Google’s Product Listing Ads produce big sales gains in March
April 8, 2016 10:51 AM
Google Inc. is turning the dials on Product Listing Ads, which generated more sales for marketplace sellers on Google Shopping in March.
Sales by ChannelAdvisor clients through Google Shopping and Product Listing Ads increased 41.8% year over year in March. ChannelAdvisor, which helps retailers sell on multiple marketplaces, produces monthly reports that compare merchant clients’ sales through online marketplaces and marketing channels, including Amazon.com Inc. and eBay Inc.
Google is showing more products via Product Listing Ads, Scot Wingo, executive chairman of ChannelAdvisor, says in a blog post. PLAs show up in the center of a search results pages with an image, the price and the retailer’s name. Google draws that data from product feeds retailers send for inclusion in the Shopping tab of Google. Google is displaying more products in a couple ways, Wingo says. The ad unit, or the block of ads in a Google search result, is bigger and takes up more room on the search results page. In addition, Google is putting more products into its Shopping carousels, which shoppers can scroll through with arrows.
“All of these choices are decreasing conversion rates, but because of the sheer ‘surface area’ of the PLA and Google Shopping ad units, they are driving a large increase in the year-over-year same-store sales gross merchandise value,” Wingo says.
Conversion rates on Product Listing Ads declined year over year to 2.24% in March, down from 2.53% in March 2015. Average order value decreased 2.8% to $112.35 from $115.52 in the same period a year ago. Even though conversion rate and average order value declined, sales through Product Listing Ads increased because clicks on ads have surged in 2016, more than making up for the other two declines, Wingo says. ChannelAdvisor does not report the number of clicks on Google’s Product Listing Ads specifically, but it does measure and report clicks across multiple channels, including Google, Bing and Yahoo. Clicks across all channels increased 13.5% year over year in March.
Sales for ChannelAdvisor clients through Amazon.com increased 14.9% year over year in March, slowing from a 16.6% increase in February. 38.6% of orders shipped through Amazon in March were handled by Fulfillment by Amazon, in which retailers pay Amazon to store inventory and pick, pack and ship orders. When marketplace merchants use Fulfillment by Amazon, their products become eligible for Prime two-day free shipping. This compares with 31.2% of orders shipped through Fulfillment by Amazon in March 2015.
Sales through eBay declined 0.2% in March compared with a year ago, with an especially large drop in auction sales, which declined 20.8% year over year. Sales of fixed-price goods for March decreased 5.8% from March 2015 while sales through eBay Motors, which includes purchases of auto parts and accessories, increased 11.3% in March.
Sales on marketplaces that aren't Amazon or eBay, such as the marketplace operated by Sears Holdings Corp., increased 37.2% compared with March 2015.