Why You Should Spend More on Google Shopping vs Text Ads

November 17, 2015 in Google Shopping, Google Ads

By now, most retailers are familiar with the benefits of Google Shopping. But a case study by Periscopix reveals a costly mistake that is all too common.

Before adopting product listing ads, Heal’s Furniture had found it difficult to reach searchers who weren't looking specifically for the Heal's brand. The high-end furniture retailer out of the UK was spending the bulk of its marketing budget on text ads, and as a result, was finding it very expensive to acquire sales through generic furniture terms. The company has since pushed more of its budget toward product listing ads and away from text ads, which has led to a big jump in conversions.

The Case for Product Listing Ads

These findings won't be news to retailers who have experience using product listing ads and text ads. For those of you still on the fence about allocating more funds to product listing ads (over text ads), here are a few key points that may persuade you:

  • Cost-per-click rates for generic search terms can get expensive.
  • Showing the price and style of products leads to more qualified traffic.
  • Appearing more than once can lead to higher conversion volumes.
  • Visual nature of product listing ads was more successful in getting people’s attention.
  • Brand search queries can trigger both search text ads and Shopping ads (see image below).

Brand Name Appearing in Text and PLA in Google Shopping

Even when Periscopix had to scale back on ad spend, they were still able to achieve better ROI for Heal’s by pushing the budget into Google Shopping, including:

  • 26% higher conversion rates for product listing ads vs. text ads
  • 23% lower cost-per-click for product listing ads vs. text ads
  • Increased sales/spend ratio (through product data optimization)

Budgeting for Google Shopping Success

In general, advertisers spend more of their PPC budget on text ads despite the fact that PLAs outperform their text counterparts in almost every metric. But the leaders of the pack have already made the switch. Some of the biggest advertisers in ecommerce are showing a clear preference for product listing ads based on their spending habits.

According to AdGooroo, Walmart puts 71% of its ad spend on PLA and only 29% on text ads. Best Buy: 79% PLA, 21% text ads. Overstock: 74% PLA, 26% text ads. Staples: 85% PLA, 15% text ads. VitaminShoppe: 98% PLA, 2% text.

This tells us that some of the brightest minds in ecommerce are convinced about the value of PLAs — and they're putting more of their budgets where they get better results with less competition.

Bryan Falla
Director of Marketing
Bryan is a digital marketer with roots in journalism and creative writing. Over the past decade, he's helped hundreds of online retailers develop and implement ecommerce marketing strategies. When he isn't educating retailers on ecommerce, he's out exploring South Florida and stalking local breweries.