Amazon Holiday Performance Recap & Overall Outlook for 2022

Feb 8, 2022 12:00 PM1:00 PM EST

Request The Full Recording

Key Discussion Takeaways

What did last year’s holiday season look like for eCommerce brands? How can you use that data to prepare for obstacles and growth opportunities in 2022?

Brands in every category are still seeing remnants of supply chain issues, eCommerce hiring difficulties, and a rising cost of goods from the effects of the pandemic. However, there are strategies to help your brand optimize advertising campaigns while maintaining your budget for the year. From live streaming and shoppable video to new display capabilities and fulfillment models, 2022 has a lot in store for the eCommerce world.

In this virtual event, Aaron Conant is joined by Nicole Reich, Co-founder and VP of Sales and Marketing at Retail Bloom, and Ben Ryan Schwartz, Director of Retail Partnerships at Pacvue. Together, they analyze the data from Amazon’s Q4 advertising results, look forward to 2022 campaigns, and share their top campaign recommendations for your unique brand.

Here’s a glimpse of what you’ll learn:


  • Ben Ryan Schwartz analyzes data from the 2021 holiday season
  • Ad spend trends across various marketplaces
  • What potential obstacles and new opportunities are on the horizon for 2022?
  • Current advertising goals for eCommerce brands selling on Amazon
  • Nicole Reich discusses different campaign and advertising strategies for your unique brand
  • Nicole breaks down budgeting techniques for a more profitable brand
  • The difference between DSP and Display
  • Nicole shares specific examples of Amazon display campaigns
  • How to optimize advertising efforts for out of stock products
Request The Full Recording

Event Partners

Blue Wheel (Formerly Retail Bloom)

Retail Bloom recently merged with Blue Wheel to form one of the leading Omni-Channel Digital Commerce Agencies, with over $1 Billion under management across its clients.

Connect with Blue Wheel (Formerly Retail Bloom)

Guest Speakers

Nicole Reich LinkedIn

VP of Sales & Marketing at Blue Wheel (Formerly Retail Bloom)

Nicole Reich is the Chief Growth Officer at Blue Wheel, which merged with Retail Bloom to deliver end-to-end DTC, eCommerce, and marketplace solutions. Nicole strives to guide eCommerce success by working closely with manufacturers and partners and offering a full-service array of marketing solutions.

Aaron Conant LinkedIn

Co-Founder & Managing Director at BWG Connect

Aaron Conant is Co-Founder and Chief Digital Strategist at BWG Connect, a networking and knowledge sharing group of thousands of brands who collectively grow their digital knowledge base and collaborate on partner selection. Speaking 1x1 with over 1200 brands a year and hosting over 250 in-person and virtual events, he has a real time pulse on the newest trends, strategies and partners shaping growth in the digital space.

Ben Ryan Schwartz

Director of Retail Partnerships at Pacvue

Ben Ryan Schwartz is the Director of Retail Partnerships at Pacvue, an enterprise platform that allows brands, sellers, and agencies to manage their eCommerce advertising. In this role, Ben seeks out new channel partnership opportunities, manages existing partner relationships, and manages business development initiatives. Before joining Pacvue, he worked in senior management and strategist positions for companies including Deliverr Inc., Spreetail, and Orca Pacific.

Event Moderator

Nicole Reich LinkedIn

VP of Sales & Marketing at Blue Wheel (Formerly Retail Bloom)

Nicole Reich is the Chief Growth Officer at Blue Wheel, which merged with Retail Bloom to deliver end-to-end DTC, eCommerce, and marketplace solutions. Nicole strives to guide eCommerce success by working closely with manufacturers and partners and offering a full-service array of marketing solutions.

Aaron Conant LinkedIn

Co-Founder & Managing Director at BWG Connect

Aaron Conant is Co-Founder and Chief Digital Strategist at BWG Connect, a networking and knowledge sharing group of thousands of brands who collectively grow their digital knowledge base and collaborate on partner selection. Speaking 1x1 with over 1200 brands a year and hosting over 250 in-person and virtual events, he has a real time pulse on the newest trends, strategies and partners shaping growth in the digital space.

Ben Ryan Schwartz

Director of Retail Partnerships at Pacvue

Ben Ryan Schwartz is the Director of Retail Partnerships at Pacvue, an enterprise platform that allows brands, sellers, and agencies to manage their eCommerce advertising. In this role, Ben seeks out new channel partnership opportunities, manages existing partner relationships, and manages business development initiatives. Before joining Pacvue, he worked in senior management and strategist positions for companies including Deliverr Inc., Spreetail, and Orca Pacific.

Request the Full Recording

Please enter your information to request a copy of the post-event written summary or recording!

Need help with something else?

Aaron Conant

Co-Founder & Managing Director at BWG Connect

BWG Connect provides executive strategy & networking sessions that help brands from any industry with their overall business planning and execution.

Co-Founder & Managing Director Aaron Conant runs the group & connects with dozens of brand executives every week, always for free.

