PLAs are Here to Stay: A Few Tips on How to Take Advantage

online-shopping-mouse-bagWhen Google announced last year that it was switching its Product Listing Ads from a free to a paid model, a mild panic set in amongst many marketers.

Questions rattled around: Why should I pay for what used to be free? How will I compete in this environment? Will I be forced to cut back on my SEM spend to account for this? Why, oh why, would they do this heading into Q4? And so on.

Now that the dust has settled from the transition and from the Q4 spike, many of those questions have been answered. And the answers, for the most part, are very encouraging. So how do you take advantage of this?

PLAs: Results by the Numbers

My company has seen PLAs account for between 10 and 15 percent of total paid search spend since the change went into effect. This is significant, not only because of the increase but because this is largely incremental spend.

In other words, marketers weren’t taking away from their SEM budgets to support PLA’s. That’s obviously good news for Google (and for Yahoo!/Bing, who has announced plans to roll out a similar model later this year).

But there’s upside too for us as marketers, as CPCs are lower than traditional paid search while conversion rates are about the same. So while we may be “forced” to spend more, we can do it more efficiently.

Be Careful

The paid PLA model is still somewhat in its infancy, and as we all know, Google likes to tinker and tweak. So while formats and styles continue to evolve, expect some volatility.

The good news for most PLA marketers is Q1 isn’t exactly the busy season, but it’s still important to keep on top of changes and performance. Keep a close eye on the blogs and a close relationship with your engine rep.

Most importantly, monitor performance very carefully. What’s working today still has a possibility of costing you tomorrow.

Data Feed or Biddable Media? 

Another important question that many marketers asked was whether to treat PLAs more like a data feed or biddable media. It’s a combination of the two.

Most folks have different solutions for each, so how to reconcile? As the old "Saturday Night Live" skit goes (OK, maybe I’m dating myself here) “New Shimmer is a floor wax and a dessert topping.”

Given the timing, many were forced to stick with what they had in place. They either couldn’t change dance partners or were reluctant to do so heading into the holiday shopping season. Now that we can breathe, it’s important to look at this more closely.

Can your feed partner effectively manage biddable media better than your optimization system or partner can manage feeds? It’s probably not a blanket answer for everyone, but many retailers are finding performance didn’t meet expectations if they didn’t treat PLAs as biddable media.

Simply linking feeds to media is great, but the nuance of structuring your groups and bidding against those assets is the secret to success. And that piece is much more like SEM than feed management.

If you didn’t see an opportunity to spend moderately more with lower CPCs and similar conversion rates, you may fall into this bucket.

Summary

More change is on the way. New formats, different ad styles and, as mentioned, competition from Yahoo!/Bing.

Q1 is a great time to look at your options more closely, identify what’s working and what isn’t and plan ahead for the rest of the year. As we all know when January rolls around, Q4 is never far away.

About the author

Dave Ragals serves as Senior Vice President of Client Services for IgnitionOne, where he oversees the company's client services operations and is co-author of “The Integrated Marketing Playbook.” Mr. Ragals has more than 13 years of online experience.

He began his online career with CNN, where he served as V.P., News Features at CNN Interactive, managing the creation of highly-customized content as well as several large business relationships with advertisers and partners. In addition, he developed the paid search marketing strategy for the American Cancer Society, where he was in charge of Web Marketing. Mr. Ragals graduated from Northwestern University's Medill School of Journalism, where he earned a Bachelor of Science degree.