Dynamic Pricing + PPC: A Chat with Chad Rubin from Profasee

In this blog, we explore new insights from two industry experts—Chad Rubin, founder of Profasee, and Tarik Berrada Hmima, CEO of M19. Chad has over 20 years of experience in e-commerce, having previously co-founded Skubana, an inventory management software, and Profasee, which specializes in dynamic pricing for Amazon brands. Tarik brings 14 years of experience in digital advertising, with a deep background in AdWords and Amazon advertising, and co-founded M19, a leading PPC software platform that helps brands optimize their ads on Amazon.

In this conversation, Chad and Tarik dive into the synergy between dynamic pricing and PPC, explaining how combining these two strategies can significantly boost profits for Amazon sellers. From understanding the relationship between price and demand to optimizing ad performance and integrating data-driven pricing decisions, they share valuable insights and real-world examples that demonstrate the power of unifying pricing and PPC efforts.

‍

Why is it important to harmonize dynamic pricing and PPC efforts?

Chad Rubin:
Thanks for having us! The relationship between pricing and PPC is something that’s often overlooked. Pricing touches every part of the business—from your cost structure to how your products are perceived in the market. And PPC, on the other hand, is often treated as a standalone channel. But when you connect the two, magic happens.

At Profasee, we focus on dynamically adjusting prices to optimize for specific outcomes—whether it’s maximizing revenue, profit, or velocity. And we’ve found that when you combine this with PPC, it amplifies the results. It's about using pricing to strategically guide your ad spend and leveraging advertising to help you manage demand around those price changes. The combination boosts profitability by optimizing the entire sales cycle from price point to click-through rate.

‍

Tarik Berrada Hmima:
Exactly. I think one of the biggest insights we've seen is how PPC and pricing can influence each other in real time. Pricing impacts ad spend and conversions, and PPC can influence demand, which then plays into how you set your prices. By understanding how these two elements interact, sellers can optimize their strategies for better outcomes.

‍

How did M19 get involved in pricing, and why did M19 start integrating it into your PPC platform?

Tarik Berrada Hmima:
Our journey into pricing started about two years ago when we were working with a large customer who was experiencing strange fluctuations in their PPC performance. After investigating, we realized that the fluctuations were linked to price changes. When the customer reduced prices, we saw a spike in conversions, which led to better sponsored product rankings on Amazon. This happened because Amazon’s internal algorithm uses price as a factor when estimating conversion rates.

From there, we started focusing on how pricing impacts PPC dynamics. We developed a feature within M19 that tracks price changes alongside other PPC metrics. This allowed us to understand the relationship between price, conversion rate, and ad performance. It’s this data-driven insight that helps sellers improve their PPC strategy while taking pricing into account.

‍

How Profasee’s dynamic pricing affects profitability, especially when combined with PPC?

Chad Rubin:
Sure! When you dynamically adjust prices, you’re essentially controlling the price-to-demand relationship. The simple rule is: as price goes up, demand tends to go down. However, in certain cases, you can use PPC to counteract that decline in demand. So, if you increase the price of a product, you might see a drop in sales, but by driving more targeted traffic through PPC, you can offset that drop and even increase profitability.

‍

Case Study 

Let’s take a garlic press as an example. If you raise the price by 20%, the advertising cost naturally rises as well because your ACoS  increases. But by strategically using PPC, you can ensure that the increase in ad spend leads to higher visibility and sales, which in turn boosts your contribution profit. In this example, even though your ACoS worsens and your ROAS decreases, your overall profit from the product actually increases by 60%.

So, it’s about looking at the bigger picture—your overall contribution profit—not just the individual metrics of ACoS or ROAS.

‍

How does M19 track price changes alongside PPC metrics?

‍Tarik Berrada Hmima:
We created the Product Event Timeline within M19, which allows users to see key events, like price changes, alongside their PPC performance data. This timeline helps visualize how pricing decisions affect ad metrics like impressions, click-through rate, conversion rate, and overall sales. By analyzing these patterns, sellers can correlate price changes with shifts in PPC performance, helping them fine-tune their strategies.

For example, if you notice that a price drop leads to an increase in impressions or a better conversion rate, you can adjust your bids accordingly. Similarly, if you raise the price and notice a drop in conversions, you might want to tweak your ad spend or modify your bidding strategy to balance out the impact of the price increase.

‍

Things should sellers keep in mind when integrating price and PPC?

Chad Rubin:

Sellers need to approach price and PPC as a unified strategy rather than treating them as two separate entities. Pricing should be seen as a lever that you can pull to influence both demand and ad spend. But it’s important to remember that it’s not just about raising prices across the board. You need to analyze your market, your competition, and how your product is positioned in order to find that sweet spot where price increases can boost profits without negatively affecting sales too much.

Additionally, it's crucial to monitor how price changes affect your PPC performance in real-time. Make sure you're not just looking at isolated metrics like ACoS. Pay attention to how your pricing decisions are influencing overall profitability, and be willing to adjust your strategy as needed.

‍

Tarik Berrada Hmima:
The real magic happens when you start using data to make smarter decisions about both pricing and PPC together. By using tools like M19 and Profasee, you can get a holistic view of your business and make adjustments on the fly to maximize both revenue and profit.

‍

Conclusion: The Power of Combined Pricing and PPC

Chad and Tarik believe that integrating dynamic pricing with PPC advertising is a powerful strategy for significantly boosting profitability. This combined approach requires data-driven decision-making and a focus on overall contribution profit, rather than just metrics like ACoS or ROAS.For sellers looking to take their Amazon business to the next level, it’s no longer enough to treat pricing and PPC as separate strategies.

‍