Schedule a free consultation call

Discussion Transcription

Aaron Conant 0:18

Happy Tuesday everybody, my name is Aaron Conant. I'm the Co-founder and managing director of BWG Connect. We're a networking and knowledge sharing group of 1000s of brands, who do exactly that we network and knowledge share together to stay on top of the newest trends, strategies, pain points, whatever it is that shaping digital as a whole. We'd like to talk to 30 to 40 brands every week, just to stay on top of those trends, we'd love to have a conversation with anybody on the line today. You know, we don't, we don't sell anything here at BWG Connect, we're just a networking group. But a lot of what we do with those conversations is we identify what those pain points are, and we like to stay on top of them. So we're not planning things more than like eight to 12 weeks out. But also we've we started off our in person small format roundtable dinner. So if you're looking to network, you're in a tier one, tier two city, don't hesitate to reach out, we'll put you on the list. You know, if your upcoming events like etail, or shoptalk or retail X or whatever it might be, shoot us a note as well, we're gonna put on a lot of events around those for sure. You know, a couple housekeeping items. As we get started here, we're starting three to four minutes after the hour, just so everybody knows we're trying to wrap up with at least three to four minutes to go in the hour as well. We want to give you plenty of time to go on your next meeting without being late, maybe even grab a cup of coffee along the way. The only thing is we want this to be as educational and informational as possible. So at any point in time, if you have a question, you can just drop it in the chat, you can drop it in the q&a. And you can always just email me any questions Aaron, And for that, I mean, that includes an hour after the call today, tomorrow, next week, whenever you have a question in the digital space, don't hesitate to reach out. We've got a lot of digital experts on on our site here and a lot of brands that help us figure all these different pain points out. But as I noted when I'm talking to, you know, 30 brands a week just trying to stay on top of those trends when the same ones come up. Oh, the same topics come up over and over again. That's where we get the topics for events. And that's where this one Amazon advertising, you know, a q4 recap in 2022 outlook. So a lot of people looking right now, as they wrapped up 2020 21 A lot of people have been asked a lot of questions around KPIs metrics, how much they spend, what was the row as you know, what else are they going to do this year? What do they want growth to look like? What's it gonna look like? How much is it going to cost? A lot of people are planning for that right now. And so we got some great friends, partners supporters, the network over at Retail Bloom, Nicole, Reich is on the line today to help answer some questions. And they've also brought in one of their close partners, Ben over at Pacvue to kind of, you know, run down what they're seeing. I know, they're a strategic partner for a lot of different people in the space a lot in the agency side as well, earlier in the year acquired last year acquired by sembly. So really cool things. And they've been a partner in the network for a while now as well. But Nicole, I'll kind of kick it over to you. If you want to do a brief intro on yourself Retail Bloom, that would be awesome. And then, you know, we'd kind of jump into this a little bit some good.

Nicole Reich 3:16

Awesome, thanks, Aaron. Just a background on Retail Bloom and myself. I'm Nicole Reich, co founder and VP of Sales and Marketing at Retail Bloom. This slide is the traditional one that we put in front of all the BWG webinars just an overview of what we do. So two biggest business models on the left side as it relates to marketplaces. So Amazon, Walmart, eBay, Amazon International, top portion, more traditional managed services model, we manage vendor Central account seller accounts, hybrid accounts. And then we also have a piece of our business that is exclusively for three P. So we're the brand doesn't want their own seller account, maybe they don't want to sell the Amazon anymore, but they still want to be a more traditional b2b model. That's where we would come in. And either model we are focusing on those blue checkmarks at the top. So brand protection services, making sure we know our brands have the right policies in place to monitor sellers to remove sellers to enforce that pricing if they need content management. So titles, bullets, SEO images, merges product launch strategies, that's where we would loop that in, we have some level of customer service in house, of course expansion. And then the number one thing that we're gonna be talking about today is Marketing and Advertising. And this is by far the quickest growing, I guess, tool in Amazon, and also our one of our biggest emphasis for 2022 as we relate to how we are expanding our team to support our brands goals for this year. Lastly, just reporting insights and analytics. And we got into that into our previous calls. But again, we want to focus today on advertising with our partner Pacvue on the right side? In case you're interested? We've had several, I guess, discussions around brand protection. And Aaron, I know you and I are planning on to have more. But if you're interested in getting some background on policies, how to implement those, how to enforce them, that is definitely another piece of our business that we are looking to continue to expand this year. So with that, Ben, I'll hand it over to you to introduce yourself and Pacvue.

Ben Ryan Schwartz 5:27

Great, thanks so much, Nicole. I appreciate that. Good morning, everyone. A brief intro of myself. My name is Ben Ryan Schwartz, and I'm the director of retail partnerships here at Pacvue. I'm really happy to join Retail Bloom and BWG this morning to review how the q4 and 2022 outlook for those of you unfamiliar with Pacvue, Pacvue is the enterprise platform for brands sellers and agencies to manage their eCommerce advertising by combining holistic performance data with recommended actions.

Aaron Conant 5:57

Awesome, just someone to jump in real quick, quick fun fact as well, Ben, the first in person networking dinner we did here at BWG, like three and a half, four years ago was actually with Pacvue. Pretty cool. But again, just a quick reminder to everybody you have questions along the way. Don't hesitate to drop into the chat the q&a or email them to me Aaron So anyways, yeah, Nicole, feel free to jump in.

Nicole Reich 6:23

Awesome. So then for an agenda today, we have three main topics. The first one is going to be presented mostly by Ben from Pacvue. just recap of q4 advertising results, what he's seeing at a macro level, what they've seen with their partners across all of the brands that they work with agencies. He'll get into those details. After that, I will come in with a bit more information on advertising campaign recommendations that we're doing for this year. So previously, in our other webinars, we talked about advertising more at a macro level as it relates to budget and, and forecasts. And what I wanted to do today was okay, we have our forecast, we have our budget, what do we do with it? How do we monitor it? what are best practices. So that is a big portion of what we're going to be presenting. And then lastly, audience questions. Aaron has already given us a couple of questions that he's had come up with all of you lately in the past couple of weeks. But as always, if you have additional questions, please put them in the chat. If we don't get to them during the deck. We'll get to them at the end through the audience questions. So with that, I will pass it back over to you Ben for the q4 results.

