Top Retail Brands Now Invest More on Product Listing Ads Than Text Ads

Paid Search

Product Listing Ads are a growing trends, and for many brands, essential to get them in the mix when consumers are in the consideration stage of the purchase funnel. With top retail brands increasing the level of investment in PLA's, it represents an important part of any eCommerce marketer's advertising budget.

Product Listing Ads (PLAs) have been increasingly influential in paid search advertising. Marin Software research revealed that advertisers increased spend on PLAs by nearly 300 percent in 2013, and one out of every five paid shopping clicks in 2013 was on a PLA.

Those are powerful statistics and it’s no surprise that PLAs are beginning to make an impact on advertising budgets. A study by AdGooroo shows that on average, the top 20 advertisers spent a whopping 63 percent of their desktop paid search budget on PLAs, with only 37 percent devoted to traditional text ads.

Even more interesting is the variation by which individual retailers budget for PLAs. Rakuten.com spent an incredible 99.9 percent of their advertising budget on PLAs, while on the other end of the scale Amazon spent 100 percent of their desktop paid search budget on traditional text ads and 0 percent on PLAs. (Notably, Amazon reportedly does not sponsor PLAs as a policy.)

Other top retail brands spending a majority of their advertising budget on PLAs included Walmart (71 percent), Best Buy (79 percent), Staples (85 percent), Uline (77 percent), GlobalIndustrial.com (90 percent) and The Vitamin Shoppe (98 percent).

A notable mention must also be made for eBay who, having determined in a 2013 study that paid search is ineffective, have now revised their paid search strategy by spending 93 percent of their budget on PLAs and only 7 percent on text ads.

Advertisers Spending Big on PLAs Are Reaping The Rewards

AdGooroo’s study also showed that the top 20 advertisers spent more on PLAs ($283 million) than traditional text ads ($176 million) during Q2 2014, with the average cost-per-click of $1.63 for PLAs and $1.07 for text ads.

Overall, although PLAs accounted for just 37 percent of the 8 billion total impressions garnered during the Q2 2014, 50 percent of all clicks were on PLAs, which had an average click-through rate (CTR) of 5.96 percent, compared to a 4.91 percent CTR for text ads.

You can read the full AdGooroo report on paid search PLA spends on their website.

This article first appeared on the Linkdex blog.

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