In this guest post, Tara Johnson of CPC Strategy offers the ultimate guide for preparing for advertising your Amazon products in Q4.
It’s no surprise that Black Friday and Cyber Monday continue to be the biggest shopping days of the year (next to Amazon Prime Day, of course).
Last year, Amazon tightened up their standards for sellers and the Marketplace is expected to get more competitive in 2018 and beyond.
While we anticipate the “cost to play” will continue to increase as more Amazon sellers flood the Marketplace, the good news is sophisticated brands who are willing to invest in the platform are also seeing significant return.
In a recent analysis of third party sellers advertising via Sponsored Products, CPC Strategy discovered a +347.04% increase in spend (from Q2 2017 to Q2 2018), but we also saw a lift of +451.81% in ad revenue.
This data indicates revenue lift is outpacing spend lift which means ads are performing better in terms of efficiency YoY – likely due to sophisticated targeting techniques and implementation.
It also means Amazon sellers are willing to spend more because they are seeing a strong return on their incremental investment in Sponsored Products.
It’s pretty straight forward – when Q4 hits, there won’t be any time to test strategies or theories. Sellers who don’t have a clear Amazon advertising plan leading into Q4 won’t maximize their ROI. The time is now to prepare your advertising strategy and make the most of the shopping holiday.
In the following blog post, we take a closer look at what happened in Q4 2017 to better inform advertisers of what to expect in 2018.
What happened in Q4 2017 in regards to Amazon advertising?
According to reports, in 2017, Amazon accounted for $7.14 million of $13 million transactions on Black Friday, and $5.64 million of the $12.5 million orders placed on Thanksgiving Day.
“Thanksgiving, Black Friday and Cyber Monday all broke records in 2017 and records will continue to be broken by Amazon as ecommerce grows,” Pat Petriello, Head of Marketplace at CPC Strategy said in an interview last year.
We also gathered data on CPC Strategy clients that we managed between 2016 and 2017. The following data starts 2 weeks before Cyber Monday and ending on Cyber Monday (aka 11/14/2016 – 11/28/2016 vs. 11/13/2017 – 11/27/2017).
Here’s what we found:
Shortly after Cyber Monday, we spoke with our own Amazon Experts to get their take on how the holiday weekend panned out.
Here’s a couple hot takes from Q4 2017 worth revisiting:
- Sellers who refused to discount – suffered.
A common trend we noticed (especially among Luxury Beauty brands) is that most of the sellers who did not offer a discount during the holiday weekend suffered from low sales & high spend.
“As a consumer, if I was looking for a new perfume, I would probably click on the ad to see if there was a deal. But if that particular brand wasn’t offering any special Black Friday or Cyber Monday promotions, I would probably keep looking.”
– Nancy-Lee McLaughlin, Manager, Marketplace Channel at CPC Strategy
- Inventory issues were detrimental to sales.
Unfortunately, another trend we noticed (that we see almost every year) is sellers hurt by inventory stockouts.
What a lot of sellers and vendors don’t realize is that although they are operating through FBA, Amazon in general can take a lot longer to process your inventory (compared to say, Target) because you may have to individually label all of your items.
So even as a vendor, if you hit a huge spike (in Product Orders) and it’s bigger than expected on a busy shopping day, you might stock out and not be able to get those shipments into FBA quickly enough to satisfy demand.
“The truth is, even if you do all your advertising efforts up front including Enhance Brand Content, building out a granular list of keywords, and running FBA – if you stock out on high volume shopping days you have essentially devalued all of your investment. I would view this as an area that a lot of businesses still get wrong,” Petriello said.
5 Tips for a Successful Amazon Ad Campaign in Q4 2018
Today, brands are selling more than ever before on Amazon – but to be a competitor in the space you have to know who you are up against and be prepared to engage in sophisticated advertising tactics to stay profitable.
To help sellers prepare, we’ve created the essential Q4 prep checklist for Amazon advertisers who want to capitalize on the channel throughout the holiday shopping season:
1. Allow Your Amazon Prime Day Data To Be Your Guide
So it should come as no surprise that Amazon Prime members recently enjoyed the biggest global shopping event in Amazon history.
According to Amazon’s official press release, small and medium-sized businesses worldwide have exceeded more than $1 billion in sales on Amazon.
In short – Prime Day is a big deal and advertisers should be leveraging their Prime Day data to inform the Q4 advertising strategy across all products, campaigns, specific keywords, and ad groups.
It’s time to stop guessing and start making strategic decisions based on your Amazon Prime Day performance.
Here’s a few ways you can take action:
- Analyze strong (and weak) performance across products, campaigns, keywords, and more.
- Identify return products & analyze negative feedback.
- Optimize your product copy / images.
2. Get Your Inventory Plan Ready
Post Prime Day is also a good time to figure out how effective your inventory launch process is and if it needs refinement or sophistication. Running out of stock prior to the peak holiday season, especially for an extended period of time, can have a devastating impact on your organic rank
A couple things you can do include:
- Take the time to formulate a Q4 strategy that incorporates promotional strategies and forecasts sales projections.
- Ensure you have proper inventory coverage for all of Q4 and January of Q1.
3. Invest in Amazon Creative Content
It is also critical to make sure the images, copy, and reviews that live on your detail pages are fully optimized and that you are leveraging all of the tools Amazon offers you in the form of video, EBC or A+ to help give the customer the confidence to click that “add to cart” button.
We worked with WHOOSH to modify the product description fields and build out custom creative including their brand story, enhanced images and text placements.
As a result, only 30 days after we implemented EBC on the following ASIN, they saw a 427% increase in detail page conversion rate.
The main takeaway here is – the more visually appealing your detail pages are, the higher your chances of standing out from competition and increasing your conversion rate becomes.
To get started, here’s a list of Amazon Creative Content opportunities to explore:
4. Drive Off-Amazon traffic to Your Amazon Store
Speaking of creative, there’s nothing more buzzworthy than Amazon’s latest Store program.
If you don’t already know, “Amazon Stores” is a free self-service product that allows brand owners to design and create multipage stores to showcase their brands, products and value proposition on Amazon.
With recent improvements to Amazon Stores – it’s now possible to effectively track how well driving off-Amazon traffic (from Facebook or Google) to Amazon performs.
Although 49% of shoppers start their search on Amazon, there’s no reason you shouldn’t be able to reach the other 51% of your customers when they are not searching on Amazon.
Driving off-Amazon traffic to your Amazon Store is one way to do just that.
To learn more about how to integrate this strategy into your Q4 planning, check out our recent post: “Why You Should Be Driving Off-Amazon Traffic To Your Amazon Store”
5. Use Technology for Sponsored Products Management
Although Sponsored Products is one of the most powerful tools for driving discoverability and incremental sales for Amazon sellers, with so many levers to pull it can be difficult for sellers to know where to start.
One opportunity you may want to explore prior to Q4 is the implementation of Sponsored Products Programmatic Technology.
Amazon CAPx is designed to equip professional third-party sellers with the technology to implement ongoing Sponsored Products optimization and Marketplace sales growth.
To learn more about how technology can improve your Sponsored Products’ management check out: “Why Programmatic Technology Is Necessary for Amazon Sponsored Products Management”
Lastly, make sure to test your ad copy, bids and keywords. You want to flesh out top performing targeting and content so you can maximize your click and conversion potential when it really counts during the holidays.This will also help mitigate the risk of lost opportunity when it matters the most for a lot of product categories.
For more tips on how to prep for Q4 Amazon advertising, email [email protected]