Google PLA is Making Adwords Obsolete

For advertisers with a product (not a service), Google’s Product Listing Ads are much more effective than Adwords.

It’s that old adage again: a picture is worth a thousand words.

Of course, Adwords doesn’t allow for a thousand words… just 25 characters for the title, 70 for the body, and 35 for the display URL. Product Listing Ads are picture + title, and such a better choice.

I attended the Google/Channel Intelligence Shopping Summit in Chicago recently, where the topic of discussion was Google’s transition away from free listings in Google Shopping, and moving to a paid product.

As a marketer and advertiser for my company, I grumbled about spending more of my budget, but hearing Google’s Senior Manager of Shopping Jon Venverloh talk about it quickly changed my perception.

Google Shopping used to include “Froogle” and then Product Search, and it was a free way for advertisers to get their products in front of eyeballs. Google realized they were missing out on $$ as well as weakening the quality of the results.

Now with a bid cost for appearing in PLA, spammy advertisers are dropping away while legitimate businesses can fill in the void.

Google Changed Their Real Estate

It’s been a subtle change, unless you work with this stuff, but Google is devoting a much larger space to PLA than they have with Adwords.

When PLA shows up on the right rail, it dominates the SERP visuals. On the right rail, advertisers can include CTA text and offers with the ad too. This essentially negates any benefit of Adwords for having control of the messaging. An image PLUS an attractive, strong offer? Sold.

CI already has some pretty convincing data about the effectiveness of PLA. They are showing CTR’s 3x higher than traditional Adwords. Conversion rates are higher, and there is now less competition in the space.

Wait, less competition?

Right now many retailers are working furiously to get their PLA plans in place. It’s really a matter of fine-tuning the feed that’s uploaded into Google Merchant Center, but there are budgets to be figured, allocation of resources, and PLA is still an unknown for many.

In fact, according to an Internet Retailer survey from July 16 2012, 23% of retailers are opting OUT of Product Listing Ads, and 29% say they are still undecided!

To me, that represents a huge opportunity. With fewer shops competing for eyeballs, as long as I’ve got the right image and right data in place, I’m going to get the sale.

My company is currently working in PLA and striving to optimize our data feed. We’ve already seen PLA orders overtake the free Google Shopping orders on a daily basis. In some weeks, we’re seeing higher YOY sales via PLA than we ever had with Froogle.

So I’m completely sold. Between the data I’m seeing in our account, and hearing Google’s people talk about their plans for Product Listing Ads, I think there’s a strong argument for the decline in relevancy for text Adwords when it comes to product advertising on Google.