This webinar covers the trends that wrapped up an action-packed 2020 and looks ahead to 2021 eCommerce marketing strategy.
Summary
The final quarter of 2020—with its package delays, COVID-19 restrictions, and big shopping events—capped an action-packed year for online brands and shoppers. This webinar covers the eCommerce marketing 2020 trends and performance metrics to help you optimize your eCommerce marketing strategy into the new year.
Key Takeaways
- Prime Day vs. Cyber 5: October’s Prime Day kicked off holiday shopping and drove demand. Many brands doubled down on Prime Day to avoid Q4 uncertainty, leading to a somewhat lackluster Cyber 5.
- Normalized shopping behavior: Customers returned to more typical shopping habits in Q4 and made fewer searches related to the pandemic.
- Ad spend growth: Advertising spend for eCommerce marketing in 2020 hit an all-time high in Q4, resulting in record CPCs across the board.
- Pet spending boom: The pet category—previously a struggling performer online—had the highest CPC growth, as the consumer shopping experience for buying pet food and supplies online has lead to an eCommerce boom for the category.
- Flat 2021 budgets: Given lingering uncertainty about the pandemic, some brands are keeping 2021 budgets flat for their eCommerce marketing strategy, while others are already leaning into continued growth.
Transcript
Melissa Burdick
OK. Hello, everyone, and welcome to our Q4 CPC report. Excited to get started and talk to you about results from last quarter. Today, we’re going to talk about what’s new and some news. We’re gonna talk about key takeaways from the quarter results and insights and then do a Q&A. And I am excited to have Kiri Masters here with us today, as we did last quarter, Kiri is the founder of Bobsled Marketing, which is an agency with years of proven experience across Amazon, Wal-Mart and Instacart retail media, helping brands grow in this space. So thanks for being here Kiri.
Kiri Masters
Thanks, Melissa.
Melissa Burdick
All right, so let’s get going with the news. So eMarketer puts out kind of a forecast and this year they didn’t just adjust their forecast once, but three times. After each earnings release, essentially, they kept increasing their estimates of Amazon advertising revenue. So they estimate 2020 ending at 14.5 billion. Initially, they started at 12.75 billion when the year first started. So certainly, they didn’t expect the significant growth that was there. But you can kind of see by their estimates that they had really positive thinking around Amazon advertising. And then Cowen just came out with a great report on Amazon’s ad business. This was based on a survey of about 50 large ad agencies. And, of course, you always have to take surveys with a grain of salt, but directionally thinking. And this question was which ad platform outside of Google and Facebook could emerge as a meaningful part of your Digital Ad Spend? And this just shows how much mindshare Amazon has with the big holding agencies. And then they ask this question, where are the ad dollars your client spends with Amazon being allocated from? And you can see here that TV is kind of the big loser.
Kiri Masters
Ouch.
Melissa Burdick
You see this coming from Google and Facebook. And the kind of other one is a little bit interesting to me. So I’m not sure what makes up this other digital platforms bucket here. But we know Google and Facebook are, you know, the top two with what these others are. So I’m not sure, I’ll have to check that out and see if there’s an explanation of that from the survey. Definitely something to deep dive into, is that Cowen survey. All right, so this is one of my favorite charts that we put together here at Pacvue, and this kind of shows you the daily impression volume across, you know, starting from Prime Day last year. Of course, as we know, Prime Day is usually a July event. And Kiri any predictions if you think that Amazon will move Prime Day from October back to July this year in 2020?
Kiri Masters
Well, that is a really good question. On one hand, I like to call it a Prime Day in summer, an oasis during the summer doldrums for a lot of brands and Amazon in particular, because it really perks up that slow period in the middle of the year. But this Prime Day, closer to Cyber 5 last year was a massive hit for Amazon. I mean, hit in a good way. So, you know, they could make a really strong case. I mean this chart demonstrates it perfectly. That moving Prime Day and competing with that traditional buying period could be a good move for this year as well.
