Earlier this week I was fortunate to speak on behalf of Direct Agents at Digiday’s Amazon Strategies Virtual Forum alongside Shareen Pathak, Managing Director at Digiday Media. In the fireside chat, we discussed common Amazon questions and best practices companies should be aware of.
Here are my key takeaways:
Should brands be on Amazon?
It is extremely hard for brands to ignore being on Amazon with over 50% of online shoppers today starting their product search on Amazon. But more importantly, brands should realize that Amazon is evermore becoming a brand destination and what is marketing if not the art of chasing and communicating to relevant “eyeballs”. Amazon has those eyeballs in mass and most are in a state of consideration or purchase. They also realize the need to support and help build brands on their platform and have been hard at work developing brand messaging tools such as the Storefront, A+ content, Amazon Posts, and Video-In-Search ads.
A brand has the choice to either take control of their brand image and messaging on Amazon or to leave it to 3rd party sellers to fill the void in a disjointed manner. At the end of the day your customers, new and current, are also on Amazon and simply prefer that shopping channel. Can you afford to not be there for them?
How have CPCs fared during this time?
We saw a peak in CPC’s in the middle of March but as ROAS also dipped during that time, likely due to long delivery times, CPC’s also began to trend lower as we headed into April. Near the end of March/early April is when we saw most ads being Fulfilled by Merchant and the least we had ever seen being Shipped and Sold by Amazon – as inventory levels were low and ship times were long. Now moving into the second half of April and with sellers replenishing their inventory with Amazon, we are seeing ads shifting back to 1P sellers (Shipped and Sold by Amazon). In our sample set, ads with products Shipped and Sold by Amazon have increased 142%, FBA has decreased 60% and FBM has increased 27% since the end of March.
From a CPC perspective, CPC’s have increased slightly again since bottoming out at the end of March. ROAS has also increased as consumers start spending in more and more non-essential categories including clothing and apparel, toys and games, fitness, and beauty and wellness. Decreased shipped times across these categories have also been a contributing factor.
Takeaways
- Amazon is a great platform as consumers continue to start their product search on the site, but just having your product listed isn’t enough. Marketers should take advantage of the platform and work alongside it to communicate directly with their customers.
- More and more products continue to be sold on Amazon whether it be directly from the brand or a third-party seller. Selling directly on Amazon allows for a brand to control its brand image and narrative
- As Amazon replenishes its inventories, CPC has begun to increase since hitting a low at the end of March along with ROAS as consumers begin to see shorter shipping times and an increase in the availability of non-essential goods.
— Daniel Owen, EVP at Direct Agents
If you have any questions – or would like to learn more, please reach out to [email protected]