Google PLAs Proving Way More Effective Than Text Ads

By: Chris Crum - January 14, 2013

Say what you want about Google’s transition from the free-to-list Google Product Search to the paid inclusion model of Google Shopping, but the product listing ads (PLAs) that Google Shopping is based on are performing quite well.

Have you seen improved performance with PLAs? Let us know in the comments.

A new Kenshoo report about global online retail in 2012, covers search advertising trends around the world. The firm analyzed data of its own clients, which include advertisers and agencies, managing paid search programs for the retail vertical across Australia, China, France, Germany, Japan, the U.S. and the U.K. They tracked impressions, clicks, conversions and revenue for over a year – from November 2011 to December 2012.

The analysis spans all major retail categories including (but not limited to) electronics, books, apparel, appliances, shoes and sporting goods. It also includes over 24 billion paid impressions and clicks on search engines including Google, Yahoo, Bing, AOL and Baidu, delivering over $1.7 billion dollars in revenue. Suffice it to say, it’s a pretty comprehensive data set, and I encourage you to read the report (pdf) in its entirety.

The Google Shopping model has not rolled out to all markets yet, so the Product Listing Ads data is all from advertisers in the U.S. The comparisons of PLAs to text ads come from the same advertisers, but they exclude seasonal, special promotion, and brand campaigns.

According to Kenshoo’s findings, “eye-catching” PLAs draw about one and a half times the clickthrough rate of regular text ads, and convert 23% better, resulting in a 31% higher return on advertising spending (ROAS).

“It is interesting to note that CPC remains low as competition for PLAs is currently less than other ad formats,” the firm says.

“Looking at how PLAs performed in the U.S. during the entire holiday season, we can see that ROAS spikes on Black Friday and Cyber Monday,” Kenshoo adds in the report. “We also see that PLAs maintained a very high ROAS for the first three weeks of December and the format seemed much less prone to the weekly fluctuations that we saw from the overall holiday numbers including paid search text ads.”

Product Listing Ads Stats

The move to Google Shopping has been a controversial one for the company. Competitors have repeatedly spoken out about Google’s paid inclusion model. TheFind CEO and co-founder Siva Kumar recently told WebProNews, “Google’s switch to an all-paid model is likely to confuse many consumers who will no longer see every product for their search, but will instead only see paid placements. It will be interesting to see how Google communicates this change to consumers who have come to trust that search results are a combination of ads and organic results.”

Bing has gone so far as to create a whole campaign called “Scroogled” to disuade users from buying into Google’s new model.

Not all of the criticism has come from competitors though. One CEO even compared Google to a drug dealer over the move.

Even former Googler Vanessa Fox, who created Webmaster Central, told us in an interview, “I’m not super happy about the shift to paid placement in product search. I can see the rationale of why they did it, but doesn’t reflect the stated mission all that well.”

Based on Kenshoo’s report, businesses are still getting quite a bit of value out of the product listing ads.

“The same retailers that thrive in paid search today will have the highest chance of being successful with PLAs,” said Michael Griffin, founder of Adlucent, which exclusively managed Amazon’s paid search until Amazon took it in-house in 2009. “Since the bids a retailer can afford are dependent primarily on a retailer’s ability to convert buyers (conversion rate) and maximize cart value (average order values), the best retailers will continue to dominate. Important to note, we are in a period where competition is low and CPCs are somewhat depressed. Right now, PLA CPCs are about 20% lower than paid search CPCs. Eventually, we expect CPCs to be 15-20% higher than paid search CPCs. Retailers moving quickly are being rewarded with the opportunity to test and gain market share at a lower cost.”

“Retailers in commoditized categories will struggle the most as CPCs increase,” Griffin told us. “Retailers with low conversion rates and low average order value will eventually be pushed out. Additionally, smaller retailers with low IT resources and/or agency support will struggle. Not only will it be harder for them to produce the right feeds, but it will be difficult for them to optimize them in real-time.”

Google made the full transition to the Google Shopping model in the U.S. in October, and announced the following month that it was beginning the gradual rollout in the United Kingdom, Germany, France, Japan, Italy, Spain, Netherlands, Brazil, Australia and Switzerland. Google said users in these countries would start seeing the new results on February 13.

In December, Google said it would be releasing a new set of Google Shopping program policies in January, as it announced that it is offering promotional credit to merchants in Australia, Japan, Brazil, Italy, France, The Netherlands, The UK, Germany, and Switzerland to make the transition to Google Shopping as it rolls out to these countries. We’ve yet to see the new policies so far.

Google recently launched some social features for Google Shopping, including the ability to read reviews from people you know and the ability to share reviews with friends on Google+. The company also added tools for 360-degree product images, shortlists and discounts/promotions displayed on products. More on all of that here.

Have you used Google’s Product Listing Ads? Have you seen a noticeable difference in your CTRs? Conversions? Let us know in the comments.

