Q4 Advertising Trends For Amazon
13 Feb 2024
This article will help you measure your own performance and comprehend important market trends by providing insights into the present status of retail media advertising in the United States and Europe. The data used in this report has been taken from Pacvue’s Retail Media Benchmarks report. (https://pacvue.com/guides-reports/q4-2023-cpc-report-retail-media-benchmarks/)
US Data
Comparing year-on-year data, there was an 11.7% increase in Cost Per Click for Sponsored Products and a 1.8% increase for Sponsored Brands indicates that there is perhaps heightened competition for keywords or products.
To overcome this increase in CPC, it would be advised that a few strategies would be implemented to reduce this cost for brands. Conducting thorough keyword research is essential to identify high-performing and cost-effective keywords and you will be able to see which keywords are costing the most and identify if they are driving conversions or not. Another way this could be overcome would be to leverage bid strategies and ensure that bidding strategies align with the campaign goals and adjusting the bids based on the performance of specific keywords and products.
Examining year-on-year metrics, Click-Through Rate (CTR) dropped by 14.8% for Sponsored Brands but increased by 3.2% for Sponsored Products. However, on a quarter-on-quarter basis, CTR declined by 10% for Sponsored Brands and nearly 6% for Sponsored Products which can indicate a potential decline in the effectiveness of brands advertising strategies.
Brands can implement strategies to overcome this decline in CTR such as ensuring their keyword targeting aligns with customer search queries. The ad copy and imagery should be optimised to highlight unique selling points, enhance the overall appeal of the product, and encourage clicks. Brands should always be A/B testing on various elements also to identify the most effective components of their ads.
The average spend for Sponsored Brands rose by 8.2% year-on-year, driven by brands utilising new ad placements such as Sponsored Brands Video but wasn’t met with perhaps the same amount of ROAS that was hoped for with a marginal 0.7% increase. Sponsored Products also experienced a significant uptick, with a 17.7% increase from 2022 and this was met with a slight decrease of 1.2% that is attributed to heightened competition and lower conversion rates during the holiday season.
With brands spending more on Sponsored Products ads but not seeing as much ROAS, we can implement strategising reviews and product ratings to improve ROAS and increase conversions as most customers only buy products with good reviews so ensuring you have a system in place is very important for increasing conversions.
EU Data
The competition in Amazon's advertising space saw a significant year-on-year increase, witnessing a surge of over 19% for both Sponsored Brands and Sponsored Products compared to 2023. This points to a noteworthy uptick in the number of advertisers on the platform, leading to intensified competition for securing ad placements. Within the Sponsored Products domain, Return on Ad Spend (ROAS) demonstrated a positive growth of 8% year-on-year, driven by robust conversion rates observed during Q4. Conversion Rates for Sponsored Products exhibited a significant 14.4% year-on-year increase, highlighting the effectiveness of these ads in transforming clicks into actual sales. Conversely, Sponsored Brands saw a more modest uptick of 3.1% in conversion rates compared to the preceding year.
This growth is great to see for brands and there are a few strategies we can use to continue driving growth for brands. Data analysis is key as we will be able to identify trends and patterns of customer behaviour and the effectiveness of every ad so we can understand where our budget is best spent to get the best ROAS. To continue improving growth, brands should also look at expanding their product offerings and ensuring that cross-selling and upselling strategies are being implemented to increase average order values and overall revenues.
Holiday & Cyber 5 Results
7.5% YoY increase in Black Friday spending.
9.6% YoY increase in Cyber Monday spending.
48% increase in Sponsored Brands ad spend.
Sponsored Brands ROAS down by 13%.
37% increase in Sponsored Products ad spend.
Sponsored Products ROAS down by 10%.
These figures are showing an increase in ad spend with a decrease in ROAS which is not ideal so to overcome situations like this, we must implement some strategic optimisations and adjustments. Keyword optimisation is essential for sponsored brands ads to ensure brands are identifying cost-effective keywords and removing or adjusting bids on keywords that are driving high costs with low returns. Utilising negative keywords is also needed to exclude irrelevant traffic and improve targeting. Lastly, revising your ad copy and imagery is necessary to enhance relevance and encourage clicks but only for your most relevant audience.
For sponsored products ads, ensuring your product listings are optimised is essential such as product titles, descriptions, and imagery to maximise the relevance and appeal to your audience to try and boost conversions. Evaluating product margins is also important especially when promoting specific products or offering discounts as brands should focus on products with better margins to ensure profitability with even lower ROAS.
Summary
Working with an Amazon advertising specialist like Toucan is crucial for gaining a competitive edge and maximising ROAS. Our team at Toucan possess in-depth knowledge of Amazon's unique advertising platform, its algorithm, and constantly evolving features. We excel in data analysis, enabling us to optimise your campaigns, allocate budgets efficiently, and craft compelling ad creatives. Moreover, we stay updated with industry changes, conduct thorough competitor analysis, and implement these targeted strategies to reach the most relevant audience for your brand. Our expertise ensures that your brand stands out, adapts to market trends, and achieves tangible results in the competitive Amazon marketplace.