Ben Ryan Schwartz 7:38

Great, thanks so much, Nicole. So this year, we saw that spend increased over the Black Friday and Cyber Monday five day weekend, but not as drastically as in years past. Um, deal volume is lower than we'd seen previously. And discount amounts were definitely less in many categories. One factor of course that we knew coming into the holiday season was low inventory for many brands. That said for the first time ever ad spend actually declined on Cyber Monday down 8% For sponsored products and down 14% For sponsored brands. A lot of traffic this year shifted to Thanksgiving Day and Black Friday, which of course is reflected that people shopping earlier in November due to being worried about stock levels and getting products in time for the holiday. In addition, CPC has increased earlier in the lead into Black Friday than in previous years. Thanksgiving Day itself. So CPC is up 38% week over week for sponsored products. And this could ultimately signal that customers were shopping. We're shopping going into the holiday weekend. Next slide. So in many ways the overall story of q4 was definitely one of uncertain recovery. A consumer spending was up and it looked like we were we were going to have a somewhat normal q4. The return to in person a muted some of the growth of eCommerce but inventory shortages and stores still pushed people to shop online. Ad Spend is up across the board year over year for sponsored products. So spend was at 8% quarter over quarter and up 7% year over year. Sponsored brands spend was slightly down year over year. Sponsored brands spend is 14.9% quarter over quarter and roughly down by point 1% year over year. CPC is wore up across the board for both sponsored products and sponsored brands, sponsored products CPC 's were up 12.4% quarter over quarter and up 14.3% year over year sponsored brands CPCs were up 14.6% quarter over quarter and seven and a half percent year over year. Sponsored product row as was you know up by almost 1% quarter over quarter but was down 6.6% year over year and sponsored brand row as while it was up three and a half percent quarter over quarter it was down a little more than 10% year over year.

Nicole Reich 9:47

Question for you Ben. Do you have any insight into the sponsored brands having it not be up year over year like sponsored product ads? Do you have any insight into why that happened? I have some thoughts on what happened on our end?

Ben Ryan Schwartz 10:02

Yeah, I'd love to hear Yeah. What are your thoughts on it Nicole.

Nicole Reich 10:05

Yeah, so we really focused on sponsor brands a ton in q4, mostly because we saw the cost per click go down, which was great, meaning less people are using those ad units, right. And then it's less competitive. And honestly, just cheaper, right. So what we did is I think the one of the big things is that you have to obviously have brand registry to do sponsored brands. And I don't know if maybe what played into this was the sellers, either not getting access to it or losing brand registry. And maybe that's why they just went out of the space. Or as bigger brands come into this space, they have these pretty gigantic budgets, compared to maybe a smaller seller that just knows they can't compete in this space anymore. So that's why they took them out. I don't know that would have to play into it. But from our perspective, as long as our brands had stock, as long as they had buybacks, and there, they were positioned, while we actually invested, we made sponsored brands a bigger focus than we had in the past, especially as the Amazon stores take off. So I don't know if we particularly saw the same thing across our brands, but I could see as a whole why that might happen.

Ben Ryan Schwartz 11:15

Yeah, I was gonna say one of the things that, you know, we did see internally is if you think about some of these bigger these bigger CPG brands, for example, you know, I think what they were, what they did is they were kind of more strategic with their spend. And so again, part of this has to do with supply chain. And so there were probably certain times of the year where they decided to sit out. So again, that means that there was more inventory available at a lower CPC cost for some of these sellers who wanted to get in. But as you start getting closer to the holiday, which really was peak for some of these brands, they decided to heavily invest. And so obviously, that drove up costs, and then less available opportunities for smaller sellers. So I definitely think you tied into what you said that probably led to some of the results that we saw.

Nicole Reich 11:54

And also on top of that, there's other ad units now right sponsored display, which we're going to be focusing on in the back half of this of this deck, on their sponsored videos. So you know, if you have a limited budget, you can't spend it everywhere. Of course, everyone wants to do sponsored products, because those are the most of the most popular top of search, they typically convert the best anyways. So maybe as Amazon advertising relates, releases, more ad units, the budget of every brand, every seller is spread across those ad units versus just these two.

Ben Ryan Schwartz 12:26

Absolutely. And that kind of leads me into the next piece, which I also think that categories also kind of had a huge impact on some of the numbers that we saw. So like, for example, electronics at a lackluster 2022 primarily due to lack of inventory from supplies shortages, you know, as things recovered the past year, you know, electronics went on a steady running broke, you know, hitting an all time CDC high on Amazon, but $1.32 new toys and games followed similar trends you every year with one important exception. This is actually the first year where ad spend and CPC is actually slowed in December, compared to November. A lot of this of course has to do with consumers are doing their holiday shopping earlier. And nothing shows us better more than Toys and Games pulling up to of course, before Thanksgiving, a lot of that has to do with when you think about shopping for the holidays, specifically in Toys and Games, you want to make sure that you have those products in time for the holidays. So again, as you know, supply was severely limited, you know, people bought early. And so that's ultimately kind of why you saw a lot of that and spend come up sooner, so that way, those customers were targeted early, knowing that supply would probably run out as you got closer to the holiday. The other thing is a clothing category also saw some light with ad spend growing in q4, part of that, I think has to do with the world opening back up again and people you know, want to be able to go out and again, they're gonna want to get no more, you know, more apparel, that kind of in line with the seasons. You know, this is a category that was down from pre pandemic, but we do expect to see some modest increases, you know, each quarter and 2022.

Aaron Conant 13:59

And really, what what conversations should brands should digital marketers, you know, the Amazon teams me and have it have with the executive teams around, you know, ad spend is up, but not necessarily performance, right is that so many more people are in their, you know, you know, third parties, more brands are selling, so more ad dollars are flying are flowing into the system and therefore, you know, naturally the bid prices go up. Like, how should they be explaining this to executive teams around what's going to happen? Well, they Yeah, yeah, thanks. I spent 10% More my role as is gonna, you know, be in line with that grow. But that's not necessarily what I'm seeing here from the from the data you put up there.

