Why Retailers Should Spend More on Google PLAs in 2H 2015

We recently took a look at the Marin Global Online Advertising Index, which consists of advertising data from leading global brands that manage more than $7 billion in annualized ad spend through Marin’s platform. By examining consumer behaviors from last quarter, we were able to forecast how search advertising would impact the second half of 2015.

We also came up with three ways to dominate search in 2H 2015, one of which you could call, “Spend more on shopping ads.”

Shopping Ads Quickly Reach Critical Mass

Google’s Product Listing Ads (PLAs) hit the market in late 2012, and user adoption has grown steadily ever since. Especially during the critical holiday season, this ad format proved to be richer, more engaging, and highly successful.

For this particular ad type, we looked at retail advertisers and their audiences. We found that:

• Retail advertisers spent 47.0% more on shopping ads in 2014
  than 2013.
• This year will see another increase of 20.1% over last.
• Roughly a third of all PLA ad spend concentrated in the last quarter of 2014.
• PLA spend in December is forecasted to reach 250% of
  January PLA spend.
• Click behavior during this time mirrors spend behavior, with large surges during Q4 each year.
• This year, PLA clicks are forecasted to be 136% of January’s
  click volume.

All of this data highlights the importance of the holiday season for many retailers. This isn’t so surprising, since PLAs are highly effective at reaching consumers during this season, which starts in November.

Budget Share and Consumer Adoption

In terms of budget share, PLAs have also been steadily gaining ground against text ads in the retail space. While 2013 saw advertisers spike to 23% in PLAs during Q4, overall growth has been slow and steady, taking up just over 20% of all paid-search budgets. This is projected to hit 27% during the holiday season.

Consumer adoption of shopping ads has also shown consistent growth patterns, as the ads have improved and been refined by publishers and advertisers. Shopping ad click share has shown constant growth and made significant gains over the past year and a half. It’s on track to account for over one-fourth of all paid-search clicks by end of year.

Bottom line: Since shopping ad spend is projected to spike dramatically during Q4, retailers should increase shopping ad spend accordingly.

This is just one of three recommended tactics for leading the search field in 2H 2015. To learn more and access full data charts, download our report, Mid-Year Outlook: 3 Tactics to Dominate Search in 2H 2015.