Product Listing Ads Rising Popularity Drives Prices Up

Google’s Product Listing Ads (PLAs) have been widely accepted by online retailers and their shoppers alike, as both their climbing click-through rate (CTR) and cost-per-click (CPC) indicate, according to a new study.

Research based on more than $4 billion in annualised paid search spend has been produced by Marin Software, showing that CTRs reached a record high in July this year, realising 21 percent more clicks than text-based product ads. This high CTR is coupled with a 93 percent year-over-year increase in click share, indicating the broad acceptance of their use by online shoppers.

The report, ‘Google Shopping Ads: Product Listing Ads Deliver for Retailers‘, includes statistics and commentary on the trends uncovered through the examination of the Marin Global Online Advertising Index.

Highlights of the Report

  • Shoppers find PLAs more relevant to their product searches than text ads. Click share of PLAs has increased 93% YoY, while the CTR of PLAs was 21% higher than text-based in July 2013.
  • Advertisers are correspondingly increasing their investment into PLAs, with share of PLA spend versus standard text increasing 59% between October 2012 and July 2013. This figure is expected to continue growing.
  • As a result of higher CTRs and higher investment into PLAs, the CPC of this medium is on the rise. PLAs CPCs have increased 53% YoY, while the CPC of standard text ads increased only 10%. Despite these rising costs, PLA CPCs currently remain lower than that of text ads, therefore providing a much better return on investment.

“The most significant part of these findings is the sheer levels of activity Google is seeing with these Product Listing Ads, with over 1 billion products now being promoted via the platform,” says Roland Irwin, General Manager of Marin Software Australia/New Zealand.

“Since Google first introduced PLAs, first movers to the platform were given an amazing advantage due to CPC levels being so low,” Irwin explains. “Now the cost has increased, but they are still providing a far greater ROI than text-based ads. In understanding this, retailers must also ensure they have softwares and systems in place to maximise their opportunity in this channel.”

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