Ben Ryan Schwartz 14:45

Yeah, I think from my perspective, and I'll kind of turn it over to Nicole. I think that you know, with the pandemic, you saw an infusion of sellers just flooding into the marketplace. You had this big pivot going on from brick and mortar to online. And so when you think about where Are you going to capture a majority of your customers, it's all going to be on Amazon. And so now you have limited ad space, you have a influx of cash coming into the advertising ecosystem. And so now you're all trying to compete for a bigger piece of the pie. But there's only so much room to go around. And so as a result of that, I think that impacted why we're seeing these trends, you know, from a spend perspective, and even a row as perspective and it's gonna vary, you know, at a category level. Awesome, love it, love it. Which is interesting, kind of to flip. Switching gears, I guess away from Amazon, which is you also have a plethora of other marketplaces. So for example, no Walmart has seen steady increase in performance investment and ad spend. Over the last couple years, they've also been trying to make a significant amount of investments not just in their eCommerce, business, but also kind of merging online as well as in store and then they've also kind of rapidly expanded their advertising efforts. You know, in q2 of 2021, Walmart merged their pickup and delivery site experience with eCommerce marketplace, which increased ad placement availability for brands but also improved relevancy of those ads. We here at Pacvue, saw CPCs decline and row has increased nearly 50%, quarter over quarter. And Walmart themselves also saw really strong q4 This year, after year of steadily rising in 2022, this past year definitely saw investment from Instacart pull back reflecting the fact that some consumers had returned to in store grocery shopping again, as a result of you know, things opening up. And as a result brands shifted budget to other channels. However, two factors led to a significant increase in ad spend for Instacart. And q4. One being the Omicron variant, which led some consumers back online, and increased coverage of retailers on Instacart. While Instacart will remain independent on macro trends, brands should be aware that Instacart still has one of the highest row as metrics among marketplaces at $4.25 in q4.

Nicole Reich 17:00

Hey, Ben, quick question on Instacart. Really quick, and this is just very, the focus here specifically on Instacart is grocery CPG. Right. Like you don't have any examples of other categories? Are those the two primary and do you see that continuing this year? Maybe? Yeah, good question. But

Ben Ryan Schwartz 17:22

yeah, I mean, I think, you know, when you think about Instacart, for the most part in grocery shopping, that's where they saw a lot of their their biggest expansion, and explosion throughout the holiday season, or not through that holiday season throughout the pandemic. You know, while they do, well, they do work with other retailers outside the CPG. Space CPG right now is where we're seeing a lot of it. So I don't really have any additional insights outside that category. I do think though, it's going to be really interesting, as you have some of these other grocery, like players come into the space, you've had, you know, some of these, you know, quick delivery services, who recently announced their own ad platform. So like, for example, DoorDash, recently announced they were getting into this space, who also have the quick delivery partner, or quick delivery company, go puff as well all trying to compete, you know, within this CPG grocery space. And again, that also is going to mean that they're going to try to fight for those ad dollars, you know, from the various brands. So we can go to the Yeah, so I guess last but not least, you know, this is just a CPC data chart where you can help you kind of benchmark your own performance versus the average and draw some conclusions. So like if your CPC is are up or down, way more or less than the average. This can provide insight into how competitive your category is, as I referenced earlier, and how much you need to spend. Spend so up for sponsored products down for sponsored brands quarter over quarter. So for us, you know, click through, you know, click through rate declined 10% For sponsored products, but increase for sponsored brands CPCs. You know, we're up across the board. So now around $1.36 For sponsored products and $1.57 per sponsored brands. Conversion was pretty flat for both sponsored products. But it was up for sponsored brands and row as mentioned earlier, was flat for sponsored products and down for sponsored brands. The biggest takeaway we saw in 2021 as a whole was that well, eCommerce certainly continued to grow, that growth was more muted than in 2022. Affected by by inflation supply chain real printing and COVID whiplash for Amazon advertising. Specifically, this meant a lot more volatility throughout the year in terms of what brands are spending. And as a result costs. The overall trend was one of growth and Brent should budget for 2022. Knowing that CPC is starting 10 to 15% higher than a year ago and will likely grow another 10 to 15% again this year.

Nicole Reich 19:45

Awesome. And then then I think that was this this slide or do you want to touch on this for your expectation? Sorry, I just want to be clear. Get me to go through these.

Ben Ryan Schwartz 19:54

No, I can do that. No, I'm okay. I'm good to go. And then yeah, no worries.

Nicole Reich 19:58

So just really quickly, we're going to shift gears a little bit, right? So we just went over what were the results of 2021, q4. And then what does this mean for 2022? So Ben is going to share I even just teased it the slide that he'll go over what he's seeing. And then right after that, Aaron will do a quick poll just to give the audience a chance to give us some background on what their expectations are for this year. And then I will get into Okay, what do we do with this budget? Right, what is the best way to use Amazon advertising to help you drive sales to help you hit your goals? So go ahead, Ben, and just the month ahead.

Ben Ryan Schwartz 20:33

Yeah, absolutely. As we experienced in 2021, several of the same obstacles will likely persist in 2022, including supply chain challenges inflation, as well as difficulty in hiring within the eCommerce space. That said, from an innovation and iteration perspective, there are definitely new opportunities in 2022 to be excited about one being shoppable video. So this integration is currently in beta on IMDb TV, allowing clickable shopping ads directly in the video that leads up to a detail page, we expect this to roll out to additional media properties, especially Twitch, which I believe actually was may have been recently announced in 2022. We also expect new display capabilities. So this will primarily be new audience targeting for Amazon DSP, in 2022. What's super exciting is being able to target based on Amazon's own properties such as shoppers of Whole Foods. And then last but not least, I kind of alluded to this previously, different fulfillment models. So the pressure is being driven from other retailers. So go pop DoorDash, targets curbside pickup, but we're already seeing Amazon make moves here to counter Amazon key and garage or Amazon key there in garage delivery is one unique advantage. But also expect Amazon to expand click and collect pickup options be a Whole Foods, and expanded brick and mortar footprint with its new clothing store opening in California later in 2022, for example. So those are just some of the key things that, you know, we're looking forward to in the months and as well as throughout 2022.

Nicole Reich 21:58

Awesome, and then the chart on the right, you want to just lastly, before I take it over to a quick poll. Can you see my screen? I hope?

Ben Ryan Schwartz 22:14

Yeah, I can. So again, obviously, in terms of you know, the retail spending sending into the retail ad spend trends you can see right here is that percentage of digital ad spend continues to steadily rise, you know, year over year, and then again, that percentage change, though, ultimately is going to be decreasing. So again, you know, as you work with your teams definitely evaluate where you're going to get the most bang for your buck. And you know, both from a customer acquisition perspective, but also what is in line with your business goals across your various channels, Amazon primarily probably being a predominant player in that space.

