Walmart Leads Industry in Product Listing Ads

From Gregg Hamilton, SVP of Research & Analytics and Business Development at AdGooroo.

Since their introduction by Google in late 2010, interest in and use of Product Listing Ads (PLAs) has been steadily growing. Because Google does not publish reporting that would allow advertisers to monitor their average ad position or total PLA impressions gained, the industry has been struggling to grasp the effectiveness and impact of PLAs on individual advertisers, retail categories and paid search as a whole. To fill this gap, AdGooroo began collecting and analyzing PLA data and producing PLA results estimates in March. Recently, we conducted a study of PLAs displayed on U.S. AdWords from March through May of 2013 and uncovered a number of interesting findings.

The Top PLA Advertisers

We were not surprised to find that the vast majority of Top 20 PLA Advertisers, based on ad impressions, are mass merchants that sell a wide variety of products. Of these, Walmart far surpassed all other advertisers during the period, sponsoring 408 million impressions from 262,558 unique ads promoting 129,381 different products. See Figures 1 and 2 below. (Interestingly, AdWords will not display multiple text ads from a single advertiser on one SERP, but it will display multiple PLAs from one advertiser. As shown in Figure 2, a search on Goodyear tires yielded three PLAs from Walmart for tires at different price points, which may help explain why Walmart is so far ahead of the competition in terms of measured PLA impressions.)

The next closest PLA competitor was eBay with 187 million impressions spread across 659,333 unique ads on behalf of a whopping 479,855 different products, as befitting its business model. In stark contrast to these retail mass merchants, the Apple Store rounded out the list of Top 20 PLA Advertisers with 31 million impressions generated from 1,803 different ads featuring only 822 distinct products.

While most of the top PLA advertisers are household name brands, the Top 20 also includes a handful of lesser known retailers who appear to be capitalizing on the format ahead of other search engine marketers. These include bhphotovideo.com, a New York-based photo-video retailer geared toward professionals; soap.com, a health & beauty supplier run by Amazon-owned Quidsi; rakuten.com, the former buy.com; and globalindustrial.com, an industrial product supplier and subsidiary of Systemax Inc. whose sister companies include Tiger Direct and Comp USA.

The list is also notable for who is absent. Amazon.com, for instance, is by far the leading Paid Search advertiser, generating 1.5 billion paid search text ad impressions during the three-month period. Yet the e-tail giant ranks only 75th on the Top PLA Advertisers list, with 9 million impressions, suggesting that it remains more focused on the traditional PPC text ad format rather than devoting time and attention to the new PLA format.

PLA blog figure 1

Figure 1

 * defined as displaying a unique product name, price, image, URL or ad copy

 

PLA figure 1

 Figure 2

PLAs for Goodyear Tires, with Walmart appearing in 3 of 7 ads displayed

PLAs vs. PPC Text Ads

AdGooroo estimates more than 4 billion PLAs were displayed on U.S. AdWords from March to May 2013, or 5.9% of the total number of AdWords PPC ad impressions (71.7 billion PLAs + text ads) in that period.
In Figure 3, we compare the number of PLA impressions during the period against the number of PPC text ad impressions for each of the Top 20 PLA Advertisers. The majority of this group is still heavily committed to the traditional text ad format, gaining an overall average of more than two times as many text ad impressions as PLA impressions.

Yet, as highlighted in Figure 3’s yellow rows, eight of the Top 20 advertisers actually had more PLA impressions than text ad impressions during the period. Most of these PLA devotees are smaller, relative newcomers like Etsy and soap.com, suggesting that PLAs may be a viable alternative to text ads for smaller players to gain visibility and clicks. At the same time, two large, traditional retail brands, Staples and Toys R Us, also managed to display more PLA than traditional PPC text ads.

PLA blog figure 3

 Figure 3

PLAs by Category

In terms of total impressions, the Mass Retailers category (which includes Wal-Mart, Target, etc.) generated far more PLA impressions than any other category during the period—around 1.22 billion, or 17% of the total PPC ad impressions served by that category. The next closest category was Consumer Electronics with around 400 million impressions. See Figure 4 below.

PLA blog figure 4.1
Figure 4
However, as a percentage of total ad impressions (PLA plus PPC text ad), the category with the highest proportion of impressions in the PLA format was Auctions & Classifieds with 33.8% (see Figure 5). More than 25% of the impressions in the Consumer Electronics and Health & Pharmacy categories were generated by PLAs, while Mass Retailers, Sporting Goods and Children’s Goods all came in at around 17%. On the lower end of this scale were CPG, with PLAs representing only 0.2% of all ad impressions, and Coupon & Deal Sites (0.65%), as well as some categories where one would assume there would be higher adoption of PLAs due to those ads’ visual appeal to consumers, such as Apparel & Fashion (9.4%) Jewelry (9.3%), and Shoes (10.4%).

PLA figure 5
Figure 5

PLA Adoption by Market

Our research finds widely varying adoption of the PLA format by geographic market, with the highest rate of usage in the Netherlands (4.3% of the active SEM domains in that market sponsoring at least one PLA ad from March to May of this year), followed by Germany (3.5%) and the Czech Republic (3.3%). The U.S. market ranked tenth among the markets studied with only 1.5% of active AdWords advertisers ‘attached’ to at least one PLA during the period (see Figure 6), which is precisely in line with the global average of 1.5% of active AdWords advertisers across the 56 markets in which we found PLAs on Google SERPs. However, because the U.S. SEM market is so dense with advertisers, it featured the largest number of active PLA sponsors (1.51 million) or 46.5% of the global total of 3.25 million active domains on AdWords in the period.

In Figure 6 below, the markets are arranged in descending order of PLA activity (percentage of active SEMs) during the period.

PLA Figure 6
Figure 6

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