Melissa Burdick
My prediction is going to be that they move Prime Day back to July, as you said. I mean, the whole reason why Prime Day started as the 20th anniversary of Amazon, and they kind of created an event for themselves in July, which is traditionally just a down month in general. So that was a Q3, you know, ability to kind of get gross sales in Q3. So I predict that they move it back to July. I think that things will you know, hopefully, most people have been vaccinated by then and things will be back to normal a bit by then. I think they’re going to need that push in July because things will be more back to normal and people will be going back to stores. So they’re going to need a reason for people to keep shopping. But I do think that in October they may I think almost instead of like the Cyber 5 weekend, I think they’re just going to push promotions up in leading times. So I think they’ll kind of have a lot of promotions during October, but they’re going to move Prime Day back, in my opinion. But really, Prime Day this year kicked off the holiday shopping. It pulled demand forward, which is what they’re trying to do. And then Cyber 5 is really a bit lackluster in comparison. So we’ll see it in some of our numbers. But that’s just an interesting one. All right, take it away with Pantry.
Kiri Masters
The landscape of Amazon’s various CPG buying platforms for customers and for the brands who sell on those platforms has been very confusing. A very confusing shopping experience, a very confusing experience for brands trying to allocate budgets between those three platforms, Fresh, Pantry, and Amazon.com. And it’s been a prediction for a while, that there’d be some consolidation, that I’m really happy to see this, to be honest. It’s going to make it a lot simpler for brands and customers alike to navigate all of the different buying options on Amazon. It really demonstrates also that Amazon’s really figured out the profitability issues in grocery. And so they’re able to migrate a lot of these items that were previously unprofitable on Amazon.com back to Amazon.com because they’ve just upgraded their logistics and ability to be profitable on these low ASP items. Shipaggedon and Returnaggedon… This was last year, Amazon was the best of the bad bunch amongst the shipping carriers and their ability to deliver orders to customers on time. So although a lot of brands face issues getting inventory to Amazon FC’s and inventory caps and things like that. Compared to UPS and FedEx, Amazon stood up really, really well. So I think we need to really take whatever they do in the logistics world with a lot of credibility. And Amazon telling customers just to keep an item could be a sign that this might be something that other retailers are going to follow with later on as well.
Melissa Burdick
Mm hmm. This Returnageddon, basically this huge explosion and people getting things shipped to them and now this whole thing around things are going to be returned. But I do think that it also shows the strength of Amazon’s technology because they have this A.I. driven algorithm to determine if it’s cheaper for you to just keep the item that it is to return it. And so this very sophisticated and complex system around determining this, that Amazon and Walmart are developing, further proves to the marketplace around their strength in this area that others are really going to have to, you know, look at how they’re going to treat.
Kiri Masters
Yeah, this is really deepening the moat as well. Like what other retailers can afford to do this, which of them have thatA.I., or none of them. People love when they don’t have to return items. New in Q4; sponsored brands, automated deal, call to action. So we’ve found for a long time that combining coupons and deals with sponsored placements have a really great impact on click through rate and conversion rate of those sponsored placements. And Amazon has obviously recognized that, too, and created a way to automatically highlight a deal in a sponsored brand ad placement. So this is really nice, we’re seeing a really great performance from this integrated call to action.
Melissa Burdick
Yeah, and this is just kind of a blow-up of that image. But essentially this is that 50 character text, “Save KitchenSmart appliances”. There’s a lot of rules around what you can say in this. And so that’s where right underneath that you’re able to pull in like the savings message and have some different things showcased in what you can say here. Plus adding in all these, you know, coupon deals.
