While many companies use online advertising to promote products and increase sales, ecommerce merchants have the advantage of being able to sell directly to consumers online, adding another dimension to their digital advertising goals. If you’re an ecommerce merchant placing PPC ads via Google Adwords, you might not be taking full advantage of your digital advertising options. If you haven’t considered incorporating shopping ads (PLA) into your Adwords PPC campaigns, it’s time to reconsider your online advertising strategy.
The two main digital advertising spaces that ecommerce merchants should be concerned with are text ads and shopping ads. You can manage both from your Google Adwords account, but they serve different purposes and are different in some key ways.
Text Ads – Text ads are the conventional text-only PPC ads you see with search marketing advertising campaigns. They include a link to your website or landing page, a few lines of copy, and perhaps a few other perks in the case of mobile ads. Text ads give you more precise, granular control over when your ads show up, but for many industries they can be highly competitive, and they don’t always stand out well in the sea of text people see in their search results.
Shopping Ads – Shopping Ads, also known as product listing ads (PLA), are a type of ad tailored towards online merchants. They include a product image and are driven by products and product categories, rather than keywords. For serious online merchants, this one of the best means of getting your products in front of people who are looking to buy them.
To get a better sense of how each type of ad performs, we pulled the numbers from one of our long-running campaigns for a client in the ecommerce space. The results are a fairly good representation of how most similarly structured campaigns perform. We found that the CTR was better for text ads, most likely because text ads give advertisers greater control over the keyword matching, so they were more likely to be a good fit with the search terms used by consumers. However, our client saw better conversion rate, conversion cost, and CPC with Shopping Ads compared to text search ads. The bottom line is that shopping ads perform very well for ecommerce.
These results line up with the digital marketing activities of some of the biggest online retailers. Walmart puts over 70% of their digital ad spend into PLAs, and companies like Best Buy, Staples and Overstock.com follow suit with PLA-heavy online advertising budgets. The question is, why are these shopping ads performing so much better than text-based PPC campaigns?
1. Better Brand Recognition with PLA
Shopping ads win out when it comes to leveraging brand name searches. A recent case study for Heal’s furniture showed the benefits of leveraging your branding to get conversions. Heal’s, a well-established furniture brand, spent years sinking their digital ad spend into text ad campaigns that weren’t converting. Heal’s study showed that conversion rates for brand related searches are as much as 26% higher for shopping ads than for text ads. By focusing their advertising efforts on product listing ads, Heal’s was able to leverage their brand name to drive more sales. For merchants looking to leverage branded products to increase sales, PLA is a better option.
2. Spread Your Ad Spend Across the Buying Cycle
As purchasing decisions get more complex and expensive, consumers tend to spend more time researching and reviewing their options before making a decision. Oftentimes text ads land in front of searchers who are still in the early stages of the buying cycle, and who may not be ready to make a purchase yet. Since the people who are served PLAs tend to already be looking to purchase items, rather than just researching them and looking for information, they are a better bet when it comes to actually making a purchase.
3. A Picture’s Worth…
The benefit of the more visually appealing shopping ad format shouldn’t be underestimated. Studies show that people are 40% more likely to engage with visual content than text-only content, leading to a higher conversion rate for visually appealing ads. Another downside of text ads for ecommerce is that merchants have limited character space to describe their product. By providing shoppers with an eye-catching photo of your product, you can boost your descriptive power and compensate for having minimal text space.
Don’t start canceling your text ad campaigns quite yet. They’re a powerful, flexible way to reach buyers and still perform well when managed correctly. While many successful retailers are turning to shopping ads, Amazon.com, another huge online retailer, puts all their stock in text ads. Text ads are still a high-performing way to reach customers. Furthermore, if you move a very low volume each month, shopping ads aren’t always a great fit.
However, for many ecommerce merchants, the importance of diversifying your PPC spend with shopping ads can’t be understated. Product listing ads provide a straightforward way for merchants to reach customers, and they can give your ad campaigns a big performance boost. Many large retailers have some level of a mix between the two form of ads in order to take advantage of both spaces.
The strongest solution for a healthy ecommerce PPC strategy is to employ a mix of shopping ads and text ads. Text ads give you more control over your audience, while shopping ads help you hone in on searchers who are ready to make a purchase. Balancing your advertising efforts between the two advertising methods can help you maximize your PPC results. By playing around with your ad spend for both PLA and text-based ads, you can find the right mix of each ad type to get the best overall returns for your advertising dollar.
Webrageous has extensive experience managing both PLA shopping and text ad campaigns for clients in a number of industries. If you’re interested in exploring product listing advertising options, we can help you determine whether shopping ads are a good fit for your company, and how you can incorporate them into your existing web advertising campaigns. With Webrageous you can find the right balance between shopping ads and text ads to make sure that your ecommerce business can stay competitive in the digital advertising market. Contact us today to see what our expertise can bring to your PPC campaigns.