Product Listing Ads in Major Investment from Brands

Google's Product Listing Ads (PLAs) are taking the digital ad world by storm and many big brands are dedicating increasing larger portions of their budget to the format. How much is being spent on PLAs today?

AdGooroo recently examined the PLA activity of the top 20 paid search advertisers (ranked by spend on PLA and traditional text ads) for the top 60,000 "shopping-related" keywords on AdWords during Q2 2014 and found that PLAs are having a significant impact. On average, the top 20 advertisers spend 64 percent of their desktop paid search budget on PLAs with 37 percent devoted to traditional text ads.

That being said, however, the variation among the Top 20 actually varied dramatically. For example, Rakuten spent nearly 100 percent of its budget on PLAs, while brands such as JCPenny (24 percent), HomeDepot (45 percent), and Macy's (53 percent) spent far less.

AdGooroo also explored the effectiveness of PLAs compared to their more traditional counterparts, examining of variety of key spend and performance statistics. Overall the Top 20 advertisers spent more on Product Listing Ads ($283 million) than traditional text ads ($176 million) during Q2 2014, at an average Cost Per Click of $1.63 for PLAs and $1.07 for text ads.

Also worthy of note was that although PLAs accounted for just 37 percent of the 8 billion total impressions during the period, 50 percent of all clicks were on PLAs with an average CTR of 5.96 percent compared to 4.91 percent for text ads.