One in five shoppers clicked on a link in a product listing ad during the holidays in 2013, whereas clicks on paid-search text ads without the image fell 13%. From January through December, click-through rates for PLAs rose 6%, while CTRs for text ads fell 13%. The research suggests that images seal the deal.
The findings from Marin Software, released Wednesday, analyze the transition from paid search to PLAs during the 2013 holiday season. It takes year-over-year trends across ad formats into consideration, and compares key performance indicators (KPI) by device type. The findings also provide direction on future PLA performance based on performance, seasonality trends, and forecast models. The Marin Global Online Advertising Index analyzes the amount that enterprise retailers spend -- more than $100,000 per month -- on Google text ads and PLAs.
Expect 2014 To Change Search Marketing
Marin predicts that by December 2014, retailers will allocate one-third of their entire paid-search budget to PLAs, and 40% of all PLA clicks will occur on smartphones. This will create a new ecommerce shopping experience for the forthcoming holiday season. Google recently rolled out Shopping campaigns to introduce a new way for retail advertisers to manage and report on PLAs, which will fuel the increase.
The forecast relies on data from the previous year. Retail advertisers spent nearly 300% more on PLAs in 2013, but that's basically because Google redesigned the service, making marketers pay for the ads and take responsibility for the copy and content. By the time December rolled in, incremental increases slowed. Retailers only spent 67% more during the last month in the year compared with a year ago.
Marketers Shift Dollars To PLAs
Allocations of paid-search ad dollars for PLAs rose 23% by December, up 92% compared with January. Although the share of spend varied across individual retailers, some advertisers allocated as much as 80% of their paid-search budget toward PLAs during the holidays -- up from the 30% during the 2012 holiday season.
As other search agencies and platform companies continue to report, the increased in competition for bids continue to fuel unstable costs per click. In this case, Marin points to a 35% uptick for PLAs and 14% increase for paid-search text ads during the first half of 2013 among its clients. By the end of the year, PLA CPCs rose 141%; while text ad CPCs increased 21%.
Mobile PLAs Cost
PLAs that are delivered on smartphones not only cost marketers less, but more consumers seemed willing to click through to
the retailer's site. In fact, consumers clicked PLA links on smartphones 33% more often compared with PLAs on desktops and tablets during October. CTRs for PLAs running on smartphones outperformed desktops and tablets during the 2013 holiday season.
Desktop and tablet CPC for PLAs rose 84% from October through December 2013. Smartphone CPCs also rose during the same time period, but came in 20% less in October compared with desktop and tablet CPCs.