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Google Product Listing Ads vs. Text Ads

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The first full month of Product Listing Ads being served through the Google AdWords interface is officially complete and what a holiday season it was. Here are the results of our PLA tests and how they stacked up against the common Google text ads.

A Bit of Background

Google Product Ads

In November, Google revealed they were expanding product ads for all of their advertisers, just in time for the holiday season. This was officially rolled out by the end of November, but as with most things coming out of beta, it had its hiccups.

A week into running ads, we were seeing impressions, clicks, and costs -- but not a single conversion in the interface for this type of ad. Within a day, Google got back to us and let us know that it was a known issue. They fixed it and we saw our first Product Listing Ads conversion on Dec 8.

Even though we had traffic, and likely Product Ad conversions for days prior, I decided I wanted a pure month of correctly reporting traffic. Therefore, the results presented below are from Dec. 8, 2010 through Jan. 8, 2011.

About our business in the case study:

  • Size: SMB
  • Type: B2C, e-commerce
  • Offline Presence: Local B&M presence
  • Advertising: AdWords and Merchant Center only
  • Experience: New to online and advertising
  • Competition: Seasonal business, many established competitors

Double Dipping in the SERPs

With Product Listing Ads, AdWords advertisers can show in the search engine results pages (SERPs) with a Product Listing Ad and text ad at the same time. If you're in the Google Merchant Center, and you site has a double listing organically, it's technically possible that you'd be able to control five spots on a results page!

Amazing, right? Once again proving that even when dealing with just one search engine, diversification is key.

How Often Was Each Type of Ad Served?

Impression Share

This was about spot-on to the frequency of display I was expecting. I figured it would be somewhere between 10 and 15 percent, so hooray for my guesstimates!

Not surprisingly, Google still heavily favors text ads. I don't expect that to change too much too soon.

That's about where the accuracy of my guesswork and reality parted ways.

CTR & CPC

CTR and Avg. CPC

I initially thought that the Product Listing Ads would probably have a higher click-through rate (CTR) and possibly even a higher cost per click (CPC) when everything was said and done. I was wrong.

Even though a picture might be worth a thousand words, those thousand might not be formed into a compelling ad. Or perhaps displaying the price didn't work to our benefit in this instance. Future testing will tell.

The CTR was decidedly lower than the persuasive text ads we had running in the account. However, the lower CTR, coupled with the 12 percent impression share, did yield a fair amount of clicks. I was also pleasantly surprised that the each click cost about half the price!

What About the Conversions?

Conversions

I had figured on a good CPA based on the fact that if people clicked on a Product Listing Ad, they would tend to be later in the buying cycle. As it turns out I wasn't let down by the cost per conversion -- only the rate at which they converted.

Suffice to say, with our quick, hit-the-ground-running client, we were thrown head first into shopping season and didn't have the option of doing anything on the site to try to influence the conversion rate. Even so, the differences between the text ads and the Product Ads performance on sales is fairly insignificant.

Conclusion

Product Listing Ads are an interesting addition to the AdWords arsenal for e-commerce marketers. They weren't the home run that I wanted them to be, but they brought in conversions at a similar rate to text ads and at about 40 percent of the cost. That's worth it from my point of view.

If you've been testing Product Listing Ads out this past month and have an experience to share, or if you have any questions, please let us know in the comments below!

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