We’re bringing you Q1 2022 Amazon, Walmart, and Instacart advertising data from Pacvue and Helium 10 to help brands make sense of the current trends and key drivers in the retail media ecosystem.
Summary
What’s new with Amazon advertising? Pacvue’s President and Co-Founder, Melissa Burdick, is joined by Ben Aldern, Staff Data Analyst at Helium 10, and Destaney Wishon, Co-Founder of BetterAMS, to discuss Pacvue’s Q1 2022 CPC Report, new trends in Amazon advertising, and category-specific insights for Amazon, Instacart, and Walmart. Learn new features and improvements coming to Amazon Advertising and Amazon DSP. Go deeper into the CPC analytics provided by Pacvue and Helium 10 with expert analysis by our industry insiders.
Key Takeaways
- Amazon introduced Sponsored display use in portfolios, Amazon Creative Services, Personalized eCommerce Responsive Creative, and Search Catalog and Search Query performance dashboards.
- Sponsored Display now supports bulk uploads with Bulk Sheets 2.0.
CPCs decreased approximately 8%quarter-over-quarter for Amazon Sponsored Products and Sponsored Brands. - CTR for Sponsored Products ads increased 5.7% quarter-over-quarter.
- Display CPCs for Toys and Games show little drop off from Q4 2021 holiday season.
- The Sporting Goods category sees a slight decrease in CPC.
Transcript
Melissa
Okay, should we get started? ’cause we do have a ton of content today. Thanks everyone for joining. I am so excited to be here to introduce our panelists, maybe if I can get the mouse to work. I haven’t done a webinar since last quarter, so I’m a little bit rusty, but everyone… I’m Melissa Burdic, President and co-founder of Pacvue and I have an amazing star studded cast here. I’m gonna let themselves introduce themselves, so Ben you first and then Destaney, can you tell us a little bit about yourselves and what you do…
Ben Aldern
Yeah, thanks, Melissa, I’m now a Staff Data Analyst at Helium 10, so I’m kind of deep in the weeds of Helium10’s data all day every day, but I previously started Prestozon, which joined Helium 10 a year and a half ago, so I’ve spent about five years or six years working with Amazon advertising data in-depth.
Destaney Wishon
Awesome, my name is Destaney Wishon. I am Cofounder and CEO of BetterAMS, and the last six years, I have done nothing but Amazon advertising. So very in the weeds with everything new and exciting going on, and I think our team manages around $6 million worth of spend a month, so… That’s it.
Melissa
Awesome, and if you aren’t following Destaney on LinkedIn, open up LinkedIn right now and follow her because she always has amazing insights, always talking about the latest features and how to deal with them, so… I know I learn a ton from Destaney every day when I open up LinkedIn, so thanks for being part of our community and doing what you do. All right, so we are going to get into our webinar, and this is really kind of what’s new at Amazon, that Destaney is gonna cover, I’ll talk a little bit about Instacart, Walmart, we’re gonna do a deep dive into benchmarks of the quarter and some insights. So with that, we’re gonna talk a little bit about news. Take it away Destaney.
Destaney
Yeah, so I would say for the first quarter ever, we had the least amount of really exciting updates, there was nothing really big changing in terms of creatives or direct actionable things that benefited brands, but on the flip side, Amazon has started building an incredibly strong foundation that is allowing a lot of agencies, a lot of tools, tech and brands who are utilizing some of the back-end aspects of Amazon advertising to really excel.
So I think a few of the high-level things, real-time budget usage data, given an API for the first time ever, Amazon’s actually giving us data that’s gonna allow us to basically make optimizations 10 times better. Sponsored display use in portfolios. I think that has been a really big issue with a lot of sellers ’cause they couldn’t properly utilize some of the budget distribution futures or just organization capability, so that was a really exciting one on the brand side. Amazon Creative Services launched. So Amazon is trying to allow better partnerships with a lot of the agencies out there and brands, so the creative services is a really cool little kind of dashboard that you can log into that allows you to see all of the services out there that are providing highly vetted, Amazon aligned creative, so video and search ads, anything you need for listings, localization, all of that can be found under Amazon Creative Services through advertising console. Personalized e-commerce responsive creative. This is a really small one that a lot of people probably didn’t realize, but when you have things like sponsored display, it’s basically making that creative a lot better, so if anyone was shopping and saw the really poor misalignment in the imagery for sponsored display on the product detail page, this has been fixed and has been, from what we’ve heard, improving conversion rates. Search catalog and search query performance dashboards. This was another incredibly exciting update because it gives brands a lot more insights into their actual search volume that is tied to their category. And sponsored Display has expanded bid recommendations to vCPM-based campaigns, and I put together a few other kind of quite call-outs that I think are a little bit more beneficial to brands on the next two slides, so Melissa if you wanna click forward, we have Bulk Sheets 2.0. For anyone who’s been managing their Amazon ads through bulk, this is a really, really exciting update ’cause it finally allowed us to use bulk to support sponsored display campaigns.
