It’s probably not too surprising to hear that retailers have doubled their year-over-year spend on Google product listing ads this holiday season thus far. After all, the paid format of Google Shopping had just rolled out in the fall of 2012. What is stunning, however, is the four-fold increase in revenue that retailers have realized from PLAs versus 2012, according to a holiday retail report from Kenshoo out this week.
ROAS reached $8.62 in the 26 days ending with Cyber Monday that were analyzed for the study. Yes, PLAs delivered a nearly 9 to one return on investment in the early holiday shopping season.
PLAs also outperformed traditional paid search text ads across most metrics: 27 percent higher click-through rates, 15 percent lower CPCs and 40 percent higher average order value. Conversion rates remained 20 percent higher on traditional paid search ads, however.
Also interesting is that impressions increased by just 65 percent, but led to a 115 percent increase in clicks for advertisers. The click-through rate rose 30 percent this year to an average of 3.3 percent globally, up from 2.6 percent in 2012.
PLA impressions and clicks peaked on Black Friday, with Cyber Monday trailing slightly behind the traditional kick off of the shopping season. Revenues also peaked on Black Friday.
According to research from investment bank Jefferies, 63 percent of searches are return a PLA in the US this holiday season, up from 49 percent in October. The firm found that in UK PLA usage is accelerating quickly, with 7.9 thousand advertisers running 192 thousand ads. UK PLA penetration levels are now roughly 6 months behind the US.
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