Kiri Masters
All right, and what’s new in ads in Q4, this is changing a little bit because this was announced a couple of weeks ago, so technically Q1, but Amazon launching the Marketing Cloud in beta. And I think that there’ll be a lot more to come on this from us in commentary around how this is going to be what the use cases are here. But this is the next evolution in Amazon’s journey to compete with Facebook and Google, a fully integrated marketing cloud where brands and advertisers can ingest their D2C data, their customer lists, exports from social campaigns, and marry that up with Amazon first-party data to get an end-to-end view of customer life cycle. How different channels are working together, competing against each other, where people are transacting versus researching things like that. So this is a very sophisticated next step for Amazon in their advertising technology journey and really excited to see how brands are going to start using this technology to drive better investment in their advertising. Second point here is a new study from the Digital Shelf Institute (DSI) that vindicates a lot of what marketers imagined was happening, which is where you spend a dollar on a retail media platform like Amazon and sales in-store goes up. So this report found that on average, a dollar spent on retail media campaigns on one actually results in $7 to $11 of incremental sales in-store. So that was a really reassuring finding that marketers had suspected for a while. A couple of new updates in international markets; Sponsored ads and Stores launch in Brazil, Amazon stepping up their ad capabilities in international markets, which is great to see, and Sponsored Display audiences launched in the US market. And this is a continuation of a theme that we’ve seen for quite a while where some of these DSP first-party data targeting options are being brought from the DSP over to the PPC side of things as well. So more sophisticated targeting and more levers that advertisers can pull on Amazon.
Melissa Burdick
Mm hmm. This ad type, the Sponsored Display ad type is definitely a huge focus for Amazon. So there’s been a big push around this.
Melissa Burdick
Yeah. Right. Yeah, and just a quick one. This shouldn’t come as a revelation to anyone, but at Bobsled, we found our best performing keywords. The clients in Q4 were around gift-related search terms. So “gifts”, “samplers”, “gift sets”, “gift baskets”, just say a PSA that don’t forget about gift-related keywords in Q4.
Melissa Burdick
Great. All right, so now we’re going to head into the results of this report. So our report is out today. You can go to our website and download it. You’ll get an email if you sign up for this webinar and receive our CBC report. But really, this is going to be kind of a teaser for what’s to come, that you’ll you’ll get more in our report. So key takeaways; we talked a little bit about this, but, you know, October Prime Day was a big winner, kind of kicked off this holiday shopping season. We do see, as Kiri just mentioned, a little bit of a return to more “normal” and giftable shopping behavior. We’ll see that in the search terms that I’ll show you in just a second. But there’s finally a little bit less pandemic shopping around face masks. And finally, people are getting into the holiday spirit helped with the kick off of Prime Day in October. And then we do see CBCs, cost per clicks and spend hit all-time highs. And then we’re going to do a little bit of a deep dive into the Pet Category, which I kind of find a fascinating category. I did a consulting project several years ago for a big CBG and really deep dive into the economics. And shipping dog food, heavy dog food across the Internet is really not profitable. So it’s a hard one to be in. But, you know, the pandemic really accelerated the shift to e-commerce for this category and such an increase in competition. So we’re going to take a little bit of a deep dive into that. So, as promised, here’s kind of a search term, top key searches on Amazon starting in July. So everything in yellow is kind of pandemic related around facemasks and Lysol and hand sanitizer. And so we see a lot of that happening. And then October, a lot less yellow. So a lot of people more focused on gift giving. And some of the big launches, like the PS5. Toilet paper does make a resurgence in November. So I don’t know if people who stocked up in March finally are out of toilet paper. But I mean, it’s still one of those things that is really hard to buy, lots of out of stock issues still. So that’s kind of fun that we finally get into the holiday spirit here. And then speaking about PS5. So PS5 really launched. That’s one of the big launches this year and gaming and people were already starting to shop for it in September, even though it launched later in November, I think.
Kiri Masters
Were they able to preorder on Amazon is that why?
Melissa Burdick
Honestly, I don’t know, but I’m guessing it probably was a pre-order. I don’t know. Probably someone in the audience will correct me on this one because they probably know better than I do. But it does show that customers are coming in looking for these things earlier than when they’re out. So just underscores the importance of investing ahead of key launches around advertising. And then air fryer was a big item for Prime Day. You can see that here in Q4 and it disappears in November and December. So a lot of people came in in October and bought this air fryer. I know I did. I bought the Ninja Foody 9-in-1 air fryer and everything else. And the reviews did say how much counter space it takes up and they were not lying. What about you, Kiri? Did you buy anything during Prime Day?
