By now it’s clear that retailers made record investments in Google product listing ads (PLAs) in Q4 2013, as reports from Covario, RKG andIgnitionOne have each shown. Today, Marin Software released its own findings which reinforce the general consensus that PLA performance this past holiday season will set the trend for 2014. Marin also sees smartphones playing a greater role in PLA performance in 2014.
“As mobile shoppers utilize Google Shopping more in-store and on-the-go, we expect these holiday CTR trends to continue in 2014,” Marin projects in the new The State of Google Shopping report. By December 2014, Marin expects retailers to allocate roughly a third of their PPC budgets to PLAs and that 40 percent of all PLA clicks will come from smartphones.
PLA share of spend among Marin’s retailer set grew relatively slowly in the first three quarters of 2013, rising just 3 points from from 12 percent of spend in January to 15 percent in October. That spend accelerated in the holiday season: PLA share of spend rose to 18 percent in November then hit 23 percent of spend in December. Marin saw some advertisers put as much as 80 percent of their paid search budgets toward PLAs in these months.
In Q4 2013, text ad CPCs rose just 3.9 percent year-over-year while CPCs for product listing ads jumped 44.3 percent year-over-year. And the average cost-per-click for PLAs is also rising faster than it is for text ads. Retailers included in the Marin report saw text ad CPCs rise 21 percent by December compared to January 2013. PLA CPCs increased by 141 percent in that time as more retailers jumped on PLAs for the holidays. These results are in keeping with RKG’s 4th quarter analysis that found CPCs for PLAs outpaced text ads for the first time during the holiday season.
Click-through rates on those PLA ads also jumped, rising 20.5 percent in Q4 year-over-year. In comparison, CTR on text ads bumped up just 4.6 percent. In November and December, click-through rate increases for PLAs were driven by smartphones.
Source: Jan 21, 2014 at 8:30am ET by Ginny Marvin