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Are you overlooking these crucial Ad metrics on Amazon?
Are you overlooking these crucial Ad metrics on Amazon?
George Reid
July 21, 2023
Sponsored Ads on Amazon are vital for brand growth. However, understanding the true cost and returns of your ad spending is critical. This involves delving into advertising performance, considering all metrics and their importance, as well as viewing the larger context beyond the ad data.
Among all the metrics, 14 stand out as being essential but are often overlooked in many reports. Neglecting these could potentially lead to missed opportunities. Whereas, integrating them into your reports can unearth invaluable insights. These will help make more informed advertising decisions to ensure you are maximizing their potential and the return on each dollar spent. That's why we ensure these metrics are part of our comprehensive advertising reports.
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Not including the fundamental advertising metrics like Ad spend, Sales, and ACOS, since these are typically present in every report. In this email, I would like to draw your attention to the usually unreported ones. So, let’s take a look:
New to Brand (NTB)
This metric identifies first-time buyers of your brand through your Ad. With the bids getting more expensive and marketplaces getting more competitive, your brand’s customer base matters for long-term growth. It’s a useful way to measure your customer acquisition.
Video Metrics
Videos, in the first place, are becoming increasingly important, and an effective Ad strategy. If you are running video ads, looking at the video-specific metrics can help drive higher engagement. These include viewable view-through rates, click-through rates, first-quartile views, midpoint, third-quartile, and video complete views. Aiming for better video engagement will lead you to drive more clicks and higher ROI.
Keywords Conversion (Clicks-to-Sales)
This metric is useful in evaluating how well your keywords lead to sales, allowing you to allocate more resources to the ones with higher conversion rates.
Additionally, it reveals, for a given keyword, the average number of clicks needed to achieve a sale, guiding you in adjusting your bids effectively.
Keywords Impressions Share
This metric reveals your ad's visibility compared to potential views within chosen keywords. A higher share indicates stronger keyword competitiveness. On a keyword with higher conversion, you would want to maximize the impressions share to maximize returns on Ad spend.
Halo Sales
Sales data reported on the Ad Console UI for a particular product may not always reflect direct sales of that product alone. This is because when a shopper clicks on your advertised product but ends up buying a different, non-advertised item from your brand, the sale is still credited to the clicked product's ASIN.
This can lead to misinterpretation in reporting as total sales might include purchases of different items. This information can be found in the advertised product and purchased report for Sponsored Products and Sponsored Display ads and in the attributes sales report for Sponsored Brands/Sponsored Brands Video ads.
Branded vs Non-Branded
During audits, we frequently encounter campaigns mixing branded and non-branded keywords, leading to unclear budget utilization. Sales from branded keywords suggest strong brand recognition, while sales from non-branded keywords can hint at market penetration. Overinvesting in branded keywords might cannibalize organic sales, whereas underinvestment could imply a weak brand defense. More non-branded sales could signify an increase in new customers for the brand. Therefore, it's essential to distinctly analyze and understand the impact of branded vs non-branded sales and plan budget allocation for optimum growth.
Placements & Performance
Analyzing where your Ads appear and their performance in each spot aids in optimizing Ad placement strategies for better results. As we often recommend based on this data, optimizing for Top of search placements for higher conversion.
Beyond Ad metrics,
Here are important account-level metrics to take a look at as well:
Search Query Performance
A valuable insight that Amazon has made accessible in the last year, through the Search query dashboard. It helps to measure your Brand’s share of clicks, impressions, purchases, add-to-carts, etc. vs others on the Amazon Search Results page for search terms. It’s useful to benchmark as well as understand the potential and scalability.
Individual Product TACOS (Total Advertising Cost of Sales)
While TACOS is a key metric for understanding overall account profitability, looking at account-level TACOS doesn't show how much each product contributes. Knowing the TACOS for each product can help you make product-specific strategies and expansion plans, depending on the product's return on investment, growth potential, and relevance to your business goals.
Organic to PPC Sales Ratio
This ratio shows the proportion of your sales that come organically versus paid advertising. It can help assess the balance between organic growth and paid promotional efforts. It helps understand how much your product's sales rely on advertising.
If your organic sales are growing, that's a good sign for your product's natural ranking and visibility. If this growth coincides with recent increases in ad spending, it's a positive sign that your ad spend is boosting your organic sales.
Net Profits
Net profits are what's left after you subtract all costs, including ad spending, from your revenue. It's important to keep an eye on profits along with other metrics to set appropriate TACOS targets. For instance, a brand we recently worked with saw increased profits despite a 2% rise in TACOS, thanks to an increase in sales volume. However, depending on the profit margin, this could have been less profitable. Therefore, it's essential to consider both net profit and TACOS. This gives you a fuller picture, helping you set the right TACOS target and better assess the impact of advertising.
Repeat Sales & Lifetime Value (LTV)
For those selling in categories where repeat sales are common, considering this factor is crucial when assessing advertising efficiency. For example, your Ad campaign may have a high ACOS but attract more new customers who could make repeat purchases. If recent advertising has boosted repeat sales, you'll see a lower TACOS, indicating greater profitability. Repeat purchases, which can occur multiple times within a year, can actually reduce your real advertising costs compared to what you might estimate based on immediate ACOS/TACOS. Therefore, we also examine customer LTV when calculating customer acquisition costs. This perspective helps optimize Ad spend for long-term sales growth and customer base expansion.
Subscribe & Save Customers
This metric is particularly helpful for products that garner repeat sales. Tracking the count of customers using Amazon's Subscribe & Save feature for your products aids in estimating customer retention and forecasting consistent future sales. For certain brands, subscribers can contribute to revenues that are up to 2.68 times higher. For some, the increase might even be more significant (this data can be found on the Subscribe & Save dashboard).
Brand Metrics
Brand Metrics offer a wealth of insights and allow you to compare your brand to others in the same category. For instance, it shows how your product's conversion rate stacks up against the category's average and top performers. If your conversion rate is comparatively lower, it suggests there's room for improvement to drive more sales. Beyond conversion rates, the dashboard also includes metrics like New-to-brand, brand searches, and add-to-carts, which help gauge how effectively your ads promote brand discovery, consideration, and loyalty.
Recently, Amazon added a funnel view that breaks down performance at the awareness, consideration, and purchase stages. Additionally, it shows the number of shoppers visiting your product pages and the sales value generated through consideration (sales that didn't occur immediately but within 12 months), demonstrating the impact of your ads on your brand and product consideration.
Other learnings:
Product Targeting campaigns shows Keywords as matched targets. For the majority of PT campaigns, particularly SB & SBV, we discovered keywords as customer search terms. [Read more].
Bulk Sheets now support Chinese and Japanese language. To access them, you simply need to change your preferred language in your advertiser profile. [Read more].
Prime Day breaks records. Over 375 Million Items Sold and $2.5 Billion Saved on Global Deals. [Read more].
Thanks,
George
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