The first quarter of 2023 brought a cautious start for both companies and consumers, with financial conservatism and purposeful spending behaviors prevailing over the top advertising trends observed.
To drive growth in a challenging retail media landscape, brands and agencies are looking for trending industry insights that can help guide their near-term strategies. We recently published our quarterly CPC report and hosted a webinar detailing Pacvue’s comprehensive research in Q1 advertising performance for Amazon, Walmart, and Instacart Ads.
Q1 Performance Trends:
- CPC for Amazon Sponsored Products and Brands ads fell QoQ and YoY.
- Diverging CTR trends for Amazon’s Sponsored Products (increasing) and Sponsored Brands (decreasing).
- Walmart Sponsored Ads CTR significantly increased YoY.
- Instacart Sponsored Ads ROAS increased QoQ and YoY.
Watch the full webinar here:
Key Takeaways
The decrease in cost-per-click (CPC) for Amazon Sponsored Products and Brands ads between Q4 2022 and Q1 2023 was expected due to the post-holiday shopping season.
Despite a pullback in ad spending during Q1 2023 caused by rising inflation, some brands increased their budgets in March, demonstrating confidence in the economy and a willingness to invest in advertising. This shift could lead to more strategic and targeted campaigns, and as the economy stabilizes, more opportunities for brands to connect with audiences.
Amazon’s CTR Divergence
Amazon’s Sponsored Products and Sponsored Brands have experienced diverging CTR trends, with Sponsored Products increasing and Sponsored Brands decreasing. In addition to more conservative budgets due to macroeconomic considerations in the market, brands have been opting for more intentional and focused ad strategies, such as investing in Sponsored Products ads over Sponsored Brands, hence the divergence in CTR.
Walmart Growth in CTRs and ROAS
Walmart Connect Sponsored Ads have shown remarkable growth in CTR and ROAS, indicating a strong upward trend for the platform. Back in June 2022, Walmart Connect changed to a second-price auction and made changes to search relevancy, ultimately leading to reduced costs and increased brand awareness for advertisers on the platform, which led to Walmart Sponsored Ads CTR increasing significantly YoY.
Instacart ROAS Up for Three-Straight Quarters
Meanwhile, benchmark data for Instacart Sponsored Ads shows promising signs with ROAS increasing QoQ and YoY. Instacart Sponsored Ads have seen an increase in ROAS after three consecutive quarters of decline, suggesting an opportunity to improve ad efficiency on the platform.
Overall, things for brands advertising on Instacart continue to perform well, and we’re seeing it across most core metrics – costs down, ROAS up – new capabilities that are public will be rolling out soon with display and video APIs further adding to tailwinds for the platform.
What’s New Across Platforms?
As always, retail media platforms are constantly evolving. Here’s a quick recap of some of the shifts that impacted results in Q1 of 2023:
Amazon
- Amazon’s European Expansion Accelerator (EEA) program is streamlining entry into new markets abroad, making it easier to navigate logistical hurdles, boost sales, and connect with millions of new-to-brand consumers in nine Amazon marketplaces in Europe and the UK.
- Amazon Marketing Cloud (AMC) Sizmek Ad Suite integration lets advertisers measure cross-channel conversions and take action on game-changing data to uncover new opportunities.
- Amazon Marketing Stream (AMS) expanded to include Sponsored Display in North America.
Walmart
- The text-to-shop feature allows customers to shop via text for items on Walmart.com.
- Display auction provides flexible bidding for more control across self-serve display campaigns.
- WMT Connected TV: Walmart eyes improvements to its CTV capabilities.
Instacart
- The Instacart plug-in for ChatGPT turns recipe-related conversations into instant ingredient orders.
- Shoppable video is now available for all brand partners, seeking rich media creative with in-line shoppable products.
- Instacart Ads is launching 23 health-related tags across 500k+ items to drive healthy consumer choices.
For full insights into Q1 trends, download the full report and start benchmarking your performance on Amazon, Walmart, and Instacart.
Interested in seeing Pacvue in action? Book a demo today and let us show you how we can help your business get a head start on the future.
