While Amazon.com Inc. is still new to Google’s Product Listing Ads, the retail giant is making its presence felt, according to search marketing firm Merkle RKG’s “Merkle Digital Marketing Report Q2 2017.”
The retail giant, No. 1 in the Internet Retailer 2017 Top 500, only late last year began testing PLAs, which are Google’s visually-oriented ads that present product images, prices and business names to users searching on Google, and it appears to be rapidly increasing its spend on the ad format.
Between late-April and mid-May, Amazon’s share of Google PLAs within the home goods category jumped 15%, according to AdWords Auction Insights data. Amazon’s PLA efforts are focused on key categories, Merkle says, as its positioning in other categories is more modest and, in some cases, completely absent.
Amazon’s push into PLAs comes as the ad format continues to gain influence. PLAs accounted for 53% of Google search ad clicks among U.S. advertisers, up from 46% a year earlier.
PLAs produced a 30% higher conversion rate than non-brand text ads during the quarter on desktop and 21% on mobile. The revenue per click for PLAs was 17% higher than non-brand text ads during the quarter on desktop. However, the average order value was 11% less.
Those results help explain why retailers are boosting their PLA spending. Retailers’ smartphone PLA spending rose 62% during the quarter, desktop spending jumped 31% and tablet spending fell 23%, according to the study.
Google’s Expanded Text Ads, which provide retailers with more room to write copy, also comprise a larger share of Google text ad impressions even though Merkle finds the ads have failed to produce consistently higher click-through rates than the search giant’s legacy format. For instance, Expanded Text Ads accounted for 74% of Google text ad impressions in June, up two percentage points from May. The increase largely reflects the fact that early in the first quarter Google retired its traditional text ads. Those text ads can continue to run, but advertisers cannot load new copy using the format.
Overall, Google search ad spending rose 23% in the second quarter, while clicks rose 23% and the average cost per click held steady. Looking specifically at the retail and consumer goods vertical, Google search ad spending rose 25%, clicks increased 21% and the cost per click rose 3%.
Moreover, 39% of retailers’ Google search ad spend was dedicated to smartphones, which accounted for 56% of ad clicks. Tablets accounted for 10% of retailers’ ad spending and 10% of clicks, with desktop and laptops accounting for 51% of spending and 34% of clicks.
The report also shows that Google dominates the smartphone search ad market, accounting for 97% of smartphone paid search clicks in the first quarter. That compares with desktop, where Google accounted for 80% of paid search clicks. Overall, Google accounted for 89% of paid search clicks.
Merkle also notes that overall organic Google search visits grew 5% in the second quarter, the first year-over-year increase since the third quarter of 2015. Following 2015’s third quarter, Google made PLAs more prominent and added a third top-of-page text ad on mobile, which led to declines in organic search results.
Google’s growth stands in stark contrast to its competition.
Spending on Bing Ads and Yahoo Gemini search ad platforms fell 3% year over year, which was an improvement over a 14% dip in the first quarter. Meanwhile, clicks on those platforms declined 7% and the cost per click rose 5%. Bing Product Ad spending rose 11%.
The report also finds that social media sites accounted for 3.0% of all site visits in the first quarter and 3.7% of mobile site visits. Looking specifically at social media advertising, Merkle reports that Facebook ad spending rose 56% during the quarter. Facebook Inc.’s cost per click rose 9% and impressions fell 9%.Favorite