That was huge. One of the most exciting ones was the ability to change campaign and ad group names, so anyone who’s been working in the industry for the last five to six years and the industry has changed a lot, so your campaign nomenclature has probably changed and evolved 100% and if you want to make changes, you had to go through by hand and update all of these little details, examples, sponsored display, you see product displays, so everyone who had PDA in their nomenclature would have to go through the 30 and 50 campaigns and make those updates tab by tab. Well, now we can use full features to make those changes, so if you have any crazy softwares or crazy naming conventions from five years ago that are really messing up your ability to analyze your data, this was a huge and exciting and probably one of the most requested updates within bulk. And then the last big thing that I think has been really beneficial is just more performance metrics, so being able to analyze ROAS, conversion rate, CPC and click-through all through bulk has made anyone who uses formula-based optimizations a lot better and a lot more efficient.
And the next one I wanted to cover, because this has been a hot topic in all of the Amazon advertising groups, it’s been on LinkedIn, is Sponsored Display vCPM. The reason this has been a hot topic is because of the metrics you see here, on average, it’s usually 60% lower ACOS, and it’s typically being attributed five times the amount of sales as traditional sponsored display, so a high level… If you don’t really know what vCPM is, this looks absolutely amazing. So a lot of people are changing all our campaigns over, they’re focusing on this view CPM, but what they don’t necessarily realize is that a CPM model is you’re paying for impressions, and an impression with sponsored display means a shopper has to view the ad for one second, so if you’re a customer and you see the screenshot right here and you view that sponsor display ad and read for one second, and then you buy the Arteza product attached, you’re being attributed for that sale, so there’s been a lot of question of whether or not it is cannibalizing your sales or being distributed from a data perspective, and you could potentially say that this is skewing the data because they don’t actually have to click on the ad to be attributed for the sale.
Now, a lot of us that have spent a lot of time in this area knows that covering your product detail page with ads is subconsciously gonna influence a purchase, Amazon has a ton of data on how sponsored brand, sponsored display, sponsored products being ran in a line increases the likelihood of a conversion, all that to say is product detail page ads do typically lead to more conversions, but if you’re running a view CPM model, make sure you’re looking at your top line sales and don’t necessarily think the ad is performing better than a product targeting ad, it’s just more than likely being attributed to more sales than an ad that requires a click, and that is all I had for the new and exciting updates.
Melissa
Awesome, that was really interesting. Thanks for the kind of color and insight to that, it just shows you how attuned you have to be to these metrics and really looking for a holistic business and having smart people like Destaney helping… So, thank you. Alright, so now we’re gonna move on to kind of report the way that I look at these benchmarks, that’s what they are, they’re benchmarks for your business.
And so take us with grain of salt, each category performs differently, but also hopefully you have the report downloaded and after this we will be sending it around, but kind of high level, you know Ad spend fell quarter over quarter in Q1. You know, Q4 is the Super Bowl of advertising. So seasonality kinda came into play, CPC’s decreased as well, CTR showed some improvement and then kinda interestingly and nice, is that “Face Mask” after January, so starting February kind of fell off. So people, stopped searching for face masks as things eased and people were really focused on Valentine’s Day and Easter. And then a quick quiz, put it in the chat, so does anyone know the trending product that is the latest tiktok trend? we’re gonna reveal it in the next slide, so little chat, little engagement friends in the group here, nobody’s answering, but you can think to yourself in your head or you can put it in the chat.
Destaney
I’m always scared to answer these questions because if I know it, that means I’m spending way too much time on tiktok. You just get sucked in.
