Product Listing Ads: Growth Insights

ATTENTION ONLINE VENDORS: Product Listing Ads (PLAs) are becoming increasingly competitive. According to one global study, Google Shopping Campaigns have seen click share increase by 210% in the last year.

Although the shift to paid inclusion may have driven some vendors away from participation, many others have seen opportunities in PLAs. For one, the listings are no longer flooded with results from spammy, irrelevant, and outdated feeds. Since vendors are now paying for clicks, there is real incentive to having a well-managed and updated feed. Although Google Shopping listings are no longer free, the playing field is more level.

So what is driving advertisers to shift budgets towards PLAs? Improved ad performance, greater control, and increased competition are all contributing factors.

Improved Ad Performance:

Since PLAs are rich with information to help searchers in the buying process, they generally lead to higher click-through rates (CTR). Moreover, many searchers navigate directly to the Google Shopping section of the search results page and are not distracted by organic and other paid search listings that may have otherwise captured clicks.

If products are priced competitively, CTR is boosted even further. Most importantly, since PLAs automatically provide more relevant and transparent information including image and price, they generally boast higher conversion rates from better clicks.

Greater Control:

The PLA integration into AdWords gives vendors better control over many aspects of their product listings. Much the same as in traditional paid search campaigns, PLA campaigns provide the ability to control bids, budgets, ad scheduling, location targeting, etc. Furthermore, these campaigns have exclusive features such as product Auto-Targeting and Promotion messaging.

Increased Competition:

If there was ever any reluctance of shifting budgets towards PLAs, there is no sign of it now. The lower click-costs and increased CTR and conversion rates enjoyed in these campaigns have not gone unnoticed, and more vendors are getting in. In addition to increasing PLA click share, the increased competition may start to inflate click costs as auctions become more crowded.

The good news: It’s not too late to try out Product Listing Ads. The new paid search format is still in its infancy and there are many changes yet to come. PLAs are still only available in a limited number of countries and are still shifting to paid inclusion for the UK, Germany, and France. Finally, there are many ways to optimize PLAs on different levels. Everything from the feed itself, to bids, auto-targets, and promotional text can be optimized for performance.

In our next segment on Product Listing Ads (PLAs), we’ll cover some optimization techniques and best practices. In the meantime, let us know if you have any questions or further insight into PLAs. We’d love to hear from you.