Retailers shift their ad spending from TV, radio and print ads to digital ads.
The top paid search advertisers spend 63% of their budgets on Google’s Product Listings Ads, which generated a higher click-through rate than text ads.
When it comes to paid search advertising, Google’s Product Listing Ads—which feature product images and prices prominently in the central area of a Google search results page—now account for a bigger part of the budgets of big advertisers than traditional text-based advertising, according to a report from paid search firm AdGooroo.
The firm analyzed the spending from the top 20 spenders on both PLAs and traditional text ads for the top 60,000 shopping-related keywords on Google AdWords during the second quarter of 2014. The analysis was for desktop only; mobile advertising was not included. Among those top 20, 63% of their total budgets were spent on PLAs and just 37% on text-based search advertising.
But the spending split varied from retailer to retailer. On the PLA-heavy end of the spectrum, Rakuten.com Shopping, No. 46 on the Internet Retailer Top 500 Guide, spends 99.9% of its search spending budget on PLAs. On the other end of the spectrum, Amazon.com Inc., No. 1 in the Top 500 Guide, spends 100% of its search advertising budget on text-based ads. As a policy, Amazon does not purchase PLAs. Rakuten was No. 2 on AdGooroo’s total spending ranking; Amazon was No. 3.
Other advertisers spending the majority of their budget on PLAs include Walmart.com. Walmart.com spends 71% of its search advertising budget on PLAs and tops AdGooroo’s ranking of search advertising spenders. The mass merchant is No. 4 on the Top 500 Guide. Others spending mostly on PLAs include Best Buy Co. Inc. (71%), Staples Inc (85%), Uline (77%), GlobalIndustrial.com (90%), eBay (93%) and VitaminShoppe.com (98%). Best Buy is No. 15 in the Top 500 Guide, Staples is No. 3, and the Vitamin Shoppe is No. 207.
Other than Amazon, only four advertisers in the top 20 invested less than half of their total budget on PLAs: Home Depot Inc. (45%), Lowe’s Cos. Inc. (38%), Amazon-owned Zappos (36%) and J.C. Penney Co. Inc. (24%). Home Depot is No. 16 on the Top 500, Lowe’s is No. 16, and J.C. Penney is No. 37.
PLAs had an average cost per click of $1.63, while text ads cost $1.07 on . Although PLAs accounted for just 37% of the 8 billion total impressions during the quarter, 50% of all clicks were on PLAs, which had an average click-through rate of 5.96% compared to 4.91% for text ads.