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Adchemy Product Listing Ads (PLAs) Research Reveals Retailers Leave Money on the Table by Focusing Primarily on High-Volume Products

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Adchemy Product Listing Ads (PLAs) Research Reveals Retailers Leave Money on the Table by Focusing Primarily on High-Volume Products

FOSTER CITY, Calif., March 5, 2014 /PRNewswire/ Adchemy, provider of cloud-based software that radically simplifies ecommercegrowth, today released new research findings that will help marketers refine their PLA campaigns to maximize return on advertising spend (ROAS). Online marketers have steadily increased PLA spend since Google debuted the image-based search tool. In the haste to achieve PLA dominance, many search marketers focused only on their most popular products since they generate the highest sales volume. Today's findings available on the Adchemy website prove that this strategy fails to maximize PLA campaign potential.

Scott Jewett, senior director of solutions consulting and lead generation at Adchemy, will be presenting the research today at eTail West at 1:25 p.m. CST.

"Our data reveals that a significant amount of PLA revenue comes from single-conversion SKUs and that those conversions have a higher return on ad spend," said Jewett. "Even across millions of unique SKUs, a significant chunk of them receive impressions and clicks, and those that convert just once are often more profitable than those products with multiple conversions."

Key findings from today's report include:

  • SKUs with one conversion in Q4 2013 accounted for 21 percent of PLA revenue
  • SKUs with one conversion in Q4 2013 had an ROAS of 7.3 percent
  • SKUS with more than one conversion in Q4 2013 had an ROAS of 4.1 percent
  • 24 percent of PLA gross margin is attributed to SKUs with one conversion in the quarter

PLA campaign managers need more bidding control at the product level

Maximizing ROAS across millions of SKUs remains an operational challenge for PLA campaign managers. This is a result of large product targets and ad groups that limit the ability of marketers to control bidding at the individual product or SKU level. This loss of control often leads to "bleeders" that drive down campaign ROAS by attracting a high number of non-converting clicks. Today's research makes it clear that PLA campaign managers need more control at the product level to effectively prevent "bleeders" from driving down overall campaign performance.

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