Chris Crum

About the Author

Chris CrumChris Crum has been a part of the WebProNews team and the iEntry Network of B2B Publications since 2003. Follow Chris on Twitter, on StumbleUpon, on Pinterest and/or on Google: +Chris Crum.

View all posts by Chris Crum
  • Los Angeles marketing company

    I have to say for retail PLA’s sound amazing. For services though, it is probably a different story. Sure there are pictures for services. Sometimes, however, like house cleaning the picture is obscure as to it’s purpose.

  • Rank Watch

    Emergence of PLAs and Remarketing have definitely opened two more channels of marketing for marketers. Its nice too see PLAs getting good number of click thru’s, I think its mainly because of the way the PLAs design their ads to get more users clicking and also on the way they are positioned.

  • Rank Watch

    Emergence of PLAs and Remarketing have definitely opened up two more channels of marketing (via advertising) for the online marketers. Its nice too see PLAs getting good number of click thru’s, I think the main reason why PLAs get good click thru rates’s are because of the way the PLAs are designed and also the way they are positioned on the Google shopping page.

  • Responsive design Cornwall

    I think the 360 degree product images and increased functionality will make it a great success. I wonder how much it will end up costing once full popularity has kicked in!


    well considering the real estate it takes on the front page, it’s no wonder it works, it just got rid of all natural results. people don’t even know they are clicking on ads.

    • Scroogled for Sure

      You will soon see that Germany, France and UK quickly stop the Google Internet Tax/Toll scam, for sure paid product inclusion links will not cost the same and they will not the same tricks.

  • Alan1

    don’t be scroogled by blackhat google

  • Alec

    “but doesn’t reflect the stated mission all that well.”

    you mean there are still people who think that mission statements were meant to be believed ?

  • Scroogled for Sure

    As usual, google is the only service which does not tell you which ads are being clicked, like amazon, so you can quickly identify and stop out of stocks.

    If you choose to stop the service at certain hours or days, no way, google wants you to keep spending money 24/7.

    Comparison shopping from competitors eats up 50 to 60% of your budget.

    The people who decides what products are so “amazing” that they suspend products of a certain size or flavor, but not the others sizes of flavors of the very same model, they give you no reason at all.

    Support is terrible, copy paste replies is all you get, totally irrelevant to your questions and usually days late.

    Add these issues and you will see that PLAs are the Lite version of being Scroogled big time, for now.

    • Mitch

      Have you looked at the Paid Search and/or the Comparison Shopping Engines technology here at ChannelAdvisor. Please feel free to contact me for greater details re your issues and I’d be happy to walk you through a demo of our solution to show you how we address your concerns and issues re the problems you are currently experiencing based on your feedback to the Google PLA article.

  • Ex Google user

    What peeves me more than anything else is how USA mega sites (google/windows/amazon/yahoo/paypal and such)focus on a) collecting personal data and b) auto-tracking systems and c) moving matters forward to ever monopolise more revenue.
    Personally I prefer multiple smaller operators as they create price and service competition and yet Google prefers to create a ‘pay for everything’ monopoly. Searching for anything will eventually be a cost to the supplier and/or consumer, which is akin to paying to window-shop. I’m moving away from Google on every level. Not good for the future. It’s time we had an open source search engine, so come on Firefox and friends, let’s kill this vampire.

  • Audie Rhodes

    I firmly believe that anyone dumb enough to spend money on advertising allowing a search engine to make the choice of placement needs to return to school for a refresher course! I have to search topics that I have no personal interest in but suffer through an onslaught of advertising about, or more often then not, somewhat similar to the topic I searched.

    I sometimes think that I am back in the ’80’s using 28K dialup because of the bulk of ads being forced on a page slowing down the search process.

    But the most iritating is NetFlix with that damn red pop up ad covering content on a page. I would never be enticed to purchase anything that feels they must resort to this type of advertising. And don’t give me the crap that advertising keeps my internet costs down because it has nothing to do with my service. It’s the AOL mentality of these search engine providers that will place them eventually in the company of AOL!

    Advertisers need to return to advertising that truly targets their market instead of using the internet shot gun approach hoping that they will pique the interest of someone that is looking media totally unrelated to their product or service!

  • Mike

    I think the PLA’s are making the text link ads less effective.

  • Marcie

    It was nice for the smaller companies, when Google offered the free merchant shopping listings, but now I have found a new way and it is very nice so far “The Find” and it is an awsome platform for shoppers and its free to merchants, I think it will surpass Googles merchant program. I have noticed when you search now there is hardly any selection in google shopping and they are the companys that were already paying hmmmmm dosent make sense to me to offer this supposed great shopping platform to shops that were already paying. I think someone should offer great low plans for the smaller companies in order to keep them from leaving its a “win win”!

  • Peter Van Zelst

    I think in their place PLA’s can be highly effective, however Google is currently serving PLA’s that are not entirely relevant to the search term, so a lot of negative matching needs to be done, often this is done in retrospect so the costs of PLA can be quite high initially. I don’t think you can say they are more or less effective than text ads, it really relates to the search intent.