This article will help you measure your own performance and comprehend important market trends by providing insights into the present status of retail media advertising in the United States and Europe. The data used in this report has been taken from Pacvue’s Retail Media Benchmarks report. (https://pacvue.com/guides-reports/q4-2023-cpc-report-retail-media-benchmarks/)
US Data
Comparing year-on-year data, there was an 11.7% increase in Cost Per Click for Sponsored Products and a 1.8% increase for Sponsored Brands indicates that there is perhaps heightened competition for keywords or products.
To overcome this increase in CPC, it would be advised that a few strategies would be implemented to reduce this cost for brands. Conducting thorough keyword research is essential to identify high-performing and cost-effective keywords and you will be able to see which keywords are costing the most and identify if they are driving conversions or not. Another way this could be overcome would be to leverage bid strategies and ensure that bidding strategies align with the campaign goals and adjusting the bids based on the performance of specific keywords and products.
Examining year-on-year metrics, Click-Through Rate (CTR) dropped by 14.8% for Sponsored Brands but increased by 3.2% for Sponsored Products. However, on a quarter-on-quarter basis, CTR declined by 10% for Sponsored Brands and nearly 6% for Sponsored Products which can indicate a potential decline in the effectiveness of brands advertising strategies.
Brands can implement strategies to overcome this decline in CTR such as ensuring their keyword targeting aligns with customer search queries. The ad copy and imagery should be optimised to highlight unique selling points, enhance the overall appeal of the product, and encourage clicks. Brands should always be A/B testing on various elements also to identify the most effective components of their ads.
The average spend for Sponsored Brands rose by 8.2% year-on-year, driven by brands utilising new ad placements such as Sponsored Brands Video but wasn’t met with perhaps the same amount of ROAS that was hoped for with a marginal 0.7% increase. Sponsored Products also experienced a significant uptick, with a 17.7% increase from 2022 and this was met with a slight decrease of 1.2% that is attributed to heightened competition and lower conversion rates during the holiday season.
With brands spending more on Sponsored Products ads but not seeing as much ROAS, we can implement strategising reviews and product ratings to improve ROAS and increase conversions as most customers only buy products with good reviews so ensuring you have a system in place is very important for increasing conversions.
EU Data
The competition in Amazon's advertising space saw a significant year-on-year increase, witnessing a surge of over 19% for both Sponsored Brands and Sponsored Products compared to 2023. This points to a noteworthy uptick in the number of advertisers on the platform, leading to intensified competition for securing ad placements. Within the Sponsored Products domain, Return on Ad Spend (ROAS) demonstrated a positive growth of 8% year-on-year, driven by robust conversion rates observed during Q4. Conversion Rates for Sponsored Products exhibited a significant 14.4% year-on-year increase, highlighting the effectiveness of these ads in transforming clicks into actual sales. Conversely, Sponsored Brands saw a more modest uptick of 3.1% in conversion rates compared to the preceding year.
This growth is great to see for brands and there are a few strategies we can use to continue driving growth for brands. Data analysis is key as we will be able to identify trends and patterns of customer behaviour and the effectiveness of every ad so we can understand where our budget is best spent to get the best ROAS. To continue improving growth, brands should also look at expanding their product offerings and ensuring that cross-selling and upselling strategies are being implemented to increase average order values and overall revenues.
Holiday & Cyber 5 Results
7.5% YoY increase in Black Friday spending.
9.6% YoY increase in Cyber Monday spending.
48% increase in Sponsored Brands ad spend.
Sponsored Brands ROAS down by 13%.
37% increase in Sponsored Products ad spend.
Sponsored Products ROAS down by 10%.
These figures are showing an increase in ad spend with a decrease in ROAS which is not ideal so to overcome situations like this, we must implement some strategic optimisations and adjustments. Keyword optimisation is essential for sponsored brands ads to ensure brands are identifying cost-effective keywords and removing or adjusting bids on keywords that are driving high costs with low returns. Utilising negative keywords is also needed to exclude irrelevant traffic and improve targeting. Lastly, revising your ad copy and imagery is necessary to enhance relevance and encourage clicks but only for your most relevant audience.
For sponsored products ads, ensuring your product listings are optimised is essential such as product titles, descriptions, and imagery to maximise the relevance and appeal to your audience to try and boost conversions. Evaluating product margins is also important especially when promoting specific products or offering discounts as brands should focus on products with better margins to ensure profitability with even lower ROAS.
Summary
Working with an Amazon advertising specialist like Toucan is crucial for gaining a competitive edge and maximising ROAS. Our team at Toucan possess in-depth knowledge of Amazon's unique advertising platform, its algorithm, and constantly evolving features. We excel in data analysis, enabling us to optimise your campaigns, allocate budgets efficiently, and craft compelling ad creatives. Moreover, we stay updated with industry changes, conduct thorough competitor analysis, and implement these targeted strategies to reach the most relevant audience for your brand. Our expertise ensures that your brand stands out, adapts to market trends, and achieves tangible results in the competitive Amazon marketplace.