Nicole Reich 22:49

Awesome. And then perfect segue actually into what now right? So again, we've got some background on what's happening, it's getting more expensive. In particular, in certain campaigns, Amazon's constantly releasing new types of ad units, whether that be within DSP, or even the cost per click campaigns that you can run on site. So before I get into Okay, well, what do we do with it? I wanted to get an idea through a poll question. And Aaron, if you could please put on the screen that would be great to understand what your goals are. So as we looked at 2022, and just Amazon advertising, is your primary focus to accelerate to continue to drive top line growth, maybe regardless of profitability? Is it to sustain what you are doing in 2021? Is it hey, you know, we have increased costs across the board, and we've got to drive profitability, meaning every dollar I spend on Amazon better be more efficient than last year? Or are you in this sense of exploration, hey, we've got some new budget, we want to start testing campaigns that we haven't done previously. So if you could please go ahead, put your primary objective for 2022. And then we will show those results in a second.

Aaron Conant 24:06

It will just let it run here. If you can jump on there really quick. And then we can kind of publish this afterwards so everybody can see it. You know, it's you know, right now, as I'm seeing it, Ron, it's, you know, 14 out of 30 that are in there. So we got about half the people jumping in right now. Nearly half a accelerate is kind of their answer. Right. The next one up is profitability. And I think that's exactly what I'm seeing in conversation I'm having, which is, hey, we want to grow Amazon. But we want to make it profitable. I think it's probably that balance there. What's interesting, though, you know, it's just, I thought there'd be more and sustain because I just see a lot of brands that have, you know, Amazon is rapidly grown. It a lot of times it's margin diluted. They're trying to pay 10 per gross Why they, why they go after profitability. So maybe sustaining profitability go together. But I'm going to end the poll. Now, thanks to everybody who participated. And I'll share results as well. So I almost look at this and think profitability and sustain of the same thing. Because if you're not profitable, you're not trying to accelerate growth right now. So probably 50/50 there, and then the remainder exploration.

Nicole Reich 25:27

Great. So this slide that you can now see is I've used this a couple of times in previous webinars, but I've heard it to be very helpful as brands are working internally with other departments to answer the question of how much are we going to spend? And how are we going to spend it? And what should we expect from that spend, right. And the point I'm trying to make on this slide is that if there was a question around, Hey, what should be my ideal tacos, or total advertising cost of sales. So how much I spent and how much I see in sales on Amazon, it really depends on what your strategy is. So for the half of you that want to drive awareness, maybe you're focusing on DSP, for the other, most of the other half of you got one to drive profitability, you may need to go a little bit more down the funnel, because you know, you're going to see the return there a little bit easier. So either way, we want to make each campaign effective. But there's different campaigns for the purposes of what you were trying to drive on Amazon. So that's what I want to first start out with as just determine your ad spend and your goals based on your overall Amazon strategy, just not not just at the campaign level. And then the next thing I want to do is that there are again, a tonne of different campaigns, a different ways to use those campaigns to drive awareness to target products to target keywords. And I want to give you this kind of priority list of the way we organise our campaigns internally. And then hopefully, this is either a way that you can educate teams internally or use it for your own checklist. So simplifying it a little bit, you can see on the left targeting type. So what type of words are we using? What is the campaign type we're going to be using for those keywords. And then what is the reason that we're doing that? So this first section that you can see here is really mostly bottom funnel, right. So we have our non branded keywords or branded keywords. We're leveraging sponsored product auto campaigns, we're leveraging sponsored products, sponsored brands, you know, maybe even sponsored brand video, which is the SBB. And then we can even do some branded as it relates to sponsor display, which I'll get into in a second. But the reason for these is basically either coverage, how quickly you can do it, you know, whether it's an A a high a cost or a lower a cost. But in general, for this kind of bottom funnel, you should be able to create these campaigns fairly quickly. And for branded, they hit should have a better a cost, then as you go up for non branded terms. So that would be the summary of the first portion. And you want to make sure that you are completely optimising these campaigns or these targeting types before you move up the funnel. So then after that, you know, maybe you're doing sponsored brand and sponsored brand video for non branded terms. Again, as you go up, your target audience is going to be bigger, because it's people who now are looking for your keyword versus you specifically. So more volume, maybe a middle a cause. And then your auto campaigns, you know, are already covered. So that would be the second portion, then you move on to competitors against sponsored brand sponsored video, you can see you know, as you go up funnel, a cost gets a little bit higher, and then you the time it takes to run those campaigns are also a little bit more intense. And then lastly, this bottom section is what I would consider stage three, for more sophisticated brands who have been on the platform. They've been doing this for a couple of years, and now they want to keep growing, but still making it profitable. So that's where we get into a sponsor display for product placement retargeting, maybe there's some audience building through sponsored display. And then lastly, if you're ready for it, then you would go to DSP. So before I go into the next slide, which is an example of applying a budget to these type of ad types. Aaron, any other any questions for you? I'm not monitoring the chat. So I just want to make sure I don't miss anything.

Aaron Conant 29:35

Oh, just want to close it over email, which is around total percent of the budget as a whole. So how are you allocating This is it 10% of GMV? Is it 7% is a 15%. But people are still you know, is it search terms? You know, it costs more and more expensive. It's more more expensive to advertise here Are people just growing that from like seven to eight, nine to 10? To 11%? Where does it Where do you see it going? And maybe that's different for a product launch versus a, you know, an ongoing product. But that's right. I know what percent should they allocate?

Nicole Reich 30:13

Yep. So I would use this as maybe a starting benchmark. So depending on the category you're in, for example, a CPG. With a low V, that tacos goal or that ad spend, as it relates to your total sales is probably going to be higher than someone in the furniture credit category where they are selling $1,000 couch with the cost per click that is still only, you know, $1.50. So first thing is understand benchmarks in your category. And don't compare yourself to other categories, because it probably isn't a good assumption. But then start with that base, what is the minimum ad spend, I have to be spending on the platform to ensure that when people search for my brand, I am there and there is that the best customer experience from them, then I would start going up. So I have here, let's say for a furniture brand, maybe it's 3%, tacos, 3% ad spend, to your total sales at the bottom. And then as you go up, you're adding percentages based on your goals. So for example, in the furniture space, let's say that you want to go after a certain demographic that you know, as meets your financial status or education status, right? Well, that tacos goal is going to be much higher than just bidding on your brand. So it just it really depends on again, what your goals are, which is why we want to be really transparent and set expectations up front of how does your ad budget and your ad goals relate to your overall Amazon goals and sales? Because they are, it's super important that they connect with each other, instead of just saying, hey, I want to get a 1010 row ads, like those days are pretty much gone. You've got to be much more specific about what you're trying to accomplish and set KPIs to those goals. Does that help? Aaron?