Melissa
I know. Well, the funny thing is, I did ask you and you didn’t know, so that’s a good thing, right? You’re not lending to much time on TikTok like I am, but I didn’t actually know either, so I’ll just reveal it now, so the answer is The splatter ball gun…
We’ll get back to that in a second. One thing is around the “my orders”, I asked a bunch of people, nobody really knew. A couple of theories around my orders is one, supply chain, nobody was getting their orders, they’re asking for it, that some people have said that my orders have moved around, but a lot of people searching where my orders are, something that is interesting is kind of popping up is fashion, women’s apparel, so lingerie for women for Valentines Day dresses, fashion is a higher margin business for amazon and they’re really… That’s a good thing for them.
But a little bit about the Splatter Ball Gun, I always find each quarter there’s a new TikTok trend, and of course, I turned to my 11-year-old son and ask them… What is this splatter ball gun? and he was able to tell me all about it. But it is this… Destaney we’re just kind of laughing about this, the misspelled word has a lot more views than the spelled, so I don’t know if a bunch of middle school kids are typing this into tiktok and doing it, but it’s basically a BB gun with orbiess that shoots, so these balls that kind of blow up water and the police don’t like the fact that people are going around shooting people with this, but it was a trending keyword on Amazon, lots of people with “gel ball blasters”, it looks like a lot of fun, but a little bit dangerous too.
Alright, so back to being serious again, again, these are benchmarks, and the way to use them is to really look at it in terms of if you’re significantly higher CPC, you’re in a much more expensive category, but this is really good information to understand and compare your business against… But as we saw click-through rates and ROAS had positive trend upwards, spend, CPC and conversion rates went down, definitely to download the report and compare this to your category to see what you saw on a category level in a spring cleaning, seasonality for cleaning and other kind of categories, spend went up… So there’s just a little bit of grain of salt that you have to look at these things, but we’re gonna get a deep dive into some of these, so average daily spend for sponsored product ads and sponsored brands saw an accelerated decrease Quarter over quarter in Q1 2022, and this is in line with what we saw a Q4 to Q1 last year, so it’s not unexpected. Q4 was a more drawn out holiday season last year, so some brands that had a lot of inventory challenges were even more drastic in Q1 leading to limited ad spend and supply chain shortages, and some brands have had a lot of cost increases, talk to a lot of brands about this and are having multiple cost increases, so it’s harder to spend money in advertising, also with supply chain pain as well.
Next, we’ll look at click through rate. So an interesting trend in Q1 was an improvement to click-through rate, so while ad spend declined a quarter over quarter, click through rates increased 5.7% for sponsored product ads and 9.4% for sponsored brand ads showing some improvement after sponsored products. So just slightly in Q4, some insights here, impressions and traffic go down in Q4, spend is less and therefore there’s less competition, so it’s easier to serve in more premium placements, and therefore CTR can go up. Also, the sponsored brand ads added the ability for some new custom lifestyle images before the product serves. So it makes it stand out. This was, I think, rolled out slowly last year and more widely adopted in Q1, and I have a picture of what that looks like here, and Destaney and I, I think they were talking a little bit about this before, this is a good thing to test and learn. I’ve heard conflicting things like higher CTR, but may be lower conversion, Destaney, what are you seeing on this one?
Destaney
We have 100% seen higher click-through rates, I think where we’ve seen complexity is how broad your imagery is, this one’s a great example, it’s a lifestyle image of the exact products in the landing page, but some people go really, really broad and it won’t be product-focused, which I think increases the click-through rate, but have poor conversions, so it’s all about the alignment of the creative with the targeting, and then your landing pages.
Melissa
Definitely things to test and learn and see what’s kinda working for you here.
Next, we’ll go to CPC. So CPC as kinda steadily declined here after they broke their increasing trend in Q4, not too much else to say about that. Conversion rates, what’s interesting here is they’re pretty much flat, so in Q4 there’s a higher intent to buy, usually there’s higher conversion… Q1 there is a little bit less intent, but the fact that this is pretty flat is a good sign. and then customer acquisition fell so sponsored product CPA decreased 7% quarter over quarter, but up about 7% year over year. Sponsored brand ads had a 5.1% decrease quarter over quarter, but dropped to $9.51 in Q1 after hitting a high of $10.02 in Q4.
