Name Your Price: The Last Stand of Human-driven Marketing
From Commodities to Competition: Reframing Price as a Strategic Lever in Modern Advertising
Price Starts with Psychology
For decades, businesses have relied on psychology to set prices.
One classic method, the Van Westendorp Price Sensitivity Meter, asks customers four simple questions:
At what price would this feel too cheap to be good?
At what price would this feel like a bargain?
At what price would this start to feel expensive?
At what price would this feel too expensive to consider?
From these answers, companies find the sweet spot where customers feel both value and quality. The lesson is simple: price isn’t just a number - it’s a reflection of willingness to pay.
What emerges from this convergence is a subtle but significant shift: in a landscape where access to media and creative capabilities are no longer scarce, the ability to compete dynamically on price becomes a primary driver of marketing effectiveness.
1. Willingness to Pay Meets Digital Auctions
Today, that same principle plays out in digital advertising. But instead of asking customers directly, brands compete in ad auctions, bidding for attention rather than products.
Platforms like Google and Meta run billions of these auctions every day. Winning doesn’t just depend on how much you’re willing to spend. Relevance, expected results, and efficiency all play a role. The auction itself reveals what attention is worth - and how much you must pay to get it.
2. The Ad Auction as the Allocator of Value
The auction is the operational core of the digital advertising system. Its design, particularly the Generalized Second-Price (GSP) and Vickrey-Clarke-Groves (VCG) mechanisms—ensures that attention is allocated not just based on willingness to pay, but also on relevance and expected performance.
In this environment, advertisers do not compete for guaranteed placements; they compete for probabilistic opportunity. Bidding strategies, audience segmentation, and conversion optimisation have become levers not just of efficiency, but of visibility itself.
3. Why Creative and Media Are No Longer Scarce
In the past, businesses won by having the best creative ideas or the best media slots. Today, those advantages are less decisive:
Ad inventory is abundant and programmatic.
Creative production is cheaper and faster than ever thanks to AI tools.
If creative and media aren’t scarce, what remains scarce and decisive is price.
4. Price as Strategy
In modern marketing, “price” no longer refers only to what you charge for your product. It also means:
The maximum you’re willing (and able) to pay for a click, lead, or sale.
The customer acquisition cost that keeps you profitable.
The agreed guardrails where finance, marketing, and media teams all align.
The problem? Most organisations keep these decisions in silos. Finance models in isolation. Marketing chases dashboards. Media buyers optimise in-platform. Without alignment, the result is wasted spend and un-optimised profit.
5. Implications for Brand and Performance*
None of this negates the enduring value of brand equity or long-term positioning. However, it does suggest a reframing of how brand and performance function together.
Where brand may once have dominated the upper funnel, its role now is often to enable lower-funnel efficiency. Strong brand signals improve click-through rates, increase conversion likelihood, and ultimately reduce auction costs.
Thus, in a system where outcomes are priced and optimised continuously, brand and performance are no longer separate disciplines—they could be viewed instead as components of a single, adaptive pricing strategy.
*much as I dislike this way of describing the role of marketing
6. Conclusion
In a world where creative is abundant and media is commoditised, price is the last strategic lever left in human marketing.
The key is recognising that allowable cost (the finance view of what you can afford) and willingness to pay (the auction view of what the market demands) are not separate concepts — they are two sides of the same coin.
Ad auctions make this relationship visible and actionable. And with regression analysis and sensible assumptions about how channels interact, these dynamics can be modelled across the entire funnel. That shifts marketing from channel-by-channel optimisation to a fully omnichannel, profit-driven approach.
Closing Thoughts:
What seems apparent is that, for many organisations, the layers most able to operate at the intersection of price, psychology and strategy exist in partial isolation. Financial targets are typically set in commercial or finance teams. Strategy is formulated by brand or marketing leadership. Tactical implementation occurs within performance marketing functions, often mediated by agencies or platform specialists. What connects them are dashboards and digital reporting interfaces but not always delivered with a coherent feedback loop nor a shared operational logic.
As a result, the price paid within an ads auction, a number generated in milliseconds by an automated system, is often only loosely governed by the broader strategic or financial intentions of the business. It reflects platform dynamics more than business priorities.
This is precisely where leading advertisers are beginning to differentiate themselves. The brands best positioned to succeed in this auction-based environment are not those with the largest budgets or the most emotive creative assets.
They do the following (do a varying degree):
Deploy high-performing creative consistently, optimised for the attention economy
Respond in real-time to performance signals, adjusting bids, messages, and offers accordingly
Align pricing, bidding, and value propositions with platform economics and with internal performance thresholds.
