In June I gave a eulogy for free Google Product Search. In that column, I asked some serious questions about what the new Google Product Listing Ads (PLAs) meant for marketers, and what retailers would need to do to prepare for the change.
Now that time has passed and the craziness of Q4 is over, it’s a good time to really see what initial results look like and what PLAs mean for marketers.
So are marketers that use PLAs spending significant amounts? Yes. For our clients, PLAs already represent up to 15% of their total paid search spend.
Is the PLA spend incremental or does it cannibalize search spend? This spend, for the most part, is added on to traditional search ad spending. The prediction that PLAs would just cannibalize other search ads turns out to be false.
So does this mean Google is just making more money off marketers while providing the same services? While there’s definitely more money to be made on the ads for Google, so far PLA CPCs are lower than traditional paid search, with conversion rates that are comparable. We can chalk this up to a win for efficiency while giving marketers more control over PLA offers.
Has paid PLA adoption slowed? With a Q4 release, the early results are just a taste of what is to come. Many retailers did not have enough time or bandwidth to really examine how best to manage these PLAs or – in some cases – get them launched at all in 2012. Almost all of the retail marketers we work with are integrating a PLA strategy in their 2013 plans.
What is the best type of partner for marketers to lean on for PLA execution? Approaching the new paid ad medium by using a data feed vendor is likely a short-term strategy for retailers that have gone down that path. Given the benefits of hindsight, many marketers are now considering the management of these ads aligned with other search advertising, where they can take advantage of group and campaign structures and optimization technology to get the most efficiency out of their entire portfolio.
What’s next? Of course, nothing stays the same forever. We have already seen Google testing different result layouts and formats, so we should not be surprised to see performance volatility. Thus it’s very important to pay close attention to any changes and shift accordingly. Just because something works (or doesn’t) now, doesn’t mean it will continue to act that way moving forward. This is just another reason to always watch performance and test new things. Yahoo/Bing should also be launching its version of paid PLAs soon.
In the end, as paid product listings become the norm, smart marketers will make this new ad product work for them. Remember – every change is an opportunity to pull ahead of your competitors and improve your results.