Digital ads: what, when, how and why

Over the past year, our record-setting number of Learning White Papers demonstrated that, for Amazon Ads effectiveness, it matters what you do (insights 1-2), when you do it (insights 3-4) and how and why you do it (insights 5-6). Here is my overview, happy to dive deep in what you prefer in next weeks:

1.?????Synergy: use Amazon Ad products together.?Multiple studies have demonstrated synergy among Amazon Ad products - across upper funnel and lower funnel products. For example,??Sponsored Ads and DSP work together to reduce time to revenue baseline by 24% in Germany. In addition, as many Amazon shoppers purchase in multiple product categories, brands who want to reach new customers can use Amazon Ads to convert adjacent categories’ shoppers with high purchase propensity effectively.?This study builds on our US-based paper in the Journal of Applied Marketing Analytics, and greatly expands my academic publications on online synergy.

2.?????Full Funnel: Upper funnel ad products are effective both at increasing awareness/consideration AND at increasing conversion.?Dynamic ads (e.g., display, video, audio) are better at capturing audiences’ attention. In one customer level study, we find that customers were 17X more likely to click on video vs. static ads. The first 5 seconds of video are critical in increasing overall CTR.??This study is currently under review at the Journal of Marketing Analytics and will be presented next week at the Marketing Analytics Symposium Sydney. At vertical level such as U.S. Hardlines, in addition to the significant impact of Sponsored Products (SP) on retail metrics, Sponsored Brands (SB), DSP Display, and Streaming TV ads (STV) all have higher efficacy on DPV and revenues, in contrast to their current limited usage.?

3.?????Long-term and off-Amazon: Amazon Ads have long-lasting effect beyond the typical 2-week on-Amazon only measurement.?In two studies, we find that Amazon Ads have long-lasting effects on both Detail Page Views (DPV, i.e. product page views) and revenue, which are typically 30%-70% of the total effect inside the 2-week attribution window. We recommend brands use a longer measurement window especially for Softline products with the largest percentage of effect (70%) realized after 2 weeks. In another study collecting off-Amazon sales in ten product categories, we find that for every ten customers who research on Amazon, 17 other research on Amazon but buy off-site.?Moreover, customers who research more on Amazon, were more likely to buy, either on Amazon or off-Amazon. To drive the latter part of off-Amazon sales, we recommend using Sponsored Display, DSP Display, Sponsored Brands, Sponsored Products, and an always-on strategy.??Furthermore, a follow-up study suggests campaigns with broader reach (i.e., lifestyle and in-market audiences) also increase offline revenue.?This research, presented at the Artificial Intelligence, Machine Learning, and Business Analytics conference, is currently under review at the Journal of Interactive Marketing.

4.?????Economic uncertain times: Amazon Ads helps brands during economy uncertainty to remain top-of-mind among shoppers.?A recent study among Consumer Packaged Goods (CPG) advertisers shows that those with always-on advertising strategy even during inventory challenges see significant lifts in sales than those who only advertise during inventory recovery or not advertise at all.??Another study across all three verticals of Hardlines, Softlines, and CPG show that in challenging product categories (e.g., slow growth and low entry barrier), brands who invested in Sponsored Ads and/or leveraged focused campaign strategies such as retargeting and negative keywords, see +2X lift in brand consideration and revenue rankings, relative to peers. In contrast, we recommend retargeting and geo-based audience for product categories prone to inflation. Increasing ad budget in challenging categories significantly lift brands’ performance relative to peers on consideration and revenue by 20%.?This study will be presented next week at the Marketing Analytics Symposium Sydney.

5.?????Always-on: How you spend with Amazon Ads also matters.?In contrast to typical practice of 'pulse' advertising during major events, our research across categories shows the benefits of always-on spending. In categories with low seasonality, such as Home Goods, always-on spending yielded superior results. In categories with high seasonality, such as shoes, always-on with spikes in key moments is better than investing in key moments only. This research specifies the general academic advice to combine the 'high season' ad budget with a 'maintenance' ad budget during the rest of the year.

6.?????Brand growth stage and target KPI are key to ad product efficacy:?In one brand level study, we find that when brands adopt actions recommended by Amazon Priority 1P ML algorithms based on their growth stage, their overall revenues improve as well. In another large-scale study with 122K brands/browse nodes across verticals, improvement on different brand building metrics call for different adverting and retail actions. For example, we recommend increasing Sponsored Brand Video (SBV) budget for brand awareness, consideration and retail revenue. In addition, we recommend adopting Fire TV and Owned & Operated Display for revenues.?This study was presented at the Marketing Dynamics Conference and will be submitted to the Journal of Business Research.

Are these insights helpful for your brands? Do they reflect your experience? And which one(s) should I make the sole topic of a next Newsletter? Please let me know!