Google Product Listing Ads Show their Worth for Retailers

As of May 2013, over one billion products were being promoted globally on Google Shopping, and Product Listing Ads have increasingly gotten even more valuable for retailers since the company’s pay to play model went global in June 2012.

Cost Per Clicks Rising

Goolge’s PLAs, those ads displayed on the right side of a search results page, are more visual and more engaging than paid text results that show up directly above the organic search results. During the holiday season in 2012, the share of PLA impressions to text ads grew 60%, a Marin Software report has found. Furthermore, PLA cost per clicks rose to an all time high in June 2013.

Since January 2013, that growth has leveled off, but other indicators also show a trend that PLAs in fact are performing quite well for large ad buyers, at least. Marin Software looked at marketers that spend over US$ 100,000 per month on paid search, and across several metrics, the trend of PLA performance appears to be solidly in favor of the tool.

While PLA click through rates, prices and percentage of ad spend versus text ads all show upward growth, some of the flattening of that growth could simply be a seasonal lull, the report found. Additionally, Google made two notable adjustments to its online ads this summer. Most notably, enhanced campaigns fully rolled out in July, and back in May, product feed specifications were also updated.

PLA click through rates, percentage of clicks versus text ads, and percentage of spend versus text ads are all up since summer 2012. As Google rolls out PLAs to mobile devices with enhanced campaigns, all of these trends will continue, the report found.

Google Product Listing Ads Show their Worth for Retailers
PLA CPC hit an all time high in June 2013 as a result of increased competition for the lucrative ads.

PLA Recommendations

Because all indications are that Google PLAs are doing well for retailers, the report has four recommendations on how best to utilize them. They are: choose granular product targets, group products together for promotional text and differentiation, prioritize top performing products, and exclude poor performing ones.

Despite the rosy outlook for PLAs and Google ads in general, there has been some grumbling from regulators on just how effective the ads really are. The FTC, in June, made it clear to online search engines that ads needed to be clearly separated from organic search results. Many people simply cannont tell the difference between search results and paid ads because they look so similar.

While the PLAs are much differenet from the even more confusing text ads, it’s no doubt some people still don’t realize they are actually ads. As Goolge gets even more aggressive with its rollout of PLAs to mobile devices, this side story bears close watching as well.