Kiri Masters
Yeah, I got my robo vacuum cleaner and my floors have never been cleaner. So good purchases there.
Melissa Burdick
I should have bought that. Maybe the Ninja Foody will be traded in. I do love it though, but it takes a lot of space. So a little bit of trivia. If you saw before just this, there’s a huge trend in LED lights as a search term on Amazon. So July was #17, August is #6, held that for September. So you can see it stayed in the top 20 throughout pretty much this year. Do you have any guesses as to what the LED light trend is?
Kiri Masters
It was going up before December so it can’t be for Christmas lights.
Melissa Burdick
No. All right. We’ll give the audience a little bit time to think about it. So my nine-year-old son came to me a few months ago and said, “Mom, can I get LED lights?” And I was like, OK. So this is one of the trends that I know you and I are really big into. And that is around this TikTok trend that really drove e-commerce, so people buying LED lights on Amazon. And so what it is, people are putting these LED lights around the corners of their room. And there’s a lot of TikToks on this. So if anyone has TikTok, definitely watch these. There’s a lot of driving to Amazon around buy your LED lights on Amazon. But I think one of the other things, too, is that all these kids are on Zoom, like mine, and they see all the other kids in their class with these LED lights around their ceiling. And I think it’s really cool. And so both the TikTok trend, they see it on Zoom and that has really driven this kind of craze. So if your kid is asking you for LED lights, you could check TikTok and learn a little bit more about it. But yeah, it’s kind of fun. I asked my team if they knew and they had some really funny answers that were incorrect. All right. So now we’re going to get into the fun data part. And like I said, this is really explained in our CBC report, but in general for this quarter. So spend was up. Click-through rates were down, although essentially really kind of flat quarter over quarter. CPCs were up, conversion rates were also up. But ROAS was a little bit split between the ad types at first sponsor products, although small increase and then down for sponsor brand ads. So Q4 is always a Super Bowl of sales and so spends accordingly. Spence hit an all-time high in Q4. The growth of spend on Sponsor Brand ads outpaced the spend on Sponsored Product ads. And then, you know, electronics really had a less impressive Q4 compared year over year, so they saw a much more muted increase in ad spend in December compared to 2019 and 2019 December ad spend in the Electronics Category was up 32% month over month. And in contrast, it was only up 1% month over month and 7 out of the top 10 electronics bestsellers coming out of Q4 were of course Amazon devices. And this slide kind of blows it up. So if you don’t follow Joe on Twitter his full name is on the bottom here, which I’m not going to try to pronounce, but he is a wealth of great information and knowledge. The marketplace pulse. But basically, he shows here that 31 of the 50 best selling items and electronics were Amazon devices and really showed that there were steep discounts from Amazon and then also just a lack of deals and the electronics category. So kind of interesting around that category. And then, of course, one of the big pandemic categories was Home & Kitchen. So we saw a huge Q4 ad push definitely helped be propelled by the pandemic. It saw one of the most dramatic increases in ad spend quarter over quarter, amongst all the categories, up 33% in Q4 and up 6% year over year. Kiri, so one of the things that you and I both know is that over the last, I don’t know, 3 plus years, Instant Pot has been big for prime day, big for Q4. Do you think that we’ve reached a level of saturation of the Instant Pot?
Kiri Masters
You’d think so either people are buying multiple Instant Pots now so they can make the desert and soup at the same time, or Instant Pot has done a really good job of updating models and bringing out new models so that there’s something to learn from that, which is you’re onto a good thing, give people a reason to keep buying, to keep upgrading to the next model. I think that that’s what they’re doing.
