What Should Your PLA Budget Be This Holiday Season?

Category: Paid Search

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Google PLAs or Product Listing Ads have become the real game changer in the retail industry with product specific image ads. Ever since they were introduced, the spending mix on Google PLAs has been increasing. Five years ago, it was at almost 10% and in Q1 in 2016, it’s increased to 37%.

With the holiday season around the corner, the chances of PLAs outsmarting text ads are even higher. There are new features like “Showcase Ads for Broader Queries” or “Buy Button in Ads” that make this visual format of ads even more appealing.

In this context, it’s a no-brainer to invest more in PLAs and earn more. However, is there a percentage mix search advertisers should maintain between Text Ads and PLAs ? The question becomes more pertinent as the holiday season budgeting is taking place nowadays.

Holiday Budget for Product Listing Ads: {40% – 50%} of paid search budget

NetElixir’s Retail Insights Lab studied the trend of various categories and discovered a sweet spot for a PLA budget for the holiday season. It’s not exactly a sweet spot, but a range which ensures the right investment mix in paid search.

The sweet spot: {40% to 50%} of the paid search budget.

This is what we’ve extrapolated from the trends in multiple verticals. It’s the level of investment which will help you capture a universe of searches that could lead to potential clicks on PLAs.

How Did We Arrive At This Range?

If we consider the industry estimates in some of the verticals, for Q1 2016, the PLA spend is averaging around 37%.

What NetElixir feels is that in Holiday 2016, this spend percentage may go up to 50%.

Budget Allocation on PLAs

Five exciting reasons behind the lift in PLA spend:

Google has introduced the following exciting features which show why Google Shopping will matter more to retail advertisers this year:

  • Showcase Ads for PLAs: Specifically for mobile, these ads will show for generic, non-branded search queries like “red dress.” Consumers will review a plethora of results from various brands.

  • Customer Match for Shopping: You can specifically target Gmail users and segment them in your remarketing campaigns.

  • Product Listing Ads in Image Search: PLAs will display in Google Image Search and will help shoppers at the beginning of their purchase experience.

  • Enhancements to Local Inventory Ads: It’s all about shopping locally. Local inventory ads now tell shoppers if there’s a pickup in-store option, if the item is in stock, and more.

  • Purchases on Google: As the name explains, shoppers will be able to purchase items directly from Google’s search results page on mobile.

We’ll continue to help you stay ahead of the competition this holiday season!

P.S: You may also go through our whitepaper library where you will find one on PLA Profit Zone. This whitepaper identifies the sweet spot for PLA profit zone performance.

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