Today, Marin Software release a new study that finds Google Product Listing Ads (PLAs) continue to see increased adoption among retailers. According to the study, over one billion products were being promoted through PLAs as of May 2013.
PLA impression share, when compared to text ads, has slowed some since its holiday season peak in December 2012. Marin points out that the dip seen in June and July 2013 could be seasonal, but that the transition to enhanced campaigns as well as the new product feed specifications that went into effect in the US on July 15 may have contributed to the drop off.
Still, Marin expects PLA impression share to “increase dramatically” as PLA impressions increase on mobile devices, more merchants add PLA campaigns and particularly as product-related searches increase during the holiday season.
Consumers continue to embrace PLAs. Clicks have shown no sign of slowing and click-through rates (CTR) have remained higher than text ads since November 2012. In June and July 2013, PLA CTRs were 21 percent higher than standard text ads.
PLA share of clicks compared to text ads rose 3 percent from January to July 2013. In July, share of clicks increased by 93 percent year-over-year.
CPCs Are Catching Up As Share of Spend Rises
In addition to better CTR, retailers have been enjoying lower cost-per-click (CPC) for PLAs than text ads. However, in July this year, PLA CPCs rose 53 percent year-over-year. Compare that to a 10 percent year-over-year increase for text ads.
After peaking in December 2012, PLA CPCs have remained consistently higher year-over-year, hitting a new high in June 2013. Marin expects CPC inflation to continue as more merchants enter the PLA marketplace.
Not surprisingly, retailers’ share of PLA spend has also been rising. Since October 2012, PLA share of spend compared to text ads rose 59 percent. In June, retailers allocated as much spend to PLAs as they did back in November 2012 during the holiday season. Marin found many retailers were already allocating up to 50 percent of paid search budgets to PLAs in July. They expect that percentage to rise for the holidays.
Recommendations For Pre-Holiday Optimization
To get the most out of their PLA budgets, Marin recommends several tactics. First, be as granular as possible with product targets — at the product ID or SKU level — to ensure the most relevant product is served and to optimize bids based on product-level performance. This tactic also makes it easier to focus on bidding strategies and feed optimization for top performing products.
Likewise, excluding low margin or otherwise poorly performing products with filters and negative keywords will preserve budget for performing products.
Marin also recommends grouping products together into ad groups of tightly themed sets of product targets — by brand or product category, for example –to set promotional text that is relevant to the entire ad group of products.