With Google’s transition to a paid shopping model, advertisers responded in Q4 by ramping up their budgets for product listing ads. A Marin Software report says the move paid off – as PLAs surpassed click-through rates of standard text ads.
Marin’s findings by the numbers:
- 600 percent: The amount by which PLA budget investments increased during the fourth quarter of 2012 (from 0.36 percent in October to 2.5 percent in December).
- 210 Percent: The amount by which search click-throughs of PLA ads have increased in the past year (from 2.1 percent in January to 6.6 percent in December). Some retailers allocated up to 30 percent of their total Google spend on PLAs.
- 60 percent: The amount by which the impression share of PLAs jumped in Q4 2012 (3.9 percent in September vs. 6.1 percent in December).
Although conversion figures were unavailable, Matt Lawson, VP of Marketing for Marin Software, noted that a strong click-through rate is indicative of a healthy conversion rate. With higher click-through rates and lower costs (CPCs were 26 percent lower than CPCs of text ads, according to RKG’s Q4 Digital Marketing Report), Marin expects more advertisers to gravitate toward the image-based ads.
“Given click share of PLAs was increasing prior to Q4, we do expect the ad format to remain popular among advertisers throughout the year, particularly retailers,” Lawson told Search Engine Watch. “Ultimately, consumer engagement is behind the growth. Consumers like these ads.”
While the holidays no doubt contributed to the PLA budgeting spike, people don’t stop shopping online once the holidays are over, and Lawson said PLAs offer advertisers a prominent away to showcase their products.
“PLAs offer a richer ad experience – images, product description, price, and promotion,” he said. “These product details resonate very well with shoppers, resulting in highly qualified clicks. As with any popular ad format, Google and advertisers will invest in them. We expect engagement to continue to grow as Google and advertisers optimize for the ads.”
That means advertisers can expect more competition. Lawson offered four tips for advertisers to consider when investing in PLAs:
- Keep Your Merchant Center Feed Fresh: Don’t set it and forget it. To be effective, retailers need to maintain their feed and continuously optimize their product targets. This means deploying granular targets and integrating an automated bidding solution.
- Use a Relevant Image of Good Quality: If someone is searching for a certain make or model of a product, the image that appears in your PLA ad needs to be of that make and model.
- Offer Competitive Pricing: Listing price is a huge factor for consumers. Make sure your price is both accurate and competitive with other vendors.
- Keep Promotions & Product Messaging Consistent: Gain more real estate in Google’s SERPs by running both PLA and text ads.