Melissa Burdick
Mm hmm. I definitely think air fryer gave them a run for their money this year though because that was kind of the big thing this year. It’ll be interesting to look at air fryer sales versus Instant Pot sales. All right, so the less dramatic in Q3, the Sponsor Product and Sponsored Brand ads saw a slight decline in click-through rate again in Q4, essentially flat really. You know, increased ad placements on pages combined with more automated creative solutions led to a little bit less impactful creative, is likely leading this decline. I think the creative conversation is something to really look at for brands. If you look at the Tech Category, there’s some really fun creatives that are interactive and really kind of grab your attention versus others that aren’t. So I think creative is going to play a big piece in click-through rates, things like that. And then CPCs hit an all-time high. So the peaks came in October and November for the mega Q4r Prime Day and Cyber 5 holiday events. And then we have the Toys & Games category. It’s essentially a flat category all year long until Q4. Q4 is the Super Bowl and then they start really spending and advertising. And we saw really the same same thing. 2019 and 2020, you see this kind of steep increase in ad spending. Here’sthe high CPCs in the Pet Category, I think out of all the categories, they had probably the highest CPC increase. And again, this is one where I’m going to do a little bit of a deep dive in the next three slides and talk to you about this category because I think it’s just fascinating what’s been happening on Amazon and e-commerce. So first, let’s talk about the pet industry going digital. So, you know 92% of sales were coming from brick and mortar in 2019. In 2020 that was 73% percent. So significant increase in e-com. And then the competition in the Pet Category is insane, so there’s 630 pet food brands selling on Amazon, a 71% increase in those pet food brands in the last seven years from2011 to 2018. So just a lot of new pet food brands coming online. And then in terms of CPC, so we talked about to bid on the word “dog food”, 495 brands have bid on the term “dog food” in 2020 and that cost per click was on average $22.85 which is high and an 85% year over year increase. So pretty significant.
Kiri Masters
I think it’s even more significant when you think about the fact that there’s a net increase in pet owners during a pandemic. Right. So lots more people have become pet owners, which would increase demand on Amazon, which should ordinarily drive down CPCs. So the fact that CPCs have gone up so much with increased demand from shoppers, it’s even more of a big story.
Melissa Burdick
Mm hmm. And actually, I am we are a family with a COVID puppy. So when COVID hit, we decided, what else are we going to get a pet? So we might as well get one now.
Kiri Masters
I was wondering why you did a deep dive into Pet.
Melissa Burdick
Close to the heart. Yeah, it is. It is a category that I think a lot of people probably have started investing in. We need one more thing in our lives. But she has brought a lot of joy, so that’s good. All right, take it away with conversion rates.
Kiri Masters
Yeah, so with Sponsored Product conversion rates, they hit an all-time high at 17% in November. Sponsored Brand conversion rates made up for a Q3 slump and is still well above 2009. Conversion rates for Sports & Outdoors after steady growth in 2019, Sports & Outdoors saw a sustained decrease in conversion rate in 2020 during the pandemic. And Q4, we finally started to see that normalize. And that was due to a lack of inventory, probably one of the most impacted categories with gyms being closed and people wanting to build out their home gyms, buying dumbbells and resistance bands and things like that. So by Q4, finally started to see CPCs come back up again due to that out-of-stock situation.
Melissa Burdick
It is crazy, this category. I mean, you cannot find dumbbells, barbells, nothing for so long. Finally, now I’m just now seeing this kind of come back. It’s still difficult to find inventory, but this has been so impacted and out-of-stock.
Kiri Masters
Cost per acquisition is getting more expensive again, although still slightly more efficient than in 2019 as we see some more normal shopping behavior return from the pandemic peak. Return on ad spend for Sponsored Brand ads continues to decline from the growth it had seen earlier in the year, with Q4 2020 down 6% in the quarter and down 11% year over year. And this reflects increased competition on Sponsored Brand ad placements. While in contrast, ROAS for Sponsored Product ads remained relatively flat in Q4. And finally, Beauty & Personal Care had been seeing a consistent decline in ROAS throughout 2020, and Q4 saw that trend level off, down only 7% quarter over quarter and 7% year over year.
