Product listing ads (PLAs) are crucial to any brand’s search strategy. Yet brands have become increasingly reliant on retailers for this core piece of visibility, as only advertisers with DTC e-commerce can purchase search ads and most CPG brands eschew DTC and its associated complexity in favor of distribution through third-party retailers. As a result, they yield this major advantage to disruptor brands with DTC capabilities.
In the Personal Care category, DTC disruptors are claiming a growing stake in competitive categories, according to L2’s report on the PLA landscape. Shaving & Hair Removal has not been the same since Dollar Shave Club and Harry’s came into the picture, as these brands are able to purchase their own PLAs. As many as 37% of PLAs that show up on searches for the brand Edge are for other brands, including Harry’s and Dollar Shave Club as well as non-Index, ankle-biting competitors like The Art of Shaving and Dorco. Even deep-pocketed brands like Gillette take a hit: both Harry’s and Dollar Shave Club own 2% of PLAs in Gillette branded searches.
Longstanding enterprises can stem this tide through their relationships with retailers. While Honest purchases competitive PLAs in branded searches for Kimberly-Clark’s Pull-Ups and U by Kotex, its share of PLAs in these branded searches is less than 2% for any individual brand. Brands with established retail partners may be able to exercise greater influence over their PLA buys, and the retailer share of PLAs far outpaces that of DTC brands. For example, Target, which owns 31% of Baby Care branded search PLAs, promotes Pampers and Huggies. Jet, owner of 34% of Shaving & Hair Removal PLAs in branded search, works in the same way, buying PLAs mostly for Gillette, Edge and Schick.
The e-commerce competitive advantage of DTC brands is undeniable. Thanks to their distribution model, they can target consumers further down the funnel and deploy tactics like PLAs that reduce the friction faced by brands reliant on third-party distribution. For brands to defend their real estate, they must understand where retailers are making strong investments in their own brand, and complement the places where they do not with pay-per-click (PPC) ads to ensure that topmost results are not ceded to competitors.