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Consumers 'turning on to Google's visual shopping ads' – report

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Google's product listing ads (PLAs) are being more and more widely used by those on Google Shopping in recent months, at the expense of text ads.

That's according to a report released this week by Marin Software, which provides a revenue acquisition management platform for advertisers and agencies. The report findings, based on the more than $4bn in annualised paid search spend through Marin Software’s platform, show PLA click-through-rates have increased each month since February and reached record levels in July – 21% higher than the click-through-rates of text ads.

The high click-through-rates of PLAs, coupled with a 93% year-on-year increase in click share, appear to show a widespread acceptance of PLAs by online shoppers, said Marin. "Retailers, in turn, are responding by increasing their investment in the ad type as they prepare for this year’s holiday shopping season," it said.

Marin Software’s report, “Google shopping ads: product listing ads deliver for retailers,” consists of statistics and trends uncovered through an examination of the Marin's own advertising index. The index consists of advertising data from leading global brands that manage more than $4bn in annualised paid search spend through Marin’s platform.

In October 2012, Google transitioned Google Shopping to a sponsored format, sparking a dramatic growth in PLA impressions and clicks. Advertisers have continued to embrace the new ad type.

The report shows shoppers find PLAs much more relevant to their product searches than they do text ads. Year-over-year, the share of PLA clicks to standard text ads increased 93%. Likewise, in July 2013 the click-through-rate of PLA ads – the number of individuals that view an ad and subsequently click on the ad – was 21% higher than the CTR of text ads.

With consumer enthusiasm growing, advertisers are increasing their use of PLAs. Between October 2012 and July 2013 the share of PLA spend to standard text ads increased 59% with retailers allocating as much spend in June 2013 towards PLAs as they did during the popular holiday shopping month of November 2012. Marin said it expect the level of spend directed to PLAs to hit further highs in Q4 this year.

The cost-per-click of PLAs is also on the rise. In July 2013, PLA cost-per-click increased 53% year-over-year, while the cost-per-click of standard text ads increased 10%. Despite the rise in cost, PLA cost-per-click is lower than for text ads.

PLA best practices and additional PLA data figures are available in the full report, “Google Shopping Ads: Product Listing Ads Deliver for Retailers.”

Matt Ackley, chief marketing officer at Marin Software, said: “Google Product Listing Ads showcase what happens when users encounter relevant, engaging ads. There is no doubt the online shopping landscape has been significantly changed by PLAs and we expect even more notable results from here.”
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