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Google's Product Listing Ads: Adoption, Clicks, Mobile Continue Surge [Study]

jessica-lee
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Google’s Product Listing Ads (PLA) took over the Google Shopping experience in October of 2012. The close of 2013 represented just over a year of the service running in full, and advertising management platform provider Marin sought to uncover its progress in the retail space, including rate of adoption, advertising spend, click-through rate and more; the results showed percentages up in all categories.

PLAs in 2013: The Research

Marin’s research shows retailers increased PLA spend in 2013 by nearly 300 percent. In fact, retailers spent more on PLAs in each month of 2013 than in October of 2012 (the first month of the service as Google Shopping and, Marin said, historically the first month of the holiday shopping season). 

pla-spend-2013-marin

Note: Values in graph have been normalized.

When it came to how much budget PLAs were afforded versus text ads in 2013, Marin’s data showed that from January through October, PLA allocation rose 25 percent to a total of 15 percent of the paid search budget. By the close of the holiday shopping season in December, PLAs afforded 23 percent of the paid search budget. This was up 92 percent since January.

pla-share-of-spend-2013-marin

As the PLA marketplace grew, not surprisingly so did the cost per click (CPC) for PLAs. In 2013, PLA CPC increased 141 percent overall, while text ad CPC increased just 21 percent.

pla-cpc-2013-marin

Note: Values in graph have been normalized.

Google announced it would be lumping desktop and tablet device data together with the release of Enhanced Campaigns in February 2013. Marin data showed smartphone CPC increased in 2013, but was lower than desktop and tablet costs. In December, Marin research showed smartphone CPC lower than desktop and tablet – even during the 2013 holiday shopping season.

pla-cpc-mobile-2013-marin

Note: Values in graph have been normalized.

The higher CPC was for good reason; more people engaged with PLAs in 2013. Marin research shows one in five paid shopping clicks last year was a PLA, increasing the overall click-through rate (CTR) by 6 percent, while text ads CTR dropped 13 percent.  

pla-ctr-2013-marin

Note: Values in graph have been normalized.

Marin data shows smartphone users were particularly drawn to PLAs for shopping. During the 2013 holiday season, smartphone PLA CTR outperformed desktop and tablet PLA CTR.

pla-ctr-mobile-2013-marin

Marin's methodology for the study drew a sample from the Marin Global Online Advertising Index, and analyzed enterprise retailers spending more than $100,000 per month on Google text ads and PLAs. 

Marin said its data "skew toward the performance of larger retailers, and may not reflect performance trends for small retailers. However, the size and diversity of our dataset enables us to provide the most comprehensive analysis on PLA performance."

All monthly key performance indicators were normalized to January 2013 where appropriate, instead of exposing absolute values. Device-level performance was normalized to October 2013 desktop and tablet performance.

PLAs in 2014: How to Prepare

Marin said 2014 will see more growth in PLAs, and predicts by December 2014, retailers will allocate one-third of their entire paid search budget toward PLAs. The percentage of mobile shoppers will continue to grow as well, and Marin predicts that 40 percent of all PLA clicks will occur on smartphones by close of 2014. 

What's next for PLAs? Marin gave tips in its report:

"As consumer engagement and the cost of PLAs continue to increase, advertisers will need to rethink their PLA strategy. Setting revenue maximizing budgets across search and Shopping campaigns will become critical particularly during the holiday seasons. Shifting more attention toward optimizing the mobile experience — mobile-friendly landing pages, integrating Google Merchant Center’s local availability and local storefront features — will be key to maximizing smartphone PLA performance.

"Early this year, Google will roll out Shopping campaigns in the US, with full global availability later in 2014. Shopping campaigns introduce a new way for retail advertisers to manage and report on PLAs, offering additional benefits in the form of flexibility and visibility. These and other changes will force retailers to remain agile and invest in new ad technology. Efficient management, reporting, and optimization of Shopping campaigns will be crucial for remaining competitive and winning the battle for revenue online."

You can download the full Marin report here.


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