A study from Marin Software was recently released which found that Google’s Product Listing Ads (PLAs) are being used by more and more retailers. In May of 2013, there were over 1 billion products being promoted in this program. PLAs had been an affordable way for many companies to promote their products because the cost per click was significantly lower than for traditional text ads. The study reported, however, that the gap has been closing, with the July year over year cost per click for these ads rose 53%. The CPC for text ads rose only 10% during the same period.
The total click through rate on Product Listing Ads has also been steadily rising over the past 18 months with July of 2013 being the highest ever. In fact, the CTR for PLAs have been higher than that of text ads since November of 2012, making them an excellent adverting option for marketers selling a wide range of products. The fact that the CTR is higher, and the CPC is lower will undoubtedly continue to attract marketers, though if the trends continue, the supply and demand will force the price up over the next 12 months.
The report went on to make some recommendations to marketers for the 2013 holiday season, when significantly more money will be spent on these advertisements than during other times of the year. The following recommendations should help marketers to get the best results for their investment:
- Be as Granular as Possible – Market using the product ID or SKU number to make sure that the best product possible is served.
- Optimize Bids on Product-Level Performance – Avoid setting bid prices broadly, which can reduce the overall return on investment dramatically.
- Use Filters & Negative Keywords – Removing low margin or poorly performing products using filters and negative keywords for the PLA campaigns can save significantly, allowing the budget to be focused on more profitable product lines.
- Group Similar Products – By grouping similar products together, customers can better evaluate, and will still likely purchase one of the products displayed
As the holiday season quickly approaches, marketers should already be creating all their text and product listing ad campaigns so they are ready. Even performing some testing at this early stage can help dramatically improve the return on investment when the heavy marketing begins in late October or Early November.
You can see the full report from Marin Software HERE.
