How New Google PLA Adding to Google’s Bottomline ?

Product Listing Ads (PLAs) are Google’s search ads that include richer product information, such as an image of the product, price and merchant info, without requiring additional text or keywords. When users search for an item, Google will automatically show the most relevant products along with the image, price, and product name. These PLAs now form the backbone of a user’s Google Shopping experience.

The Following Picture Shows Google’s New PLA laid out on the search result page which is contributing to Google’s Bottom line heavily, even in the Mobile Ads Format.
Google PLA Layout

Google is monetizing these ads on both a cost-per-click (CPC) and cost-peraction/ acquisition (CPA) basis (CPA is US-only, for now). For CPC ads, Google is paid when a user clicks the ad. For CPA ads, Google is paid when a user performs a specific action, such as adding an item to a shopping cart, making a purchase, or signing up for a free email newsletter.

Why are PLA’s So Important to Google ?
PLAs are important because these image-ads get more clicks than the traditional Google ‘blue-link’ text ads they effectively displace, translating into more revenue for GOOG. PLA clicks also convert into purchases at higher rates than text-ads, meaning they should command higher rates over time.

Google is working on Innovative methods where these ads evolve in a way that users can purchase the item without ever leaving the Google’s search results page. Interestingly, we note that Google has recently added new features to their PLA ad format – a component called a ‚pla-hovercard‛ which can display incremental information on a subsequent ‚hover‛ or ‚mouse-over‛. Traits include pla-unit-title.

Google and Retailer Partnership on PLA
PLAs that feature size / color / option dropdown menus, allow users to specify precisely the item they want. The trick is maintaining accurate inventory levels, but Google is introducing tools that allow retailers to upload detailed inventory information into Google’s database. We also think PLAs can be an effective sales channel for local brick & mortar retailers. Google has even started testing same day-delivery in the Bay Area, which works like this: 1) retailers upload detailed inventory info; 2) users search for and subsequently purchase the items through Google; and 3) Google coordinates with 3rd party services to handle immediate delivery of these items.

With these roll out, Google is looking more like Amazon. However, Amazon and eBay themselves are heavy spenders on Google’s PLA Platform.