Ever wonder how much Paid Search budget advertisers are devoting to Product Listing Ads (PLAs)? AdGooroo recently decided to find out.
To do so we looked at PLA activity for the top 20 Paid Search advertisers ranked by spend on both PLAs and traditional text ads for the top 60,000 shopping-related keywords on Google AdWords during the second quarter of 2014. (Note: we examined Desktop only; Mobile was not included).
Overall we found that PLAs are having a significant impact on the Paid Search advertising landscape. In fact, on average the top 20 advertisers spent a whopping 63% of their Desktop Paid Search budget on Product Listing Ads, with only 37% devoted to traditional text ads.
Breaking it down further, the split for individual advertisers among the Top 20 varied greatly:
Rakuten.com (the former Buy.com), for instance, concentrated nearly 100% of its Paid Search budget on Product Listing Ads. What’s more, Rakuten’s spending on PLAs alone was high enough to rank it #2 in total spend among all advertisers. On the other end of the spectrum is Amazon, which ranked #3 overall and spent its entire Desktop Paid Search budget on traditional text ads. (Notably, Amazon reportedly does not sponsor PLAs as a policy.)
Other advertisers spending the vast majority of their budget on PLAs include #1 ranked Walmart (71%), Best Buy (79%), Staples (85%), Uline (77%), GlobalIndustrial.com (90%) and The Vitamin Shoppe (98%). In addition, eBay appears to be putting its money where its mouth is regarding its well-publicized 2013 study that found paid search is ineffective; the auction and retail site spent 93% of its budget on PLAs and only 7% on text ads.
Not counting Amazon, there were only four advertisers in the Top 20 who invested less than half of their total budget on PLAs: Home Depot (45%) and rival Lowes (38%), Amazon-owned Zappos (36%) and JCPenney (24%).
It should be noted that all Top 20 advertisers may be sponsoring PLAs and text ads for other keywords not included in the 60,000 terms we examined in this study.
PLAs vs. Text Ads by the Numbers
In an attempt to uncover the effectiveness of Product Listing Ads compared to traditional text ads, we also looked at a variety of key spend and performance statistics for the 20 advertisers on the 60,000 shopping-related keywords examined.
Overall the Top 20 advertisers spent more on Product Listing Ads ($283 million) than traditional text ads ($176 million) during Q2 2014, at an average Cost Per Click of $1.63 for PLAs and $1.07 for text ads.
Although PLAs accounted for just 37% of the 8 billion total impressions garnered during the period, 50% of all clicks were on Product Listing Ads, which had an average Clickthrough Rate of 5.96% compared to a 4.91% CTR for text ads.
Back To School is Back in Session
Gain key insights into Back-to-School advertising trends and strategies across TV, Radio, Print, Internet Display and Online Video, as well as Paid Search and owned Social Media.Read more