• by Jack Loechner , Staff Writer @mp_research, September 9, 2013

According to a new report from Marin Software, Google's Product Listing Ads (PLA) are winning in the paid search results with PLA click-through rates (CTR) remaining higher than standard text ads since November 2012.

In June and July 2013, PLAs had a record 21% higher CTR than text ads, according to Marin’s findings. In July 2013, PLA CTRs had increased 19% year over year, and have increased each month since February. PLA CPCs (cost per click) increased 53% year over year as of July 2013.

The research focused on a representative set of advertisers who leverage Google’s standard text ads and PLAs. All monthly key performance indicators are indexed, instead of exposing absolute values, to more clearly highlight overall trends.

During the 2012 holiday season, from September through December, the share of PLA impressions to standard text ads grew 60%. At the time, the rate of growth appeared exponential. However, the share of PLA impressions has stalled and dipped since; decreasing 2% in June and 13% in July compared to January 2013.

% of Impressions Vs. Text Ads (2013; index)
Jan	Feb	Mar	Apr	May	Jun	Jul
121	121	121	121	122	118	105
Source: Marin Software, August 2013

Over the next three months, says the report, as more retailers enter the PLA landscape and as product-related searches increase heading into the holiday season, the share of PLA impressions to standard text ads will increase dramatically.

Despite the initial stall in the share of impressions, shoppers continue to find PLAs rather than standard text ads to be more relevant to their product searches regardless of seasonality. In fact, PLA click-through rates (CTR) have remained higher than standard text ads since November 2012; they were a record 21% higher in June and July 2013. 

PLA CTR  (2013; index)
Jan	Feb	Mar	Apr	May	Jun	Jul
150	146	147	150	157	161	166
Source: Marin Software, August 2013

More optimized product feeds, coupled with mobile targeting and increased familiarity of PLAs among shoppers, has created a progressively engaging shopping experience, says the report. In July 2013, PLA CTRs increased 19% year-over-year and have increased each month since February. CTRs are expected to continue increasing as mobile shoppers begin embracing this highly engaging ad format heading into the holiday season.

The share of PLA clicks to standard text ads increased 3% from January to July 2013. Year-over-year, the share of clicks increased 93% in July.

% OF CLICKS VS TEXT ADS (2013; index)
Jan	Feb	Mar	Apr	May	Jun	Jul
215	217	220	230	250	249	221
Source: Marin Software, August 2013

In addition to year-over-year increases in click volume, retailers are benefiting from lower cost-per-clicks (CPC) for PLAs compared to standard text ads. This trend has far reaching implications, says the report. PLAs are not only cheaper, but they perform better from a CTR perspective than standard text ads.

In July 2013, PLA CPCs increased 53% year-over-year, while standard text ads increased 10%. In fact, PLA CPCs soared 34% compared to January 2013 to an all-time high in June. Though CPCs dipped in July, potentially as a result of seasonality, the accelerated CPC inflation for PLAs year-over-year can be primarily attributed to the increase in competition as more retailers adopt this highly effective ad format.

PLA CPC (2013; index)
Jan	Feb	Mar	Apr	May	Jun	Jul
131	146	140	152	169	175	159
Source: Marin Software, August 2013

Stronger CTRs and lower CPCs continue pushing retailers to increase their paid search spend budget towards PLAs. Since October 2012, the share of PLA spend to standard text ads increased 59%, with retailers allocating as much spend in June 2013 towards PLAs as they did in November of the 2012 holiday season.  Despite what appears to be a seasonal drop in the share of spend, many retailers were allocating as much as 50% of their paid search budget towards PLAs in July, months ahead of the holiday shopping season. 

% Of Spend Vs. Text Ads (2013; index)
Jan	Feb	Mar	Apr	May	Jun	Jul
232	223	210	216	284	303	266
Source: Marin Software, August 2013

The report concludes by noting that PLAs are experiencing continuous success, and retailers will undoubtedly allocate additional budget towards this richer ad format going forward. For search marketers looking to build on the momentum of PLAs, optimizing the product feed, leveraging a granular campaign structure, and testing promotional text will be the key to long-term success.

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