• by Laurie Sullivan  @lauriesullivan, September 6, 2012

Google now generates revenue from Product Listing Ads, leading Adlucent CTO Michael Griffin to predict that PLAs will soon replace paid-search ads at the top of queries because consumers prefer to click on text with images.

Griffin, who ran Amazon's paid-search campaigns before the Internet giant took the project in-house, said Google also garners double the revenue when brands bid on paid search and pay to feed product data into Google Shopping.

Google transitioned Google Product Search into Google Shopping, dropping the free service, requiring merchants to pay for PLAs. For Google, it provides another tool to improve the relevance of queries in search engine results. It also cleans up garbage product descriptions, provides a universal structure for product listings and allows brands to serve up a double dose of ads per page. Will it mean the end to paid-search ads for retailers looking for better return on investments from search engine marketing?

Product search queries on google.com returns brand descriptions, prices and retail names for "red strapless dresses" at the top of organic search results, whereas Bing serves up images without sales-related information. The move updated search engine query rankings, combining relevance measurement and bid signal.

Griffin said some brands double conversion rates for less than the price of paid-search ads. Online photography site Adorama, supported by Adlucent, saw PLA click-through rates (CTR) rise 176% and conversion by 100%. Revenue from PLAs grew 63% in Q2 2012. PLA clicks impacted nearly half of its non-brand revenue.

Gaining better results means brand marketers must stop treating the PLAs like comparison shopping sites, allowing engines to optimize descriptions, Griffin said.

Adlucent built its Precision Product Targeting for PLA platform on the company's 10-year history of delivering paid-search performance for retail brands like Anthropologie, Buy.com, Jewelry Television, Oriental Trading Company and Free People. But the company isn't the only one.

Didit cofounder Kevin Lee said the company acquired Inceptor for its expertise in Google Shopping ads or PLAs, feed management, and optimization. Digital marketing company Kenshoo on Tuesday released a PLA function as part of its enterprise platform that allows search marketers to manage tracking within data feeds and better predict PLA revenue per click based on set bids.

PLAs won't become Google's next cash cow, but will feed into the overall cash cow by maximizing revenue per search (RPS), said Aaron Goldman, CMO at Kenshoo. "Per individual query, PLAs may cannibalize text search ads, but at the overall monetization-level, it will increase RPS and total revenue for Google," he said.

By displaying PLAs on product-related Web searches, Goldman said Google gives marketers the opportunity to capture more real estate on the results pages. Merchants once viewed the tool as a free way to direct traffic to Web sites, but neglect data and descriptions. Making PLAs the default for Google Shopping, the engine incentivizes marketers to keep their listings updated.