Aaron Conant 32:04

100% cool. I think you get into the next level, which is we can't just check the box anymore. Right on Amazon. You can't just say, Oh, I have content. Oh, I have things uploaded. Oh, I've got 10% That again, oh, I'm you know, this the checkbox. And we're at the next level where you have to be very cognizant of, you know, not only how much you're spending and how much everybody around you spending. And then how are you dividing up? Isn't it? You know, it's more than just AMG and AMS now? Right?

Nicole Reich 32:31

So absolutely. So that would be this example, right? Where it's how do we take it to the next level? Well, this is your new check sheet. It's not just are we running advertising? Or are we not? It's what type of campaigns are we running? What type of keywords are we targeting? And then what are our goals based on that? So taking this one step farther as an example, let's say that, you know, one of our brands has a $700,000 AMS advertising budget? Well, what we do is then say, okay, what are your goals? For branded terms, we have some assumptions about what that cost is going to be by month. For competitors, we know that the cost is going to be not that the conversion isn't going to be as great, non branded, maybe it's even more competitive, and then it goes up from there. So in this very specific example, again, please don't take these as what your a cost should goal should be because it's very specific to what they're in and they're in a very, very competitive space, we actually found that running competitor campaigns drive a lower a cost than running generic keyword, non branded campaign. So after we were able to get some history, we said, Okay, we have the $700,000, we know that we want to allocate 300,000. To just branded, we know that's important, we have some assumptions about what that a cost is. We know on the flip side, we want to be running display campaigns, because those are gonna be driving awareness, new brand sales, well, those aren't going to have a one to one conversion based on what we know about this category. So that a cost is going to be much higher. But we know that these new customers from these ad units have probably never heard of the brand before or maybe we are moving them from a lower cost product to ours, which is a more premium brand. So the whole point of this is that again to that next level, understand what campaigns you want to run understand the keywords and then max out the bottom of the funnel before you move up. Especially if you want to drive profitability if your number one goal for Amazon is hey, I want to get my one day the account prop more profitable. I would immediately start with advertising and say okay, well where am I spending my my budget? Am I allocating too much a DSP? Am I completely efficient as it relates to those lower funnel? Right so we want to start at the bottom make it as profitable as possible before moving up. Aaron, is that helpful? Oh 100% Okay. 100% Okay, well just want to make sure this is resonating. Yeah, this is perfect. Yeah. Cool. And then this is more for internal purposes, right? So when when others in your company say, Hey, how are you doing this ad spend, because there's so many ad units coming out. It's, it's, if you don't have clarity, it's just kind of confusing, right? So we try to keep the narrative pretty simple to say, here's the budget we need, here's how we're going to spend it. And then by Month kind of creating this budget breakdown to show that our brands or to our brands have shown internally to say, this is our spend for branded gear is our spend for competitor. And all of those are going to have different returns. And then when someone maybe comes back and says, Well, I really want to be driving awareness, not profitability, then we say great, but know that you are going to have to increase your budget. And we're going to have to assume that that tacos or that ad spend as a percentage of our total sales also goes up to align with those those efforts. So hopefully, this is helpful to give you maybe some tools to use for internal efforts as you have a checklist of how you're creating your campaigns, and then also how you're building out that budget on a monthly basis.

So now we're going to get into something very, very specific, which is the difference between DSP and display. And this is one of the questions that I'm hearing come up a lot. Aaron's told me, he's got it. So I wanted to separate our more traditional ones, everyone gets sponsored products and sponsored brands, from these two different you know, display ads, and then the DSP console. So, um, I have this little comparison chart of display versus DSP. And what I would say high level on both of these different types is that DSP is measured as as a cost per 1000 impression. So think of Amazon DSP, like Google Display Network, its its purpose is not to drive conversion on day one to show you, here's what you spend. And here's the sales. That is not how that platform is measured. That's not how your KPIs for the most part should be set up. So if I go down the DSP side, on the right side, you are able to reach Amazon and other websites, you are targeting upper funnel. From an eligibility perspective, anyone can use DSP to advertise. So as an example, there are brands in the services space, if you think maybe like, I don't know, Disney, for example, maybe they wanted to promote their parks, right? They could use DSP to drive awareness and then direct that traffic either to their own website or wherever they want to have it happen. On the flip side, for the sponsor display, you can only advertise products that are actually being sold on Amazon. So that's a big differentiator. Think of Amazon DSP as a programmatic ad platform. Anyone can advertise, and then think of sponsor display as more upper funnel and an extension of both sponsored brand and sponsored product ads. Continuing on the right side, so from a budget perspective, you know, you're gonna need another 10 to 20 grand per month to run DSP. But your audiences are much more extensive, you can build them out, Amazon has their own dedicated audiences that you can use, but you have a lot of control over these programmatic ads to say, what is the type of creative I want to use, whether it's audio video, if it's on TV, if it's on, you know, on websites, that all can be done through DSP, but those goals are very much related to awareness, not conversion. On the flip side for display, again, cost per click structure, you can use, or you can drive traffic from other websites. But all of that goes back to Amazon, which I'll get into an examples in a second, your targeting a little bit more mid to upper funnel, obviously, again, the products have to be sold on Amazon. And the monthly budget, the biggest difference is that you only need $1, not that it would be very effective. But there is no monthly minimum as it relates to sponsor display budgets. And I'll get to why that might be important as you think about profitability or total goals in a second. The audiences are built by Amazon, so they tell you and you get to pick what you want. So it's not as custom and then it's the creative piece is much more limited as well. So they're going to give you kind of these modules or plug and play where you put in your own creative but you're limited to the module or the template that they give you. Um, and then you know, kind of in summary, like its display is pay per click, you know, DSP is more programmatic, which is more, I guess, Google Display Play network, right, the programmatic advertising that you would see for any, any company, not just brands that are sold on Amazon. So in summary, I bring this up because we're getting a lot of questions about Well, should I do DSP like DSP is this hot topic where everyone else is doing it so brands feel like they need to do it. That's not to say that it's not effective. But my reply to that would be first is that if you are not fully optimizing sponsor brand sponsor products sponsored display, and your own goal is to just drive Amazon business and not other platforms. I wouldn't necessarily say that DSP should be on your list of priorities. DSP is very effective for brand building for maybe CPG, or well established brands that have you know, an extra 150,000 that they want to drive upper funnel, but for the brands that come to me and don't even have their own Amazon advertising campaigns optimized, but their number one goal is to drive Amazon revenue, I usually direct them towards sponsor display, because you can do a lot of the same things in DSP, but in a more controlled, cheaper, effective environment.