Melissa Burdick
All right, so we’re going to head into what to look out for in the months ahead so you and I are going to share this. But one of the things that I put here was just the continued budget uncertainty. So as I’ve asked clients, you know, how are you thinking about 2021? How are you thinking about spending? There’s still so much uncertainty because we don’t know when a vaccine will completely roll out. And I think the brands that can be more fluid, that can look at ROI month to month and see what’s working and where the market is, they’re going to be more of the winners. So typical traditional big brands have this planning cycle where they’re locked in. The less that they can keep themselves locked in, the better it is going to be for them. The other thing that I’m really excited about is wie’ll be first to market with Amazon’s DSP, self-service product and offering. And so this is going to just further help the whole ecosystem. And this is our grand vision at Pacvue is one screen, the ability to see all retail media at one place. Amazon, Wal-Mart, Instacart, DSP as well, to see what’s working so you can get your DSP and your paid search all in one place and be able to do campaign management for both of these things all in Pacvue. So that’s something I think is going to be really exciting. Again, we kind of talked a little bit about the creative, but I think we should all kind of keep our eye on what’s happening with the creatives because that does have such an impact on what converts, what people click on.
Kiri Masters
The bar is being raised like, especially once we saw some Sponsored Brand video come out last year, that the stakes are getting higher and the brands who can be early on with those new creative placements see better results.
Melissa Burdick
Mm hmm. Yeah. So it’s just when you thought you got your product detail page and all your content, everything, you know, perfected, now you have to worry about creative for e-commerce.
Kiri Masters
Yup, video.
Melissa Burdick
And then you and I are both kind of big into this concept around the future of micro-influencers especially and how livestream complement to e-commerce. So I think that’s going to be a big trend in 2021. And then you have this thing around CPC inflation. Can youtalk a little bit about that?
Kiri Masters
Yeah. So our view is that CPCs will increase by 10 to 20% this year because there’s just so much more competition on Amazon. The secret’s out, not just amongst friends that sell there, but with non-endemic advertisers as well who want to get in front of Amazon shoppers. So I think there’s a good argument to be made either way. Amazon could open up more ad inventory, newer ad types, targeting options, and things like that. But it’s been less of a focus in 2020. But in 2019, there was a lot of talk about how so much of Amazon’s search real estate is taken up by ads and there’s a point of people starting to tune that out. So if we’re getting to that saturation point, then Amazon is not going to be able to open up more ad real estate and it’s going to create a supply problem. Another reason why I think CPCs are going to go up is the sophistication level of advertisers on Amazon. What they’re willing to do to grow market share is becoming more advanced. For the private equity groups that are doing roll-ups of these Amazon focused companies, they’re taking these smaller brands and throwing a lot more ad budget behind them. So I just think overall, more competition, more competition for ad space, higher CPCs.
Melissa Burdick
The way to go from page five when you’re a seller and they buy you to page one is Paid Search.
Kiri Masters
Yep.
Melissa Burdick
So that’s one of the things that you can do overnight. So I definitely think it’s going to be a very interesting space to watch for sure. Tell us about your predictions, Kiri, you did this great Forbes article, so tell us what you think.
