Amazon started as online book store and has grown to be the worlds largest online retailer.
Spend on Amazon Advertising up with increased ROI in Q3 2019
Ahead of Amazon’s Q3 2019 earnings release due on the 24th of October Merkle’s latest Q3 2019 Digital Marketing Report (DMR) has been released with interesting insights into spend on Amazon Advertising.
Amazon Sponsored Products spending growth was up 35% in Q3 2019, up from 12% growth a quarter earlier, while sales generated by the format grew 69%. A significant portion of these sales came in over Prime Day, when daily sales were 900% higher than average.
Spending growth for Amazon Sponsored Brands ads also accelerated, coming in 20% higher YoY.
Sponsored Products accounted for 85% of Amazon ad spend in Q3 2019, a slight decline from Q2 2019. Sponsored Brands spend share slipped from 13% in Q2 2019 to 9% in Q3 2019, as Product Display Ad share jumped from 2% to 5% over the same period.
Average ROI for Amazon Sponsored Products ads improved 25% Y/Y in Q3 2019, while ROI for Sponsored Brands ads improved 56%.
The most interesting numbers are perhaps the ROI increases – whilst it’s all too easy for merchants and brands to be almost forced to spend on Amazon Advertising, if ROI continues to grow it becomes almost impossible to justify cutting the cost from the balance sheet. As always, numbers will vary for different retailers so before Q4 kicks in when most retailers will be increasing their spend dramatically, review your numbers and ensure you know what return you are achieving.
Amazon’s own investment in Google ads Amazon also appears to have increased. In the leadup to Prime Day 2019, Amazon’s presence in Google Shopping auctions reached new heights. Although Amazon paused the ads over the two-day event, it returned to capture an even larger share of impressions.
“Our intent with the quarterly Digital Marketing Report is to provide marketers with the tools and resources they need to develop successful and impactful future campaigns. Q3 2019 saw an influx of growth as these platforms continue to evolve and influence the industry in new ways. This positive trend may quell some industry analysts’ concerns of impending recession.”
– Erin Hutchinson, senior vice president of marketing, Merkle
Amazon should start having advertisements on its prime video. 2 minutes of pre roll advertising before each movie or show. That would be a big boost to overall advertising revenue as Prime video has tens of millions of viewers. The more people that cut the cord the more people will join prime video and the more advertising revenue Amazon would generate.
Amazon allowing advertising on its prime video. The revenue generated from that would allow Amazon to increase its spend on making original shows and also pay for broadcasting sports in a big way such as international football.