3 Secrets Behind Our Holiday Amazon Ad Strategy
Amazon reported that this year’s Cyber Monday was the biggest shopping day in its 24-year history. With Amazon sales reaching an all-time-high performance, advertising spend followed suit. Retailers directed nearly as much of their ad spend to Amazon as Facebook, reporting intent to spend 15% of their ad budget on Amazon and 18% on Facebook.
Brands certainly felt the pressure to take advantage of increased holiday shopping traffic. However, scaling spend to capture more traffic proves especially challenging with the saturation of advertisers all battling for customers during these selected days, which also drives up CPCs.
For our portfolio of Amazon clients, as we scaled spend, we were able to grow Amazon ROAS by 10% on average, alongside a 39% increase in revenue.
How did we do this? In addition to having the right granular campaign and account structure to maximize ROAS at the keyword-level, we executed a playbook that incorporated sophisticated YoY data analysis to plan spend, a keyword strategy to reduce CPCs, and deep coordination with our clients to manage inventory issues. Rise was able to avoid three of the pitfalls that brands without proper planning fell victim to:
1.) Insufficient YoY Amazon Performance Analysis, Driving Misallocated Spend Flighting
Because we store our Amazon clients’ data daily using our proprietary platform Connex, we are able to perform more sophisticated YoY analysis to predict top performing days. Some retailers make the mistake of assuming that the top performing days are always isolated to Black Friday and Cyber Monday. One of our clients struggled to scale Amazon performance in 2017 by misallocating spend and over-investing in Black Friday and Cyber Monday only. Using YoY analysis and shipped COGs data, we discovered that sales and intent trends for this brand were actually stronger in the beginning of the month during the Thanksgiving “prep” period. By adjusting our flight strategy to match historic demand, YoY revenue increased 93% while ROAS grew 120%, all while spending the full month’s budget over a shortened period of time.
2.) Falling Victim to Inflated CPCs
In order to compete profitably during peak sales days, Rise researched well ahead of time to discover and build longer-tail keywords that would be less expensive than shorter broad match terms. Brands that overly rely on general, expensive keywords, may find that ROAS tanks during peak advertising days.
3.) Failing to Monitor and Prevent Stock Issues Before They Happen
While it’s impossible to perfectly predict when items will fall out of stock, there are steps brands can take to minimize the impact of inventory issues. Rise worked closely with our clients to understand expected inventory levels for biggest spending and top performing ASINs. We determined the anticipated impact of these items falling out of stock and any risks that would prevent us from achieving revenue goals. We then created and executed a tiered spend strategy of where to spend the next ad dollar if a specific top performer fell out of stock.
It’s no small feat to scale spend and achieve efficiency improvements on Amazon. Contact Rise today to learn how we can help scale your Amazon sales while improving ROAS.