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.

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.

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.