Okay, so now I move next couple of slides are just on display any Aaron before I move on. Any other questions? I should dress up this point?

Aaron Conant 41:23

No, I think you're answering them all as we go. It's it's awesome. I think a lot of people want a copy of the deck.

Nicole Reich 41:29

Amazing. Okay, so display example. So forget DSP for just a second, I want to focus on the Amazon display campaign types that are within Amazon AMS or Amazon advertising console. So these are for the most part, if you're doing sponsored brands, and sponsored product ads, you can run these campaigns today, if you would like and they are continually continuously providing automated optimizations and new tools to leverage display. And I would say probably the most exciting thing I am looking forward to for 2022. So first thing is that, again, for Amazon display campaigns, the products have to be sold on Amazon. But you can drive traffic from to the product listings. Or you can also drive traffic from other websites back to Amazon. So on the right side is an example of you know, maybe you're going to, I don't know You were shopping, looking for running shoes. Now you're looking at, you know, some articles for the Super Bowl this weekend. And now this brand new you looked at on Amazon is retargeting you on ESPN. And when you click this, it's going to take you back to Amazon. So that can be done through these display campaigns. On the left side, it's even a little bit more I guess, known right where you're on this product listing looking for running shoes. You go off five days later, you think alright, I don't know which ones I'm still undecided between Nike and Adidas, you come back to this site. And then you have this retargeted ad. So that would be the example on the left. So traffic can be driven from either external websites or from Amazon, all of them driving that traffic towards your product detail pages or your Amazon store on Amazon. So in summary, the DSP budget should be separate from AMS with its own priorities and its own KPIs. Make sure that you are maxing out your AMS ad spend before investing in DSP. It's not one that you want to just test with. If you're running it today. And DSP is working well, great. But if you've got 30 things to do on your Amazon list, and you're not doing DSP today, ensure that Amazon AMS is optimized first. And that's the end. And if you're beyond sponsored Brandon sponsored product ads, but you're still interested in in some type of retargeting or more manual control with some flexibility, then Amazon display is definitely where you should should go. So the next couple of slides, I'm even breaking down what the sponsor display ads look like. So when you go into Amazon advertising and you set up a sponsored display campaign, you have two options. One of them is to target audiences. And one of them is to target product targeting. If you do product targeting, this is for only thank your competitors ASINs or retargeting purchases, they are on Amazon, they either purchase or again purpose, but you're driving them back to a very specific product, where audiences are a little bit more broad. So this is about the closest to DSP with a more limited budget. So I want to talk on product targeting first, which is a little bit more simple. So once we go into sponsored display, we go into product targeting, and then we have different categories and products that we can use. So do we want to focus on star rating Maybe we have a five star product, but all of our competitors have two stars. Well, then we would want to say anyone had that has less than three stars in this price range, for example, and poor reviews, that's where I want to show my products. Or maybe you know, you know, your Nike and want to go head to head versus Adidas, or whatever other brand name it might be, then you could use sponsored display for specific brands. So what does this look like? Well, on the right side this morning, I typed in men's basketball shoes, that was my keyword, I clicked on the product listing. And then you can see here two examples of display ads for all Akai, um, I will tell you, I don't work with it. We don't work with this brand. But, um, these campaigns are definitely display ads. And I'm sure they're probably running this ad based on price range, but maybe not necessarily on what the product actually is. I mean, you know, logically when I look at a sports shoe, and then I come down to see maybe a men's leather slipper, I don't know if that's completely correlated. But the thought process could be, hey, if you're buying a $90 basketball shoe, three months from now, you may want to buy $100 pair of slippers if that's the cost of the product. So just an example of what that would look like based on the way that you're building out the campaign.