And then ROAS slightly up year over year, that’s a positive trend. So sponsored produced up 3.4% percent and sponsored brand ROAS up 6% quarter over quarter. Alright, so we’ll head into Walmart, and so what’s new with Walmart. They are making a ton of improvements in their search relevancy algorithm and just in their ad platform in general, they’re attracting a lot more advertising dollars and sellers… That’s a big focus for them. So they did have this requirement where you had to rank within the first 128 organic and grid results to be relevant, and that is something that…
That is no longer the case. So that’s a huge improvement for them, it kind of was a little bit prohibitive for especially new brands that had no relevancy, so that’s a big improvement. The other thing is Walmart right now is a first price bid auction, but a second price bid auction is coming, and a lot of people are excited about that. We saw this happen with Instacart when they went from a first price to second price bid auction, and based on what we saw, there is an improvement in CPCs and ROAS, so expect to see that kind of coming as well, and then they’ve also launched suggested bid words for keywords.
And then in terms of what we’re seeing with Walmart, so Walmarts ad spend was down, but it was a lot less than Amazon’s. Amazon, I think was down 18-20%, and they were down about 9%. So like I said, Walmart has really been significantly focusing on their ad business, Attracting sellers, also they widely rolled out sponsored brand ads as self-serve in August last year, and so there’s more wide adoption of that, and then in terms of what we’re seeing with them…
So its kind of an interesting trend that’s different than Instacart and others. CPC’s increased 14% and ROAS was down. So why? One is sponsored brand ads min is $1 and there is more wide adoption, and so that likely drove CPCs up, there’s more competition. We saw less placements in the first two rows, making it more competitive, so a little bit of a trend here, but still it’s pretty efficient and cheap.
And then we’ll talk about InstaCart really quickly. So Instacart is… They keep us busy with all the launches that they are doing, it’s pretty impressive, so they just recently launched their Instacart platform, which is a suite of enterprise technologies are really almost like a citrus for other retailers, where they’re providing their own technology and ad platform for them. They launch a ton of stuff, so they have their own optimized bidding, they have bid landscapes, they have new capabilities with customer insights, they have Shoppable display pilots, and brand pages pilot, and then they added Lowe’s in a few markets, so kind of expanding outside of grocery. So what happen here in terms of their Q1 spend, so average daily spend was down 9%. OMICRON grew really high spend in Q4 with people going back to ordering a lot online, and then in Q1, a lot of people are returning to stores, so budgets are kinda coming down in Q1, and then the CPCs are coming down and ROAS is coming up, so good trends there, but COVID came back down and most people are back to in-person shopping for groceries, so maybe people doing a little bit less advertising this quarter, on Instacart.
Alright, with that, I’m gonna turn it over to Ben to talk about category insights and data.
Ben
Thanks. Yeah, so we have a few categories that were breaking out today to talk through and… Starting with one that had the highest increase in sponsored display CPC. So you can see here that all the CPC for toys and games have been generally increasing over the last year or so, but Q4, saw a huge jump in CPC, and then it stayed flat, and so instead of coming back down a bit like sponsored brands and sponsored products, we’re still seeing really high CPCs there, and this is kind of a trend that we’re seeing in all categories, just generally sponsored displays, CPCS have gone up. In 2021, it was 20% per quarter, which is really, really rapid increase… Sponsored brands and sponsored products were much slower, but still just a steady increase, and we didn’t see enough of an increase in conversion rate to bring the ROAS up, so ROAS is down a little bit and… Yeah, I think that if you go to the next slide, we’ll see this same kind of trend in beauty where sponsored display just kept going up in 2021 and it’s still fairly high. ROAS hasn’t kept up. Not too much to note in sponsored products or sponsored brands…
And we have one more category. Sporting goods. Yeah, same trend here, a markedly larger decrease in ROAS sponsored display here going from $4.95 to $3.85, that’s pretty stark, and you can attribute a lot of that to just those CPCs staying high at the level that they were in Q4, but obviously, Q4 has a lot of conversion that doesn’t happen in Q1 because of the holidays, and so same CPC, lower conversion led to lower ROAS. Yeah, I’d be curious to know what everyone thinks about sponsored display and where it’s going, and tips to manage these increasing CPCs, ’cause I think that it’s gonna continue going up, Amazon still adding a lot of features and they have their sights set high for this ad product and as it converges on what DSP offers…
Destaney
Yeah, I think the biggest call as mentioned is the DSP aspect, when you don’t have to pay a minimum to start utilizing Amazon’s Display Network, I think we’re finally seeing a much broader adoption of the ad type, I personally almost always see a really high increase in Q4 because I think of window shoppers and being able to show up directly below the Buy Box and control that placement with product targeting always does incredibly well, adding lifestyle images, the exciting announcement of video potentially being ran under sponsored display. I think all of those things are pushing towards more adoption of the ad type, and then on platform, there’s limited placements, it’s almost similar to sponsor brand video, where you just don’t have a lot of ad inventory, so as people are getting exciting and moving into display, but they’re still limited to on-platform placements, I think that is increasing CPC quite a bit. And then all the small things, audience targeting, twitch, all of those really small, exciting rollouts, it’s a thing are probably increasing CPCs as well.
