Google Product Listing Ads (PLAs) have passed a couple of major milestones in recent months, and with good reason: advertisers are enjoying far higher conversion rates and revenues per click in comparison to non-brand text ads, according to a new Digital Marketing Report [download page] from Merkle.
The report, covering client activity in Q2 2017, indicates that in comparison to non-brand text ads, PLAs showed:
- 30% higher conversion rates on desktops;
- 21% higher conversion rates on mobiles; and
- 17% higher revenue-per-click on desktops.
That higher revenue-per-click is despite an 11% lower average order value (AOV) in comparison to non-brand text ads.
With those results, it’s not too surprising that recent reports have indicated that:
- US retailers are now getting the majority of their Google search ad clicks from PLAs; and
- Retailers for the first time last year spent a greater portion of their Google AdWords budgets on shopping ads (53%) than on text ads (47%).
This latest report from Merkle reveals that 53% of retailers’ Google search ad clicks came from PLAs in Q2, up 7 points year-over-year. PLA’s share of non-brand clicks was substantially higher, at 75%.
Spending growth for PLAs was largest on mobile phones (62% year-over-year), though growth slowed from more than 200% in late 2015.
Notably, while advertisers upped their spending on desktop PLAs by 31%, they decreased their PLA expenditures on tablets by 23%.
Looking at US retail sites, Merkle determined that PLA’s median share of non-brand Google paid search clicks was greatest in the consumer electronics category (82%) and lowest in the apparel (52%) category.
In other highlights from its paid search analysis, Merkle notes that:
- Overall spending growth for PLAs was 31%, compared to 16% for text ads and 21% for non-brand text ads;
- Smartphones (48%) and tablets (10%) combined for 58% share of all paid search clicks;
- The majority (52%) of Google search ad clicks came from smartphones;
- The share of mobile paid search clicks produced by iOS devices reached a 2-year high of 65%; and
- Advertisers increased their quarter-over-quarter spending on Amazon Sponsored Products by 43% in Q2, almost double the rate of growth for Google Shopping PLAs (24%).
About the Data: Merkle describes its methodology as follows:
“Figures are derived from samples of Merkle clients who have worked with Merkle for each marketing channel. Where applicable, these samples are restricted to those clients who 1) have maintained active programs with Merkle for at least 19 months, 2) have not significantly changed their strategic objectives or product offerings, and 3) meet a minimum ad-spend threshold. All trended figures presented in this report represent same-site changes over the given time period. Unless otherwise specified, the data points in this report are derived from the North American market region.”