This article will help you measure your own performance and comprehend important market trends by providing insights into the present status of retail media advertising in the United States and Europe. The data used in this report has been taken from Pacvue’s Retail Media Benchmarks report. (https://pacvue.com/guides-reports/q4-2023-cpc-report-retail-media-benchmarks/)
US Data
Comparing year-on-year data, there was an 11.7% increase in Cost Per Click for Sponsored Products and a 1.8% increase for Sponsored Brands indicates that there is perhaps heightened competition for keywords or products.
To overcome this increase in CPC, it would be advised that a few strategies would be implemented to reduce this cost for brands. Conducting thorough keyword research is essential to identify high-performing and cost-effective keywords and you will be able to see which keywords are costing the most and identify if they are driving conversions or not. Another way this could be overcome would be to leverage bid strategies and ensure that bidding strategies align with the campaign goals and adjusting the bids based on the performance of specific keywords and products.
Examining year-on-year metrics, Click-Through Rate (CTR) dropped by 14.8% for Sponsored Brands but increased by 3.2% for Sponsored Products. However, on a quarter-on-quarter basis, CTR declined by 10% for Sponsored Brands and nearly 6% for Sponsored Products which can indicate a potential decline in the effectiveness of brands advertising strategies.
Brands can implement strategies to overcome this decline in CTR such as ensuring their keyword targeting aligns with customer search queries. The ad copy and imagery should be optimised to highlight unique selling points, enhance the overall appeal of the product, and encourage clicks. Brands should always be A/B testing on various elements also to identify the most effective components of their ads.
The average spend for Sponsored Brands rose by 8.2% year-on-year, driven by brands utilising new ad placements such as Sponsored Brands Video but wasn’t met with perhaps the same amount of ROAS that was hoped for with a marginal 0.7% increase. Sponsored Products also experienced a significant uptick, with a 17.7% increase from 2022 and this was met with a slight decrease of 1.2% that is attributed to heightened competition and lower conversion rates during the holiday season.
With brands spending more on Sponsored Products ads but not seeing as much ROAS, we can implement strategising reviews and product ratings to improve ROAS and increase conversions as most customers only buy products with good reviews so ensuring you have a system in place is very important for increasing conversions.
EU Data
The competition in Amazon's advertising space saw a significant year-on-year increase, witnessing a surge of over 19% for both Sponsored Brands and Sponsored Products compared to 2023. This points to a noteworthy uptick in the number of advertisers on the platform, leading to intensified competition for securing ad placements. Within the Sponsored Products domain, Return on Ad Spend (ROAS) demonstrated a positive growth of 8% year-on-year, driven by robust conversion rates observed during Q4. Conversion Rates for Sponsored Products exhibited a significant 14.4% year-on-year increase, highlighting the effectiveness of these ads in transforming clicks into actual sales. Conversely, Sponsored Brands saw a more modest uptick of 3.1% in conversion rates compared to the preceding year.
This growth is great to see for brands and there are a few strategies we can use to continue driving growth for brands. Data analysis is key as we will be able to identify trends and patterns of customer behaviour and the effectiveness of every ad so we can understand where our budget is best spent to get the best ROAS. To continue improving growth, brands should also look at expanding their product offerings and ensuring that cross-selling and upselling strategies are being implemented to increase average order values and overall revenues.
Holiday & Cyber 5 Results
7.5% YoY increase in Black Friday spending.
9.6% YoY increase in Cyber Monday spending.
48% increase in Sponsored Brands ad spend.
Sponsored Brands ROAS down by 13%.
37% increase in Sponsored Products ad spend.
Sponsored Products ROAS down by 10%.
These figures are showing an increase in ad spend with a decrease in ROAS which is not ideal so to overcome situations like this, we must implement some strategic optimisations and adjustments. Keyword optimisation is essential for sponsored brands ads to ensure brands are identifying cost-effective keywords and removing or adjusting bids on keywords that are driving high costs with low returns. Utilising negative keywords is also needed to exclude irrelevant traffic and improve targeting. Lastly, revising your ad copy and imagery is necessary to enhance relevance and encourage clicks but only for your most relevant audience.
For sponsored products ads, ensuring your product listings are optimised is essential such as product titles, descriptions, and imagery to maximise the relevance and appeal to your audience to try and boost conversions. Evaluating product margins is also important especially when promoting specific products or offering discounts as brands should focus on products with better margins to ensure profitability with even lower ROAS.
Summary
Working with an Amazon advertising specialist like Toucan is crucial for gaining a competitive edge and maximising ROAS. Our team at Toucan possess in-depth knowledge of Amazon's unique advertising platform, its algorithm, and constantly evolving features. We excel in data analysis, enabling us to optimise your campaigns, allocate budgets efficiently, and craft compelling ad creatives. Moreover, we stay updated with industry changes, conduct thorough competitor analysis, and implement these targeted strategies to reach the most relevant audience for your brand. Our expertise ensures that your brand stands out, adapts to market trends, and achieves tangible results in the competitive Amazon marketplace.