And then from an audience's perspective, so now this is kind of upper funnel above sponsored brands above sponsor products above sponsor display in the sense of targeting that we just talked about. And now we're at audiences. So these are what these ads can look like, they're a little bit more creative. Here are some of the ads that are from our partners that you know, they give us assets or recreate some for them. And we are able to have a little bit more flexibility of what the customer looks like. So Amazon audiences is is what we would dive into right now. And within Amazon audiences, you have our remarketing, either by views or by purchases. So this bottom section here, people have looked at your products but didn't purchase. Now there's retargeting to drive them back to the product listing. The second one is they've built your your they bought your product before maybe a competitor product, and now you're trying to sell them again. So that's where you would use these types of audiences under sponsor display on the top half, now, it's even a little bit more upper upper funnel as it relates to audiences. So these are the audiences that Amazon creates for you. And as as a couple examples, you know, lifestyle, you can target interests, maybe life events, or maybe in market, they'll show you the potential reach if you were targeting that specific lifestyle or that type of audience. So just wanted to give you some examples here, this is one of the beauty brands that we work with, you know, when we look at even you know, that slide before of that budget that we have for display, this is how we're setting up those campaigns. So in that exact scenario, they really want to drive top line revenue, but they don't want to just spend it without any type of conversion. So this was a really good happy medium place where we could say, Okay, we're targeting an audience. They're shopping, they're probably your target customer, but may not be shopping for your brand or competitors. This is a way to target them. And maybe they don't buy today, but maybe they buy two weeks from now. So just wanted to give you some examples of sponsored display and, you know, maybe answer the question a little bit more of do I do display? Am I ready for DSP? You know, if I do display first, what are the capabilities? So hopefully, that's a good summary of what display is. And I will tell you even as Ben mentioned earlier, they are continuously adding more capabilities within Amazon advertising for display, like video. So I think we'll continue to see this side grow. Cool. All right. And then my last question that I got from Aaron that I want to make sure I touch on and we're seeing a lot is a little outside of display or just advertising as a whole. But how do I optimize my ad efforts when I know I'm going to have knockout products? So I want to just give a couple of four comments on this. And then Aaron, I'll pass it back to you. If there are any other questions. Cool. First thing I would say is plan. So you should know when your products are going to go out of stock. I know that in 2020, it was a little bit of all hands on deck, it was hard to plan for it. But now end of 2021 beginning of 2022 You should know what your sales forecast is, you should know what your budget is. And then you should also anticipate which products are going to go out of stock because when you know you can go out of stock when you know you're going to go out of stock, then you can plan effectively and and what are options. So the first thing that we've tried, kind of going back to q4 and we've worked with brands that say Hey, I'm gonna go out of stock, what do we do? Here's some different options. And you can choose what's best for the products that you're selling or for the budget that you have, or, again, overall goals. So, first thing I would suggest is probably start advertising all their products, you know, you're going to go out of stock on your best sellers, it is a great opportunity to just start upselling, maybe your 2.0 3.0 version, maybe you want to start driving traffic to the store instead of a certain product listing. So that would be kind of a no brainer, start to switch up your ad groups for the ASINs that you know are going to be in stock for that quarter. The second thing we tried is that, you know, we had this budget, sometimes it's a use it or lose it right where a brand has an allocation for ad spend. And they have to put it towards advertising no matter what. So in those situations, we said Alright, well, this is a great time to start testing sponsored display, because we know conversions already going to happen too much so that we're going to stock out. So this is the perfect time for us to start going a little bit more upper funnel, and switching our KPIs to maybe have a little bit higher, but tacos goal. And then even beyond that, maybe it's an opportunity to potentially start testing DSP, knowing that these ads take a little bit longer to convert. So by the time the customer is ready to shop and buy your brand, hopefully you're back in stock.

Another thing that we'd suggest is potentially increase increasing the price just slow down the demand. Probably not easily possible on the vendor central side, since Amazon is the one that sets the price. But on the seller side, if you have control over the pricing, maybe you start to increase that a little bit just to slow down the demand. The only answer I would have here and big cap so you don't have that you don't miss it is that you can only increase your price so much. And if you go beyond this kind of threshold that Amazon has in their back of their system, they're going to suppress your buy box. So just as an asterisk, if you're looking to slow down demand by increasing price, just make sure that you're still indexing for keywords. And then the other thing is, is if that ad budget can be flexible, maybe you would want to spend on other activities, right. So maybe you know, you're going to go out of stock and advertising just, you have, I don't know an extra 50 grand that that was supposed to be allocated towards products that are going to be going out of stock. Well, that would be a good time to maybe repurpose it for other activities on Amazon. Maybe you want to do Amazon vine, or coupons or content optimization projects where you're investing in video or imagery to further build out that retail ready that other product display ads. Or maybe it's a good time to say, Hey, guys, I actually don't think that this ad budget is going to be very effective. Given our inventory position, can we invest this back into brand protection, so that when I do have stock, I know I'm going to have Buy Box and I'm not going to have to worry about other third party sellers. So just some ideas of what to do if you know you're going to go out of stock. Hopefully that's helpful. Again, just another checklist you can use for your internal conversations and planning. So I'm one minute over Aaron

Aaron Conant 53:08

no, we're good. We said three to four minutes. So I get about a minute here. I do want to say thank you to everybody who dialed in, you know, thanks for the great questions that came in. You know, Nicole, Ben, thanks so much for for all your your support of the network as a whole. And again, you know, if anybody's looking for far more information if you need help in the Amazon space whatsoever, Nicole and the team at Retail Bloom, you know, one p three P hybrid advertising, whatever it is, they're helping a tonne of brands up brands out and they come highly recommended is worth a follow up conversation for sure. And you know, on that note, if you're looking for any other help in the digital space, whether it is Walmart or direct to consumer or drop shipping or international expansion or, you know, SEO or replatforming. Don't ever hesitate to reach out. We're a networking group here and love to connect you with other brands, or even the top recommended service providers in the area. If you're actually looking for somebody right away, we'll just send you a simple shortlist little for follow up email from us. I'd love to have a conversation with you as well. That's where we get the topics for these calls. But Nicole like key takeaways here in the last 30 seconds.

Nicole Reich 54:12

Key takeaways. Set expectations up front, right, be very specific of what you want to spend and what you think the results are going to be not just you know, gone are the days that we just throw ad spend out there and hope that it performs I guess.

Aaron Conant 54:27

Yeah, awesome. We just one last question comes in. Does Retail Bloom offer just brand protection solutions?

Niclole Reich 54:34


Aaron Conant 54:35

Yes. Okay, awesome.So more than happy if you're just looking for those as well. You know, 100% we're setting up some time with Nicole and the team. You know, and with that, I think we're gonna wrap it up. Look for a follow up email from us. Love to have a conversation with you here at BWG Connect. Hope everybody has a fantastic Tuesday. Have a great rest of the week. Everybody, take care, stay safe and look forward to having you in a future event. Thanks again, Nicole. It's been alright everybody. Take care now.

Read More
Read Less

What is BWG Connect?

BWG Connect provides executive strategy & networking sessions that help brands from any industry with their overall business planning and execution. BWG has built an exclusive network of 125,000+ senior professionals and hosts over 2,000 virtual and in-person networking events on an annual basis.
envelopephone-handsetcrossmenu linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram