Just recently we reported that retailers last year for the first time spent more on Google shopping ads than on text ads. Now, data from Merkle [download page] indicates that in the first quarter of this year, product listing ads (PLAs) crossed the majority threshold of Google search ad clicks for US retailers, climbing to 52% of all clicks. That’s up from 43% in the year-earlier period and 35% share the year before that, representing a steady if not slightly uneven rise.
PLA spending was up by 32% year-over-year in Q1, per the study, after growing by 30% in Q4. That represents almost 3 times faster growth than text ads, which saw expenditure growth of 12%. The analysts note that “PLA growth continued to benefit from the expansion of PLAs on image search in May 2016, as well as from the ongoing shift in traffic to mobile devices, where PLAs enjoy a relatively high share of search ad clicks.” Indeed, the above-mentioned study on Google shopping ads demonstrates that retailers are getting much more mileage out of smartphones in terms of conversion rates and return on ad spend.
Retailers certainly seem to be shifting towards smartphones: in Q1, US retailers spent 53% more on smartphone PLAs, with a 51% rise in clicks and a 1% increase in CPC. While spending on desktop PLAs was also solid (up 35%, with clicks up 30% and CPCs up 4%), tablet spend declined by 16%.
In other PLA-related findings from Merkle’s report:
- Google PLA click volume surged by 39% year-over-year in Q1, more than 4 times the growth rate for text ad clicks (+9%), while PLA CPCs were down by 5%;
- As for CPCs, Google PLA costs-per-click were 13% lower than non-brand text ads on a median basis, though they were higher when looking at desktops only; and
- PLA’s share of non-brand Google paid search clicks grew to 75% in the first quarter, rising across retail verticals.
About the Data: 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 the report represent same-site changes over the given time period.