Google PLAs Offer 25% Higher Return On Spend Than Text Search Ads

October 15, 2012

This article is included in these additional categories:

Analytics, Automated & MarTech | Data-driven | Digital | Europe & Middle East | Paid Search | Retail & E-Commerce

US Google Product Listing Ads (PLAs) outperform text search ads in click-through rates by 47%, in conversion rates by 38%, and in return on ad spend (ROAS) by 25%, according to [download page] an October 2012 report from Kenshoo covering Q3 activity. The average ROAS among the select merchants examined was $3.96 from PLAs versus $3.17 from text search ads. These findings are especially significant given that beginning October 17 2012, Google Shopping results in the US will reflect only merchants that buy PLAs.

An RKG Digital report also released this month found that Google PLAs accounted for 20% of Google’s paid search clicks in Q3, with a CPC 15% less than the average non-brand text ad.

Yahoo! Bing Outperforms Google in ROAS

Kenshoo’s “Global Search Advertising Trends” reveals that, as in each of the previous 6 quarters ending Q3 2012, the Yahoo! Bing Network (YBN) outperformed Google in ROAS, although YBN delivers only a fraction of Google’s click volume. On a normalized basis, the gap between ROAS for YBN and Google was 28%. Still, Google delivered 684% more overall traffic in that same quarter.

Spend, Impressions, CTRs Up; CPCs Down

US paid search advertisers in Q3 saw a 21% YoY increase in impressions and a 20% increase in click volume, according to Marin Software. Click-through rates (CTRs) remained stable while cost per click (CPC) continued to drop, down 14% to $0.82. Kenshoo observed the same trend, though reported vastly different costs, with a drop from $0.60 in Q1 2011 to $0.48 in Q3 2012. By contrast, CPCs in the EU (excluding the UK) dropped over that same period from just over $0.40 to $0.37, while CPCs in the UK rose from about $0.39 to $0.45.

Kenshoo reports that regionally, paid search ad spend is up 29% year-over-year in the US, so is growing faster than in the UK or the rest of the EU. Still, each region shows increased year-over-year ad spending for each quarter of 2012.

About The Data: An aggregate data set was built from Kenshoo clients that had been active during the previous 18 months. This rolling data set covered several billion dollars in global paid search ad spend. In cases where it was useful to compare data from the previous 18 months to even earlier data, only data from the set of Kenshoo clients that had been active for the newly-defined and extended time period was utilized unless otherwise noted. All volume metrics have been normalized to a factor of 1 based on the initial quarter of data (or other baseline quarter as noted). Data points from other quarters are based on a multiplier from baseline quarter ”“ for example, 1.55 means that volume is 55% greater than volume in baseline quarter measured. To determine return on investment (ROAS), an aggregate data set was built from Kenshoo clients that had been active during the previous 18 months and tracking direct online sales revenue through the platform. For regional comparisons, UK was excluded from EU data (even though it is a member country) so that it could be analyzed separately.

PLA data reflects an aggregate of Kenshoo clients that are running PLA as well as Google campaigns with keywords covering similar product themes, excluding brand and head terms. Sample size includes more than 1.5+ million clicks.

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