Commentary

How Are We Doing So Far? The Opportunity In Google PLAs

by Roger Barnette , February 5, 2013

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.

google, search

3 comments about "How Are We Doing So Far? The Opportunity In Google PLAs".

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kevin lee from Didit / eMarketing Association / Giving Forward, February 5, 2013 at 12:30 p.m.
Roger makes a lot of great points. We've seen some retailers allocate even more than 15% of their PPC Google spend to PLAs, in particular those with broad, diverse product mix. It's almost funny that the skills many of us old-timers learned managing and optimizing Inktomi Paid Inclusion feeds into Yahoo are now coming into play.
One more comment I'd make is not to discount the importance of the images in PLA feeds. Swapping an image can improve CTR and therefore the PLA version of quality score. Plus in PLAs the quality score improvement might get you into more SERPS...
Reply

Ryan Gibson from Wheelhouse, February 5, 2013 at 12:40 p.m.

Thanks, Roger. I think your most important point may be that, "the early results are just a taste of what is to come". Because PLAs appear to be largely incremental, retailers need to prioritize their adoption and implementation. Among the benefits you mention, there is still an opportunity to take advantage of CPCs that are more than 25% less than comparable non-brand text ads.

Suzy Sandberg from SuzySandberg.com, February 6, 2013 at 8:49 a.m.

The incrementality level differs if you are a brand or a retailer. Brands are seeing less incrementality because there is now even more competition on the SERP by retail partners. That said, the enhancement of showing PLAs on tablets in mid December helped the incrementality level, for sure. When they move to adding them to smartphones, we should see the ramp up even more. So we definitely see it as a good sign of what's to come. Great article. Thanks.