Kiri Masters
Yeah, well, a lot of overlap in the themes that we already talked about. Like we talked about, Amazon’s fulfillment capabilities will become the next AWS. What that means is Amazon has built this incredible, and now proven during a pandemic, reliable fulfillment capability that they can ultimately not spin out as a separate business, but it will be a service that businesses can use independent of selling on Amazon. And that’s just a good thought experiment to think about because it means Amazon’s fulfillment capabilities need to become even more advanced and have that ability to stand alone and serve B2B customers, consumer selling packages to each other. So really bullish on what Amazon’s doing with fulfillment. As we already talked about, more experiments with live video and virtual experiences. During Prime Day, I was just stuck on watching those live video demonstrations. Some were great. Some were terrible. But a playbook is emerging of how brands can partner with influences to do live video, run their own really engaging live video demonstrations and things like that. This is starting. People are getting the hang of it. It’s becoming more engaging. There was some really good content happening there and I’ll just say, in the Chinese market, live streaming accounts for 9% of all e-commerce revenues. And don’t I think we’re going to get that overnight in the US. But that’s where the trend is going. Prediction three is maybe a little bit of wishful thinking, but I think that given the congressional inquiry, Amazon’s got a bit of heat around private label brands and they might slow their roll on that. That is what I hope will happen at least. More competition amongst sellers. We talked about that. Bulking up Amazon Fresh we also talked about. Pantry going away and Amazon really needing to dig deep to establish their presence with Amazon Fresh both in the physical footprint and online. So I think getting rid of Pantry is going to help to streamline what they’re doing there, reduce a lot of confusion and conflict in that buying process. There on the right track there. And Amazon Advertising making a grab for above-the-line ad spend. We’re already seeing that with the marketing cloud. We’re seeing that from the Cowen data that you pulled up before, Melissa. That Amazon’s a net benefactor of budgets being pulled back from TV and other channels as well. So I think we’re already starting to see some of these predictions coming to light. Maybe I wasn’t aggressive enough with my predictions.
Melissa Burdick
All right. You’ve got an exciting book coming out. Tell us a little bit about this.
Kiri Masters
Yeah. So I co-authored a book in 2019 with a colleague of ours, Mark Power, called Amazon for CMOs, which was well received. It was actually recently titled the Top 15th Retail Book of All Time by Book Authority, which is cool. And Stefan Jordev, who is our Director of Marketplace Insights at Bobsled Marketing, and I thought there’s just not that much content out there for brands navigating Instacart, which we see is a huge opportunity providing incredible ROI for brands. Like universally, all the brands that we spoke with see the best ROI on InstaCart. But there’s not a playbook out there. There’s a fairly low level of confidence from brands that they really understand all the ins and outs of this platform. So we interviewed a lot of brands. We spoke with Melissa, got some intelligence from some solution providers in the category. So the first real playbook out there for brands navigating Instacart.
Melissa Burdick
Awesome. Yeah, Instacart has exploded, so it’s been a really fun platform to work on. And I just got another note from them actually this week saying they’re back to pandemic shopping behavior. It is quite a crazy and fun thing for sure. All right. Well, thank you so much, Kiri. So we’ll head into Q&A, but really appreciate all the great insights. Thank you so much for all the great thought leadership that you do. And with that, we’ll head into the Q&A section. OK, there was one question that came through and it was, “have you researched on or have any data around how using promo in the ads impacts click through rate or conversion?” And we don’t have enough data yet to give metrics. But I do know anecdotally. So when I was at Amazon, I worked on a lot of the ad products and one of the ones that I worked on was trying to integrate badges and things like that into the ad types. And whenever we did that, it had significance, click-through rate and performance improvement. So definitely I can tell you, yes, there’s improvement, an exact amount, I don’t know. But that’s why having a platform like Pacvue really helps because you can do a lot of tests and learns easily and measure them. And frankly, the best way to do it is to test on your own products because everything is so dependent on your specific category, your competitors, and all that kind of stuff. “All right, as a new advertiser on Amazon, where do I start?” There’s so much to unpack in that, but one of the things that you can start with is understanding, is this something that you’re going to insource or outsource to an agency? If you don’t have know-how internally it can be overwhelming. So working with a partner like someone like a Bobsled is always kind of a great way to get started because there is a lot to do. What