Google made the transition from 'free to list product search' to 'paid product listing ads' in the US last year with mixed response.
There have been complaints that the ads may confuse consumers because they won’t now see every product result from their search but only paid for placements.
People currently believe search is mixture of paid and organic ads and this is now changing. The world of online retail is set to change for both consumer and advertiser with paid product ads.
This paid ad inclusion model has been quite a transition but early signs show that these Product Listing Ads (PLAs) are performing quite well for the online retailers.
This new paid Google Shopping advertising model has in fact seen some eCommerce websites considerably improve their performance.
The new advertising model hasn’t rolled out to all markets yet, with only results from the US having been gathered so far. But data comparing PLAs to free text ads from the same US-based advertisers makes for some interesting results.
PLA’s tend to increase click through rates because they are more eye catching than the regular text ads. Conversion rate is also better from these ads.
The good news for advertisers wanting to try PLAs is that currently cost per click is also low because there is less competition for these than other PPC ad formats.
So online retailers in the US are starting to embrace the new paid product ads, but how will it be accepted as an online advertising model by the rest of the world when it is introduced internationally on Google Search? Only time and user feedback will tell!