Ben
Yeah, I totally agree. And with all of these increased creative control like video, they are putting a little bit more placements, those favor larger brands, so as more brands spend more on sponsored display it drives up cost for everyone, and clarification from the chat there still is a minimum for DSP, but not for sponsored display. So that’s what’s bringing a lot of third-party sellers who couldn’t meet the $10k or $20k minimum for DSP. A lot of those folks are coming in and starting to use sponsored display. And the early 2021, the adoption was very low, like across the Helium 10 data set, we saw a single, low single-digit percent of adoption, but that’s going up, and so just as people find out about sponsored display and start running campaigns there, CPC’s gonna go up and hopefully with more creative control that I think is gonna come over the following year or two, we can see an increase in conversion rate as well because you’ll have the opportunity to make your ads a little bit more tailored to what everyone’s looking for.
Destaney
It’s also just more upper funnel, other than the direct, the buy box and the bullet points, once you start moving into off-platform, it’s more of an awareness metric, and I think people are more willing to see hired CPCs ’cause they’re used to spending on DSP so it’s just that change in mindset and less purchase intent
Ben
Yeah, that’s absolutely true. And helium 10 we focus more on the smaller sellers, and our advice is not to run display until you’ve maxed out your budget and you can’t see anything else from sponsored products first and then sponsored brands. So it really does favor folks who can come in with a pretty big budget, especially launching a product, if you wanna make a big splash its a good… you kind of wanna blanket all of the ad types, but not everyone can do that, and so… Yeah, it’s definitely challenging as a smaller seller, to use sponsored display effectively, but I’m hoping that a lot of creative control will give us a little bit more performance there.
Melissa
Awesome. Alright, well, thanks, you guys. That was super helpful and informative. We’re gonna do wrap-up and talk a little bit about what’s next and looking forward, so if anyone has not heard Helium 10 has a big sell and scale summit in September, that September 20th. in my favorite city of Las Vegas where I visited twice or Prosper and SOCA and get to go again twice for sale and scale in grocery shop and for this specific week, but Helium 10 has a really exciting line up with Gary V. One of my favorites, Destaney is gonna be there speaking again with us and Pacvue will be there, we’re actually gonna do a big education kind of track there. We have a big focus on education and training and really excited about bringing a lot of that content at this conference, but it’s gonna be a great opportunity for sellers to get together and really kind of learn more about the industry, and then Amazon UnBoxed, which is their Ad conference is going to be back in person in October in New York, and the two things that we’re doing at Pacvue, we’ve heard a lot from brands, and this has been such a pain point for me, which is what Destaney just talked about.
It actually is a lot of work, and thank you to Jeff Cohen if he’s out there because he’s at Amazon now and he is helping us kind of round this up for the quarter, but what are all the things that have happened by retailer… So what are all the things that Amazon, Walmart, Instacart, Target, etcetera, all in one place. And we will be presenting this in these kind of forums, and then I also wanna put a little plug in for our DSP training, so we’ve just launched the most comprehensive training in the industry around DSP. A lot of people really don’t know DSP, actually Destaney, you guys are DSP experts over there at BetterAMS. That’s pretty rare in agencies to know too much about DSP ’cause it’s pretty new, but not only are we focused on providing the best tools, but we really wanna help educate and train the doers, the hands-on keyboards around the latest and greatest best practices, tips and tricks around DSP, you got a cute little certificate that you can tell everyone about. With that, is there anything else? We’re lucky Destaney from BetterAMS will speak. From Wick, of course. But thanks everyone.
Really appreciate… We try to keep these short and sweet. I know we have two minutes early, which is rare, but really thank you to Ben and Destaney if you wanna hear more, we’ll go back, so thanks everyone and download a report, read it, let us know if you have questions, contact us. We’re always here to help. And have a great rest of the Wednesday. Great.
Ben
Thanks everyone. Thanks for attending.
Destaney
Bye guys, thank you.
