Google’s Product Listing Ads are Proving Successful

It’s Time to Take Advantage of Google’s Product Listing Ads and Shopping Campaigns!

Oct. 2012 was when Google’s Product Listing Ads (PLAs) took over the Google Shopping experience. That means it’s been more than a year-and-a-half since we’ve seen this new service in action. To commemorate this milestone, ad management platform provider Marin wanted to detail the nooks and crannies of PLAs, to see how well (if at all) Google’s service performed for retailers.

By dissecting virtually every possible component, Marin’s research has concluded several factors, which can be boiled down to this statement: PLAs are working. Web surfers are using them, regardless of the device they’re on, and it’s time that you, as an online retailer, rethink your PLA strategy.

Retailers and PLAs

Text ads still account for a significant amount of online retailers’ spending; however, the trend is looking toward the world of PLAs. In fact, PLA spending was significantly more in each month of 2013 (including slower months) than in Oct. 2012 (typically seen as the first month of the holiday shopping season).

Retailers dedicated up to 15% of their spending toward PLAs for January through October. But when it came time to compete during the holiday season, that spending increased to 23% of paid search budgets. That suggests that retailers understand how much more of an impact they can make – in a crowded arena like the web during the holidays – with product listing ads.

A Higher CPC – For Good Reason

The PLA marketplace has grown substantially in the past year, and is continuing to grow. As the demand grows, so too does the cost per click. Text ad CPC increased 21% over the course of 2013, but PLA CPC grew 141%.

But there’s good reason for this increase in CPC. Product listing ads are more engaging. The proof is in the pudding. One in five paid shopping clicks in 2013 was a PLA. The overall click-through rate (CTR) of PLAs increased by 6%, compared to a drop of 13% for text ad CTRs.

And as the world goes mobile, so too does the world of online shopping. Smartphone users ran to their devices during last year’s holiday season. Smartphone PLA CTR outperformed the desktop/tablet PLA CTR for October, November, and December of 2013 (Google has combined the data of tablets and desktops with the release of Enhanced Campaigns).

Looking Ahead For 2014 And Beyond

We’re already a few months into 2014, and the trends continue to suggest that PLAs will grow. Marin predicts that retailers will dedicate one-third of their paid search budgets toward PLAs by the end of the 2014 holiday season. And mobile doesn’t appear to want to slow down either. Nearly 40% of all PLA clicks will be by smartphones by the time we ring in the new year. But wait, Google PLAs are being retired!

Google Retiring PLAs for Shopping Campaigns

Google has announced that by late August 2014, all PLA advertisers should upgrade to Shopping campaigns. For the holdouts or people afraid of change, you will have no choice, as your campaigns will automatically upgrade.

What’s This Mean For Your Business?

Certainly one of the areas you must focus on is mobile-friendly experiences. This includes mobile-friendly landing pages and using Google’s extensions (like location and call extensions) wisely to make it easier for your users to make conversions.

While optimizing for the smartphone experience is key, it shouldn’t come at the expense of your desktop and tablet experiences. Each retailer and industry has specific types of consumers who may or may not use a variety of devices to make conversions. Rather than make decisions based on blanket statements, it’s important that you look at the uniqueness of your business and industry. OperationROI can help. We specialize in developing PLA and Shopping Campaign strategies customized for your industry and market. Call us at 1-888-277-5429 or fill out our contact form to learn how we can help you optimize your PLAs.