Google shopping: Amazon’s effect on the product listing add (PLAS)

Over five years ago, Google Product Search transitioned to Google Shopping. However, is there a reason why retailers still seem to be underutilising the platform? As Mediaworks explains, it may be more complex to get your products sold through Google’s product listing ads (PLAs), thanks to another retail giant entering the fray.

Google has cut down on text ads. Removing the ads from down the right-hand side of the desktop page meant that the only opportunities left for paid ads were at the top or bottom of the page. With less ad places available, retailers have to spend more money to make sure they have one of these prime advertising spaces.

As a result, cost-per-click prices increased at the same rate as brand competition. 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 its prices and competitiveness, PLAs are still clearly an effective way to get your brand on the top page. Reports suggest that there has been a 43% rise in PLA clicks. During the fourth quarter of 2016, PLAs were responsible for 48% of retailer’s Google search ad clicks. Clearly, their importance cannot be ignored.

Say hello to Amazon – the big retail giant that hasn’t been on the PLA scene until late December 2016, when it appeared with vengeance. Amazon ran strong adds in categories like home goods and furnishings. Previously, Amazon had stuck to AdWords ads and ignored PLAs, but this new approach indicates the big brand is no longer sitting on the side-lines. Instead, Amazon’s huge buying power may drive up the cost of PLAs.

With mobile search on the rise, becoming more popular than desktop search, Amazon took the plunge to enter the PLA world to ensure they were a part of the little ‘real estate’ advertising space. Mobile PLAs generate a higher share of ad clicks on mobile over desktop – which explains why Amazon has also been aggressively targeting 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 giant amongst its competitors, with 46% of product searches originating via Amazon’s own search function compared to 54% through Google. It’s aim to leverage Google’s audience in order to push its own offering is a clear reason for their move towards PLAs.

For most retailers, it isn’t all bad news. Sellers can promote their own products through Amazon PLAs.

However, on the whole it could be troublesome for some brands, as they will have to invest more money into PLAs so that they can maintain their current impression share. 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.

 

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