prices?
Google needs enough merchant data to calculate a reliable benchmark. Products that are unique, newly listed, or sold by very few merchants in your target country may not have benchmark prices. Private label products and custom bundles are common examples. If fewer than a handful of merchants sell the same product, Google typically won't generate a benchmark.
Does being priced above benchmark mean my ads won't show?
No. Your ads will still show if your bids are competitive and your feed quality is good. However, products priced above benchmark tend to receive lower click-through rates because shoppers can see price comparisons directly in Shopping results. Your impressions may stay the same, but clicks and conversions typically drop as the price gap widens.
Can I access price benchmark data through the API?
Yes. The Merchant Center Reports API provides price_competitiveness data programmatically. You can query benchmark prices, your prices, and the country of the benchmark for each product. This is how tools like SKU Analyzer pull and visualize pricing data alongside ad performance metrics.
Should I always try to match or beat the benchmark price?
Not necessarily. Benchmark prices reflect the market average, but your business model may justify higher prices. Premium brands, products with extended warranties, bundles that include accessories, and items with faster shipping all carry value beyond the sticker price. The benchmark tells you where you stand. What you do with that information depends on your competitive strategy and margins.
Conclusion
Price benchmarking gives you something most competitive data doesn't: a direct, product-level comparison of your prices versus the market. Combined with ad performance data, it tells you which pricing gaps are costing you clicks and conversions, and which ones don't matter.
Key takeaways:
- Google's price competitiveness report compares your product prices to aggregated benchmarks from other merchants in the same country. Access it in Merchant Center or via the Reports API
- Above-benchmark products see lower CTR and conversion rates. The wider the gap, the steeper the drop, and this compounds across your campaigns
- Price isn't the only lever. Feed quality, value-added services, and campaign segmentation can offset a pricing disadvantage
- Segment by price position using custom labels. Bid aggressively on below-benchmark products and conservatively on above-benchmark ones
- Premium brands, exclusive bundles, and high-LTV entry products often justify above-market pricing. Don't chase benchmarks blindly
Start by auditing your catalog's benchmark distribution. If more than a third of your products with benchmark data are priced above market, you have a systemic issue worth addressing. For the rest, pair this data with optimization efforts across your feed, bids, and campaign structure to get the most from every ad dollar.