Advertisers Increased PLA Budgets By 600% In Q4; Trend Likely To Continue

The Google Shopping gamble paid off – for both Google and e-commerce advertisers who ran product listing ad campaigns last quarter. A  report from Adobe and a study by RKG each highlighted consumer interest and advertiser opportunity in Google product listing ads.

Today, Marin Software released findings showing that, after the transition of Google Shopping to an entirely paid model in October, advertisers increased their share of search budgets directed toward product listing ads by nearly 600%. Those advertisers were rewarded with higher click through rates and lower cost per click than text ads.

Advertisers  allocated more of their budgets to PLAs as consumers increased their engagements with the image ads. In the last year, the share of search clicks from PLAs increased 210%, rising from 2.5% to 6.5%. In the 4th quarter alone, Marin found the impression share of PLAs jumped 60% as holiday shoppers searched for products and gift items.

PLA Trends - Impressions and Clicks vs. Text Ads

Source: Marin Software

“During the fourth quarter of 2012, we saw some retailers allocate as much as 30% of their spend towards PLAs.” said Marin Matt Lawson, vice president of marketing and partnerships at Marin Software, which recently launched a new PLA solution as part of their platform. PLA Trends - Percent of Spend Vs. Text Ads













Source: Marin Software

Marin says it expects to see marketers continue to increase their investment in product listing ads. In addition, more marketers will add PLAs to their paid search mix. Increased adoption and investment in the ad format will likely have an impact on the relatively low CPCs seen last quarter. It will be interesting to watch both click through rate and CPCs trends over the next several months as advertisers capitalize on the rising impression share of PLAs and continue to refine campaign targeting.

Related Topics: Channel: SEM | Google: AdWords | Google: AdWords: Product Listing Ads | Search Marketing: Shopping Search Marketing | SEM Industry: Stats | Stats: General | Stats: Spend Projections | Top News


About The Author: writes about paid online marketing topics including paid search, paid social, display and retargeting. Beyond Search Engine Land, Ginny provides search marketing and demand generation advice for ecommerce companies. She can be found on Twitter as @ginnymarvin.

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  • Jack N Fran Farrell

    What risk did Google take? That 50 years of mathematical-programming and economic theory of auction-algorithms and markets are wrong? By creating a two-sided exchange between potential-buyers and potential-sellers Google set up a mathematical measure of efficiency (the take of the middleman).

  • Danny Sullivan

    The risk was shifting an entirely free service for merchants to be listed in to being all paid. Advertisers could have refused (as did Amazon); the consumer fallout from Google moving to a paid inclusion model it once called evil could have been severe. The reality is most advertisers paid up. Google turned to Amazon affiliates to make up for its loss. Consumers didn’t seem to care about the change, despite Microsoft even running a “Scroogled” campaign.

  • Jeff Williams

    Did advertisers increase spend or just shift it away from comparison shopping sites that would have garnered those clicks in the past?

  • Jubert Sagun

    Very useful, insightful, thanks!

  • Joe Youngblood

    I would like to point out that 4th quarter = Christmas.

  • Joe Youngblood

    Consumers don’t care. Google could be all paid and at this point, at least for a while a ton of websites would pay up. Consumers just want the best / cheapest result that matches their query.

  • Pat Grady

    We’re “rounding” down to get to 600%. :-)

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