Online marketers poured more money into Google’s multi-billion dollar business as image-based product listing ads (PLA) enjoyed a big year over year increase for both the search ad giant and its competitors. Despite the growth it seems considerable room for improvement awaits those who can fill that space.
The RKG Digital Marketing Report for Q2 2014 found the growth trend in digital ad spending witnessed in the first quarter of the year continue its upward movement in the second quarter.
Comparison Shopping Engines
The report included second-quarter data on Comparison Shopping Engines (CSE). It noted that the share of total CSE spend going to Amazon dropped from 17% in Q2 of last year to 9% in Q2 of 2014 as large advertisers were moved out of Amazon Product Ads by Amazon, ostensibly to move them into the Amazon Marketplace.
With Nextag also down significantly in spend share year over year as a result of poor returns for advertisers, eBay and PriceGrabber have seen huge gains in spend share year over year, the report stated.
Google PLAs
Google enjoyed a 24 percent year over year rise in ad spending from Q2 2013, with RKG noting PLAs contributing to that.
The age of the text-based ad seems to be destined for the same historical footnote that text-only search result pages have today. RKG found image-based product ad spending jumped 72 percent year over year in the second quarter. Text ad spending also rose but at a less glamorous 6 percent year over year rate.
PLAs took in roughly the same percentage of paid clicks for Google in the second quarter that they did in the first. RKG said PLA share of total Google clicks represent 26 percent of overall paid search clicks, and 50 percent of non-brand clicks.
Ecommerce pros have noticed by now the prominent placement Google has bestowed upon their Product Listing Ads. During 2013’s holiday season, Google began serving PLAs above organic search results more frequently according to RKG. This practice led to a jump in clicks from 2013’s final quarter to the first quarter of 2014.
But as noted previously that trend flattened in Q2 2014. In addition to trying to find a way to increase the click volume for PLAs in its search results, Google faces a more significant conundrum in raising those PLA clicks on its search partner sites.
As Google notes about search partners, those sites extend the reach of its advertising. Those partners include non-Google sites such as AOL.com, as well as Google properties like Maps.
On search partners, RKG said PLAs only brought 7 percent of the clicks on ads shown at those locations. Compared to the main Google.com, conversions suffered and ran 47 percent below those happening at Google’s site.
“Advertisers have limited ability to account for this performance difference beyond turning partner traffic completely off,” RKG said of the disparity.
Interestingly the report noted that among advertisers running both Amazon Product Ads and Google PLAs, revenue volume from Amazon’s program was just 7% that of PLAs in Q2, down from 9% in Q1.
Paid Search Traffic vs Organic
The report also suggested that paid search traffic to sites is gaining at the expense of organic search traffic. RKG found in Q2 2014 only 31 percent of all US site visits came from organic search. That represents a drop from 36 percent in the first half of last year.
“As the major search engines work to better monetize their listing with larger and more appealing ads, organic search volume will continue to get squeezed in favor of paid,” RKG said.
