Marketers to Continue Spending on Google PLAs

Last week I blogged on the state of paid search as reported by the Search Agency and the noticeable shift to mobile in 47379_mobile_phone_searching___search. But there’s more going on in the search marketplace. Google’s battle for dominance in this market and its product list ads (PLAs) are winning a bigger share of search marketing budgets.

At the end of 2012, Google controlled 86.5% of all paid search and the rest, 13.5% went to Yahoo-​Bing, according to Adobe’s study of the market. During the course of last year, Yahoo-​Bing gave up 0.6% of the market to Google. Many analysts attribute this shift to the big change Google made last year when it rolled out PLAs. The new Google model, which encourages marketers to pay for search results which used to be free, captured 17% of spending that retailers did on the site as the holiday season progressed.

While PLAs have a 34% higher CTR than standard Google ads, they also have a 12% lower average order value. Analysts believe this new offering from Google will continue to be a productive marketing tool for enterprises.

These findings were echoed by a similar study from Marin Software on the same topic. The healthy increase by many advertisers, not only retailers, bodes well for Google. The search giant faces competition from Amazon as a significant number of consumers go directly to that site to find what they are looking for.  Marin Software CEO Chris Lien points out that PLAs allow Google to have closer ties to retailers who will continue to spend money on its site.

The battle in the search marketplace will heat up throughout the year as the new Yahoo CEO reveals her strategic vision for the firm and as Facebook seeks to change everything about search.

[Sources: 2012 Retail Season in Paid Search. Adobe​.com. 17 Jan. 2013. Web. 6 Feb. 2013; Peterson, Tom. Advertisers Clicking Buy. Adweek​.com. 29 Jan. 2013. Web. 6 Feb. 201] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.