Due to the coronavirus effect, Prime Day, Black Friday and Cyber Monday are taking place in one single quarter and eCommerce in general has seen surges with new customers and regular ones now willing to buy more and different products, e.g. washing machines, online. This led to a year over year increase of +81 % in ad revenue. Additionally due to the new circumstances conversion rates (CvR) have increased by +11 % and CPCs (cost per clicks) have decreased by -12 %.
Predictions for Q4 and How to React
Since the three major shopping events on Amazon will be very close together, Sellics expects very strong deal day performances while the periods of “shopping fatigue” in between will be much shorter. This fact combined with a new environment with much more ad revenue due to greater volumes of sales, lower CPCs on average in between deal days and higher CvRs translates to an overall increase in ad efficiency, i.e. lower Advertising Cost of Sales (ACoS) and higher Return on Ad Spend (RoAS): the Q4 of the century.
To boost performances, Sellics has identified three steps that brands, agencies and online merchants should take:
- Maximize visibility across the different Amazon ad types:
From Sponsored Products, Sponsored Brands to Sponsored Display – all three ad types are important, if brands don’t want to lose out on revenue or simply leave ad space open to competitors.
- Campaign strategy:
The cornerstone of any Amazon ad strategy are Sponsored Product campaigns. Here, it’s a best practice to first easily identify relevant keywords via automated campaigns and then optimize those keywords in manual campaigns. All identified top keywords can also be used for Sponsored Brands and Sponsored Display campaigns.
Best suited to push brand awareness are Sponsored Brands campaigns. One of the most important ways for optimization is A/B testing different ad elements like text, image, different landing pages etc.
Addressing customers outside of Amazon (remarketing), can be best achieved through Sponsored Display campaigns. They can also be used to target product pages of competitors.
- Optimizing bids:
Smart bidding and continuous adjustments will make the difference between success and failure. For instance, CPCs will be higher on Prime Day, however, revenue and RoAS will be significantly better due to a tremendously high demand on that day – even for upscale products. The period between Prime Day and the beginning of the holiday shopping season is much shorter this year, therefore, comprehensive monitoring of the market and how demand is developing is essential.
To grade the performance of their Amazon PPC campaigns, brands and agencies can also use a free analysis tool by Sellics which offers customized optimizations suggestions.