Google Shopping: Amazon’s effect on the Product Listing Ads (PLAs)
Google Product Search transitioned to Google Shopping almost five years ago, but retailers are still underutilising the platform. However, it may be even more complex to get your products sold through Google’s product listing ads (PLAs), thanks to another retail giant entering the fray.
Google has been cutting down on text ads recently, removing them from the right-hand side of desktop results pages. This change meant Google would only place ads at the top and/or bottom of a page, which also meant retailers had to spend more to ensure they hit the top of the results page in the product listed ad boxes.
These moves meant brands saw the competition for the top three spaces on the search engine results page increased, with cost-per-click prices also rising. 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 this competitiveness, PLAs are clearly effective – with marketers reporting a 43% rise in PLA clicks. During the fourth quarter of 2016, PLA’s were responsible for 48% of retailer’s Google search ad clicks. Clearly, their importance cannot be ignored.
Enter Amazon. The retail giant has been absent from PLAs until December 20, 2016, where it appeared with a vengeance – running strong ads in the home goods and furnishing categories. Previously, Amazon had stuck to AdWords ads and ignored PLA’s, but this new approach indicates the big brand is no longer sitting on the sidelines. Instead, Amazon’s huge buying power may drive up the cost of PLAs.
One reason for Amazon’s entry into the PLA world is mobile. As Mediaworks reported a few months ago, mobile search is now more common than desktop – and on mobile devices there is less ‘real estate’ advertising space on search results. 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 a giant amongst competitors, with 46% of product searches originating via Amazon’s own search function compared to 54% through Google. This PLA move is a clear indication that Amazon is aiming to leverage Google’s audience to push its own offering.
For retailers, this isn’t all bad news – it means there’s more value in exploring the Amazon seller program in more detail, so your products can be promoted via their PLAs.
However, on the whole it could be a disastrous thing for some brands, as marketers will have to spend more to 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.
Want to know more about how this could affect you and your business? Contact us today to see how we can help.