Almost five years ago, Google Product Search transitioned into Google Shopping. Although widely underutilised, one retail giant has entered the game, shaking things up — could it now be more difficult to sell your products through Google’s Product Listing Ads (PLAs)? Mediaworks explains.
With mobile search on the rise, Google has cut down on its advertising space, removing the right-hand column of ads from desktop results. Now that there is less advertising space available to retailers, competing brands will need to spend more to ensure that they win one of the top three slots on the page. As the competition for these spaces rises, so does the cost-per-click. Throughout 2016, marketing firm Merkle reported that marketers boosted PLA spending by 30% EVERY quarter, while normal text ad spending never grew more than 15%.
Despite increased competition, PLAs are still clearly effective – in fact, it has been reported that there has been a 43% rise in PLA clicks. The final quarter of 2016 saw PLAs accounting for 48% of retailer’s Google search ad clicks. Clearly, their importance cannot be ignored.
Say hello to Amazon – the retail giant that was absent from PLAs until late December 2016. They have since appeared with vengeance, running strong ads in home goods and furnishing categories. It seems that despite its absence, the retail giant has decided to move away from the side-lines — a decision that could impact the majority of other retailers, causing the cost of PLAs to rise.
Mobile search volumes were a big influence as to why Amazon moved into the PLA world. Mobile search volumes have now overtaken desktop. And with mobile display having less ‘real estate’ advertising space, but driving more ad clicks, it explains why the price of PLAs is rising, and why Amazon has aggressively targeted phone PLAs (its impression share for those is twice as high as it is for desktop PLAs).
What does this mean for the rest of us?
Amazon is a giant amongst competitors, with 46% of product searches originating via Amazon’s own search function compared to 54% through Google. The retail company’s move into the PLA world is a clear indication of its aim to leverage Google’s audience by pushing its own offering.
For some retailers, they can benefit through Amazon’s sell program, which means your products can be promoted as part of the giant’s PLAs.
However, for the rest of us, it could be difficult. As prices rise, retailers could have to spend more on the PLAs in order to maintain their current impression shares. Depending on how aggressive Amazon becomes and what sectors they target, retailers will need to adjust their strategies to compete with one of the world’s largest retailers.
