Amazon and direct-to-consumer aggregators like Heyday, Perch, Acquco, and Thrasio have collectively raised $13.5 billion since March 2020, and that number continues to grow in 2022. These aggregators are a powerful force, scooping up hundreds of private label brands with extra capital and supply chain support on Amazon, Walmart, and other marketplaces, while using large-scale ad tech software and marketing solutions to boost their sales and grow their brands with huge success. We’ve covered why aggregators need tech to scale, but today we’re exploring why organization is so important for aggregators and how managers should approach organizing aggregator portfolios to save time and execute more efficiently & effectively on optimizations.
Why organization is critical for aggregators
Aggregator portfolios usually consist of numerous brands being managed across many different niches and categories. Their teams are managing newly acquired brands, with new team members continuing to be hired as they quickly scale operations.
Every brand acquired by an aggregator has a unique set of strategies and business goals. Staying vigilant about organization to keep up with lots of external factors such as marketplace conditions is very important. Aggregators are highly focused on inventory levels, profitability, and operating margin, so they tend to move fast and react quickly to changes in the eCommerce landscape.
A good example was Q4 promotions: A large Amazon aggregator would assess sell-through, inventory, and margin daily, and would use this to guide their promo and pricing strategy. Keeping this straight across 6 brands, dozens of product categories, and thousands of ASINs would have been impossible without strict organization and one centralized location for the team to store files, maintain promo plans, and share updates (in one large aggregator’s case, the shared Google tracker).
What to consider when organizing various campaigns
- Separate each brand and build out their own campaigns for Branded, Competitive, Category, PAT, and Auto targeting
- Naming rules are important – One aggregator uses three letter abbreviations for each brand. They use this both internally and for campaign naming conventions. They then break campaigns down by Ad Type, Targeting Tactic, and Product Category and/or Subcategory. This allows them to not only manage and apply settings and automation seamlessly, but is critically important for tracking, optimizations, and reporting.
- Use Tags in Pacvue to cluster similar product lines, strategies – Tagging (and leveraging automation settings in general) are hugely important for aggregators. They should not only be using tags but should also be using sub-tags. Over time, this use of automation settings and tech features to help with organization will allow aggregators to spend less time on manual optimizations, and more time on strategy.
How to organize aggregator portfolios using Pacvue to save time and execute more efficiently & effectively on optimizations
As a good starting point, we recommend creating a rule to increase bids on high-ROAS keywords, a rule to lower bids on low-ROAS keywords, and a rule to pause any keywords with at least $X in ad spend but $0 in ad sales over a 14-day period (spend level depends on scale of brand’s budget but we recommend pausing anything over $20 in ad spend with $0 in ad sales). These are now considered baseline rules to leverage for your eCommerce business but are nevertheless critical in controlling CPCs and ROAS.
For more advanced aggregators, we recommend Share of Voice (SOV) bid rules. This requires bidding more aggressively for the #1 slot for hero ASINs on high-volume keywords. We also recommend inventory bid rules (pausing ads for any ASINs with less than 4 weeks of inventory), and rules that automatically harvest high-performing keywords from Auto campaigns and add them into manual, keyword-based campaigns without any manual intervention on a rolling basis.
- Bulk updates – Rules often work better than bulk updates, but if your team does want to make updates in bulk, you should consider leveraging Pacvue’s industry-first Excel integration. Also, Pacvue’s Campaign Tune-up offers a quick, one-shot cleanup of all campaigns and keywords.
- Budget Manager template – We recommend using standard budget pacing in off-season months and our Calendar feature for peak periods like summertime (Prime Day) or Nov/Dec for the holidays. For either scenario, we recommend activating the “Stop Overspend” feature and leveraging tags and sub-tags to split up your budget by category, subcategory, or even ASIN.
What metrics do you optimize against?
At Pacvue, we always aim to conduct analysis that considers dozens of KPIs and metrics, but for many aggregators, ROAS and TROAS will always be critically important (Total ROAS = Total Amazon Sales / Ad Spend). This is different from traditional ROAS (ROAS = Ad Sales / Ad Spend) and gives a good view of how ad spend is driving the total Amazon business, not just ad sales.
We also look at New to Brand (NTB), ACOS, and TACOS (same logic as TROAS above, calculated by Ad Spend / Total Amazon Sales). There are numerous other metrics we look at including CPC, CTR, and Conversion, but we have found that many aggregators care most about ROAS and profitability, especially as it pertains to Total Sales. Finally, we strongly recommend that all of these are assessed at the single-brand level.
Is winning SOV important for aggregators?
Share of Voice tends to be less important for aggregators versus traditional brands that sell on Amazon or Walmart. This is usually because their business model is based on peak efficiency, not necessarily SOV or traditional brand building. However, aggregators should still care about SOV, and should leverage SOV bid rules to boost their top-performing items for high-volume keywords. This will help spin the Amazon Flywheel even faster, and over time as they climb the search rankings, will help them continue to drive sales with less paid search or advertising support.
Organization is the most critical factor in setting up aggregators for success. An extremely organized set of strategies, combined with the power of Pacvue, uncover lots of new opportunities for aggregators to scale their brands quickly and efficiently. Are you an aggregator or seller looking to learn more about how Pacvue can help you reach your goals? Request a demo today and we’ll walk you through our platform and discuss different strategies to help organize campaigns to improve ROAS and set you up for success.