Google’s paid shopping listings boost CTR, cheaper than text ads: study

Google’s paid shopping listings, which are set to come into effect in Australia this week, boost the share of clicks on product listings by 210%, a study has found.

Global analysis conducted by digital ad platform provider Marin Software found click share of Product Listing Ads (PLAs) as a percent of total search clicks increased 210% in the past year.

Google transitioned Google Shopping to a commercial model in October 2012 in a number of markets, and has scheduled the switch in Australian for 13 February. The change means that previously free listings will now only be available on a paid basis via an enhanced sponsored placement similar to AdWords.

The new system has paid dividends for retailers and boosted consumer engagement, says Nick Gill, managing director, Marin Software Australia. “Google’s decision appears to be paying off with increased user engagement and advertiser investment,” Gill says. “During the fourth quarter of 2012, we saw some retailers allocate as much as 30% of their spend towards PLAs.”

According to Marin’s findings, advertisers increased their share of search budgets directed towards PLAs by nearly 600% in the last quarter of 2012. The study indicates users of Google search are seeing PLAs more often, and are increasing their engagement with the ad format. In the last quarter of 2012, the impression share of PLAs jumped 60% as holiday shoppers used the ads to make purchase decisions.

Concerns have been voiced that if not used correctly, the ads could become costly for retailers. But PLAs ended 2012 with a higher click-through rate (CTR) than text ads, and an average cost lower than of traditional text ads, Marin found.

Read: “The transition is both a challenge and an opportunity for retailers” – Mark Gray, managing director, Australia and Asia Pacific, ChannelAdvisor.