However much we may wish that Christmas was coming early this year (is 2020 over yet?), brands selling on the world's largest e-commerce destination, Amazon, may be enjoying the riches of the Holiday shopping season a little early. Amazon's wildly popular Prime Day, a week-long (or longer) promotional event in which Amazon Prime members are able to take advantage of huge savings on products in every category, was rescheduled from mid-July to mid-October due to the ongoing COVID-19 pandemic.
Amazon moving their behemoth sales event within a snowball's throw of this most critical of shopping seasons brings the very real possibility that they're going to steal some of its thunder - and critical revenue, particularly from the traditional commercial events of Black Friday and Cyber Monday.
To understand why this is going to have such an impact, consider that consumer brands make 20% or more of their total annual sales in just 30 days between mid-November and mid-December. In a year besieged by a global health pandemic, this number is very likely to go up, with 47% of US consumers reporting that they're planning on doing more of their Holiday shopping online. By some estimates, brands expect 2x of their revenue to come through e-commerce channels vs. retail this year.
Now consider that 33% of consumers are planning on shopping during this year's Amazon event vs. only 25% on Black Friday and 16% Cyber Monday (Coresight Research, 2020). This makes Prime Day a major e-commerce force to be reckoned with - and one that is likely going to have a notable impact on brands and their digital marketing activities. According to retail expert Kiri Masters, "brands who push forward and invest in Prime Day are likely to see a good return - especially if their competitors are sitting this one out."
Advertisers looking to tap into Amazon's highly successful event (and overall dominance throughout this shopping season) may want to better understand how to navigate the "black box" of Amazon's analytics and leverage strategies to most effectively support sales initiatives on the platform.
Below are three sets of best practices and insights to help inform your Amazon advertising efforts this Holiday season.
Amazon has historically been considered a "black box" by marketers due to challenges in knowing what, if any, impact advertising has on sales (and, importantly, at what cost). The only solution has been to invest in Amazon's own advertising solutions. However, Amazon recently announced that it's offering a new beta version of its Amazon Attribution tool for all brands to use across both Vendor Central and Seller Central accounts.
Amazon Attribution allows sellers to track the performance of several platform metrics, including detailed page views (aka, sessions), cart additions, and conversions across multiple media sources, including "external" social media and display advertising. This represents a real shift away from the much-maligned "black box" model, giving brands at least some level of awareness about how external traffic-driving efforts influence sales.This, in turn, means that brands can be more comfortable sending traffic to their Amazon stores.
While this is good news for advertisers, there are some limitations with Amazon Attribution that are worth mentioning. For instance, the system only offers a last-touch model, meaning if a user arrives on an Amazon product page after clicking on an ad, doesn't buy within the session, but comes back later to purchase, there's no way of tying that conversion back to the originating paid media effort.
Another drawback is that UTM tracking is not supported, so even with attributable conversions, Amazon Attribution is not able to track back to a specific creative or campaign. The best you can do is tie back to channels such as Facebook, Instagram, Twitter, Google AdWords, and so on.
There may also be occasions where you want to drive traffic to Amazon storefronts instead of product pages. In these cases, conversion tracking through Amazon Attribution will be lost between the storefront pages and the product pages where consumers ultimately convert. However, a useful workaround is to use Amazon storefront source tags. A source tag is a URL parameter that can be added to any Amazon store page URL when using it as a landing page for advertising campaigns. Once the source tag is added to the URL, Amazon will be able to identify external traffic from these sources and provide detailed metrics on the number of visits, units sold, sales revenue, etc.
In addition to the aforementioned limitations of Amazon Attribution in its current form, another challenge is evaluating the performance of these "external" media efforts with "internal" ones run with Amazon Advertising solutions - and optimizing plans accordingly. "Internal" Amazon Advertising campaigns give you a whole lot more in terms of data and insights. However, how do you reconcile this data with the more limited data you get from Amazon Attribution for external media campaigns, and how do you decide which is delivering more value?
One workaround is to optimize for detailed page views (DPV) on Amazon. This is the lowest-level metric that is universal for all media channels - internal and external sources - and is roughly equivalent to sessions on brand sites. With this metric, you can compare the effectiveness of all channels in generating page sessions. So if you see that traffic from Facebook is bouncing more than traffic from Amazon search ads, you may decide to shift more budget into search. However, if those search ads carry a CPC that's 50% higher than Facebook, then Facebook might be the more logical choice in terms of minimizing the cost per DPV.
With that said, another consideration is how traffic-driving affects the overall performance of your brand's Amazon stores. Amazon takes into account a number of factors when calculating page rankings in search results, and other internal traffic-driving functions. One of the most important of these factors is your page's conversion rate. The higher the conversion rate, the more favorable your page's ranking, and the more organic traffic you'll receive. However, if you drive too much "unqualified" traffic to Amazon, and it fails to convert, Amazon will reduce your page's ranking, and it will be more difficult, and costly, to generate traffic - and sales.
To avoid this scenario, it's important to not drive too much traffic that you don't know will convert. Instead, take a measured approach to scaling campaigns by evaluating (to the best of your ability) sales performance from various sources and campaigns. Give yourself time to experiment with different channels, campaigns, targeting, and creatives, seeing if any of them are better than others at generating sales. Once you have a good idea as to which are most effective, then gradually scale up the size and budget of your campaigns, always keeping an eye on your page's conversion rate. If you take a measured approach and drive well-qualified traffic, you may even be able to improve your brand's position on Amazon.
Most e-commerce advertisers consider remarketing to be a valuable tool for delivering significantly higher conversion rates among consumers who have already exhibited interest. According to Adobe, remarketing audiences are 70% more likely to convert than first-touch audiences.
While retargeting is available to advertisers taking advantage of Amazon Advertising offerings, there unfortunately is no direct remarketing solution for other advertising channels driving to Amazon. However, there's a surprisingly effective workaround.
This involves using a link tracking solution such as RocketLink. These solutions work by essentially routing users through an interstitial page where they're tagged with pixels from one or more advertising platforms before being directed to Amazon (or any other destination). This then allows you to retarget them on those platforms, treating their click to your brand's Amazon store like a click to the brand site. Of course, you could also set this kind of solution up yourself, without a third-party tool.
Another good idea is including targeting segments in Facebook, Google DV360, and other programmatic platforms composed of frequent Amazon shoppers who might be more receptive to ads marked with an "available at Amazon" badge on the creatives, and more likely to convert given their habitual use of Amazon. Amazon-centric targeting could include keywords, followers/look-alikes, and behavioral segments around Amazon Prime members, Amazon Video subscribers, Prime Day shoppers, and Alexa users.
You can also create custom and lookalike audiences from your current Amazon customer list. Facebook and Google ads both allow you to upload your customer list in their platforms to create a custom audience. Simply download the order details from your Amazon store, upload into the ad platforms, and you'll be able to create a lookalike audience with similar behaviors as your current customers and to target them in your campaign.
There you have it! Hopefully these tips and best practices will come in handy for your advertising efforts this Prime Day, and beyond.
