Retailers Increase PLA Spend 300% in 2013 as CPCs Continue to Rise

Kye Mou
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January 22, 2014

2013 marked the first full year of Google Shopping since the transition to a commercial model built on PLAs. With Google Shopping campaigns slated for release later this quarter, retailers must not only prepare for the upcoming changes to AdWords, but also familiarize themselves with shifting PLA trends in the new shopping landscape. To help advertisers remain competitive and win the battle for revenue online, Marin has released the 2014 annual research brief, examining the current state of Google Shopping. Analyzing year-over-year performance, with a focus on the holiday season and consumer engagement across devices, this reports provides a comprehensive breakdown of PLA performance in 2013 and insight into what retailers should expect in 2014.

Our research started by analyzing the meteoric increase in spend on PLAs throughout 2013, especially during the holiday season. Significant year-over-year increases directly linked to the rise in competition as more advertisers increased invest in PLAs, drove CPCs to historic levels. With advertisers continuing to allocate more budget towards PLAs and away from text ads, the search industry is undergoing a dramatic shift. The seemingly overnight success of PLAs and the emergence of hotel price ads (HPAs) foreshadow a search landscape where advertisers, whether in retail, automotive, or financial services, will have at their disposal richer and more engaging, industry-specific ad formats. These will undoubtedly emerge over the next two years.

The findings in this report not only impact advertisers across industries, but also how advertisers engage their customers across devices. During the holiday season, retailers witnessed shoppers favoring smartphone PLAs over its desktop and tablet counterparts. Not only were they cheaper, but smartphone PLAs also outperformed PLAs delivered on desktop and tablet devices from a CTR perspective. If 2013 was the year of mobile, or more accurately, enhanced campaigns, then 2014 is certainly the second year of mobile. Marin predicts that by December 2014, 40% of all PLA clicks will occur on smartphones. That’s a lot of clicks that retailers will need to provide a mobile optimized shopping experience for.

For more 2013 PLA trends, findings, and predictions, download our 2014 annual report, The State of Google Shopping: Mobile Shoppers & Record PLA Spend Drive Success for Retailers.

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