I like to say is you need two things. You need a person, the practitioner, and you need a tech stack, which of course, I’m going to tell you is going to be Pacvue. But try it out for yourself to see. So those are really the two things that you need. “Amazon Live and attribution?”, I’m notsure on that one yet, to be honest, I don’t think that there is attribution. That’s certainly that certainly isn’t in the API, so don’t have a lot of great insight into that. “Are there any CPG brands on Amazon that you think are doing a great job at advertising right now?” There are a lot of great brands, I think Henkel is doing a really great job if you search “laundry detergent”. Some of those keywords, I think that they have a really great strategy around what they’re doing. There’s so many great brands. It’s hard to even unpack and kind of tell you all about that. But that would actually be a great idea for my next webinar, which will be providing examples of best in class and why. So I’m going to put that into my tune in next time. “What are Melissa’s predictions for 2021?” Thank you, Tim. You know, I have a lot of those. What I see, and I live and breathe, is just the continued rise of self-service ad platforms and the unification of retail media. And that’s to be maybe a little bit biased is where Pacvue sits. But, you know, everyone is following the Amazon playbook. So much is moving to e-commerce. And it is a tough channel in terms of profitability and advertising helps that profitability. So we’ve launched Instacart, Walmart, eBay, Microsoft, we’re launching DSP read and write access this year. So I think that just the continuing unification of these retail platforms advertising as being a big thing, I do think livestream and micro-influencers is also going to be a complement to everybody’s retail strategy to be able to get more awareness of products out there. “Who has the edge in grocery, Amazon, Wal-Mart, Target, Kroger and why?” You know, I really think that there’s there is a war between Amazon and Wal-Mart happening. I mean, Amazon is experimenting with a lot of different formats. I think that they’re still trying to get it right, as you can see, with like Pantry exiting, a lot of their formats of Fresh happening. I think Wal-Mart has a lot of opportunity in this grocery space. They are doing a great job. And so I would say all of these retailers, grocery’s going to be very important this year and we’re going to see significant strides to be competitive. “What channels are you seeing as a leader for tech right now that can impact Amazon Social Search or OTT?” So one way that I would answer that is, like I said, I think that the whole advertising funnel is kind of being reimagined as new platforms happen, so like TikTok, for example, that we talked about in this presentation of how TikTok is influencing trends and then, therefore, these products that are created. And so you’ll see LED strips, for example, became this trend. And now there’s like hundreds of brands selling the same type of LED product. That’s then going to move into how do you get your brand noticeable on the first page of search results? So you’re going to use various methods within the advertising realm on and off Amazon to help people identify that, plus the use of micro-influencers.Man, you guys are full of lots of questions here. “What channels are most effective for sellers to continue engaging with customers post-sale?” That’s a great question. I think that there’s a lot around email marketing and follow up leveraging things like DSP programmatic to be able to retarget consumers after they’ve made a purchase or they have visited a page and haven’t bought yet as well. So I think that’s the sophistication of where we’re going is that full-funnel marketing approach. And then once the customers do complete their purchase of how you keep them reengaged. And that’s through things like, you know, adding to your email marketing database, not getting lost in email, and having more creative ways to target through retargeting as well. “Is there a benchmark for percent of spend that should be allocated to off Amazon advertising to drive traffic to Amazon only brands and products?” You know, I think that this is where it’s super specific to your category. How competitive is your category within search? Like basically what people do is they really fill out search first and then they move to DSP on Amazon. And so I think that this is very specific to what your goals are, how competitive your marketplace is, what your profit metrics are on Amazon and Amazon. Usually, it’s more profitable to you on your own, direct-to-consumer. A good benchmark is kind of 60, 40. 60% to your DTC and 40% to Amazon, that’s kind of what I’ve heard. “What’s the best way to get benchmark data for your specific category?” That is something that you can get through Pacvue. So if you want to contact us sales@pacvue.com or melissa@pacvue.com, we can help you get some benchmark data as well. OK. Thank you so much for everybody’s time before I get pummeled with more questions that I may or may not be able to answer. Feel free to email me at melissa@pacvue.com. If you weren’t satisfied with the answer. I always like to say I may not know the answer, but I know how to get the answer. So please email me and looking forward to our next webinar. Thanks for coming.
