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On 13 February Google Shopping will transition from a free to a paid for service that is only available to Product Listing Ad customers.

The service moved to a commercial model in the US in October, causing some annoyance among merchants who had been enjoying the free extra traffic that Google Shopping brings.

But new research from Marin Software suggests that advertisers who have launched PLA campaigns in the US have achieved a great deal of success.

More than 100,000 retailers had inventory in Google Shopping by the end of September 2012 and reaped the rewards during the holiday season.

The click share for PLAs increased in the US from 2.1% in January 2012 to 6.6% in December 2012, indicating that shoppers are finding the ads increasingly relevant to their search queries.

Furthermore, one month ahead of the transition from free to paid the share of impressions of PLAs compared to standard PPC text ads was 4% to 96% respectively, but by the end of December this had increased to 6.1% of impressions.

Marin suggests that this was not only due to more online retailers deploying PLA campaigns, but also the increase in product related searches during the holiday season.

On top of the increase in click share and impressions, PLAs ended 2012 with a higher click-through rate (CTR) and lower average cost than text ads.

This tallies with two studies we previously reported which found that PLAs far outperform standard text ads in terms of CTR and CPC.

Analysis by Kenshoo of more than 270m global impressions and clicks showed that the CTR for PLAs was 73% higher than standard text ads and more importantly the conversion rate was 35% higher.

Furthermore, the average CPC was 36% lower meaning that the ROI achieved with PLAs is 46% better than with standard ads.

A separate study by The Search Agency found that PLA spending among its clients saw a significant increase in market share between Q2 and Q3, probably due to the changes in the way Google Shopping works.

PLA moved from a 1.5% market share in Q2 to 5.6% in Q3, while its click share also increased from 1.2% to 7.9%.

The report also found that CTR increased from 1.89% to 2.37% between Q2 and Q3, while CPC fell from 41 cents to 26 cents in the same period.

Overall this means that PLAs present a decent opportunity for advertisers, which should lead to increased investment in the ad format when it transitions to a commercial model in the UK in a few weeks.

David Moth

Published 30 January, 2013 by David Moth @ Econsultancy

David Moth is Editor and Head of Social at Econsultancy. You can follow him on Twitter or connect via Google+ and LinkedIn

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