How Do Google Vehicle Listing Ads Perform?
Vehicle Listing Ads are one of Google’s newest products for Automotive Dealerships looking to promote their inventory. Paid search advertising has long been the advertising tactic of choice for purchase intent-driven advertising for Tier 3, local automotive advertising.
Let’s take a look at how Search Ads have performed against VLA’s over a 12 month period. For this, we’ve taken an example account with a 12-month spend of about $27,000.
Here are the raw stats from the VLA’s and Search Ads used for the comparison:
Vehicle Listing Ads Click-Through Rate
There are some stand-out numbers above, with search leading only in the CTR comparison. Due to the spending difference, the best perspective is to break these all down to a $100 spend.
With the dollar-for-dollar comparison, the Cost Per’s are significantly lower on VLA’s with a 67% decrease on the Cost Per Click and 95% decrease on the CPM. Despite the reduced CTR, there are still 3 times the amount of clicks from the VLA campaign than the standard search ads.
Comparing Vehicle Listing Ads Click-Through Rates:
A click-through rate (CTR) is often a guiding metric of performance and efficiency. When comparing Search Ads (6.25%) vs. VLA’s (.85%) CTRs, it definitely looks like search ads are the more efficient platform:
It’s important to consider the value of a Click Through Rate (CTR), though, and how it is measured. One primary reason for the lower CTR of the Vehicle Listing Ads is due to the amount of ads that show up this way. It’s not uncommon for multiple VLA’s to be shown by a single advertiser; however, only one of those ads can really be clicked at a time. Standard Search Ads only show one by a single domain, automatically increasing the CTR but not necessarily the overall number of clicks and cost for an individual click.
We’ve already seen above when taking the $100 comparison for either ad unit that the click differential is 268% in favor of the VLA’s. Since the CTR calculation is clicks divided by the number of impressions, if the clicks are higher for the VLAs but the CTR is lower, then that means the impressions must be higher. The latter is exactly what we saw and it continues the narrative of multiple impressions per search. That same budget comparison saw 2100% more impressions for VLA’s compared to standard Search Ad units – far outpacing the 268% increase in clicks.
The Cost of Google Vehicle Listing Ads
Cost and Cost-Per-Click (CPC) are another important lens to view ad performance through. VLA’s and standard Search Ads look very different in this perspective as well. Over the 12 month comparison period, the VLA’s came in at about 1/3rd the cost per click of standard ads with an average $.40 CPC for VLA’s and $1.20 CPC for standard search ads.
The cost metric is a massive benefit of the VLA ad units over standard search. Unlike the CTR comparison, the CPC is a true gauge of ad budget efficiency making VLA’s a more budget-friendly advertising opportunity.
Overall, the comparison between standard Search Ads and Vehicle Listing ads is quite stark. The VLAs have the benefit of placement, cost, and frequency. They show up at the absolute top of search results, have a significantly lower CPC, and can have multiple vehicles show up at a single time. As such, for a broader-based automotive advertising campaign, the VLAs are a clear winner.
That being said, VLAs lack the same targeting that Search Ads have. With VLAs, you’re essentially putting all of your trust in Google for targeting (learn VLA optimization tricks). Search Ads still allow you to get more targeted, so if there is a specific vehicle in need of pushing or a particular keyword of interest, search ads are still the preferred advertising unit.
Additionally, a combined advertising strategy, using VLAs and standard Search Ads also has a significant benefit – allowing advertising to show up in the vehicle ads unit AND in the search ad unit. Under most circumstances, the advertiser can really only be charged for a single click but can really own the SERP through having both!