There are several factors that play into the Amazon incrementality equation that lead to Amazon Brand Halo sales. Unfortunately, Amazon keeps all this data confidential. While we can intelligently assume (given these factors) that there is a brand halo effect, it is incredibly difficult to estimate what that is for a given brand.
Amazon halo sales are additional sales on products that you aren't actively advertising for on Amazon that can be attributed to the advertising that you are running for other products. Simple, right? Let's dig deeper into the elements that lead to brand halo sales for some more context.
While it’s not black and white which pieces of the puzzle lead to a halo effect, below are the most common elements I would associate with Amazon’s advertising halo:
ROAS, or Return on Ad Spend, relies on a very simple formula for calculating the financial benefit of advertising campaigns: Revenue / Cost. It is simple, digestible, and one of the best ways to measure ad performance. That said, it does not provide a complete picture of the advertising results.
Calculating incrementality can be a bit of a science experiment. I like to think of Amazon Advertising Incrementality as the compound interest of constant visibility and increased sales velocity provided by advertising on Amazon.
Let’s look at the 10 aforementioned incrementality factors in an effort to add more color to this concept.
1. Sales that fall outside of the attribution window There are often times shoppers will add an item to the cart and not click the buy button. I am guilty of doing this on a regular basis—I find something that I like but I simply sit on it for a period of time before actually making the purchase.
2. Items added to cart but not purchased There could be several reasons why an item is left in the vertical cart. It could be the timing of the necessity for the item, maybe it is a gift for a birthday or other event, and it is being saved for the future. Maybe the shopper is waiting to see if there is going to be a coupon or a price reduction.
3. Items saved for a later date I often find items that I would like to buy as a gift for a holiday or a recent past birthday and end up saving items for more appropriate timing.
4. Wishlist items Many people in the Amazon create wish lists and a variety of other lists where they shop for items and save them for a future purchase date. Personally, I collect chess sets, and I know that I often have a long wish list of things like chess sets or camping gear or nostalgic trinkets that I want one day, but don’t necessarily feel like buying immediately.
5. Amazon retargeting Every time we look at an item on Amazon and choose not to buy it, Amazon has an algorithm where they resurface those items to us. You may have been browsing and looking at the detail pages of several items, and you will notice the next handful of times that you login to Amazon (whether it be on your desktop or mobile device) you will see Amazon showcasing these items near the top of the home screen and prompting you to pick up where you left off and reminding you that you may have forgot them.
6. Exposures required to make buying decision It has been widely estimated that it can take between 6 to 20 exposures before a shopper makes a purchasing decision, especially if this is a new product or if the shopper is unfamiliar with your brand. Initial ads that may not have converted are simply laying the foundation for the shopper to receive the right amount of exposures before they feel comfortable making the decision to buy.
7. BSR improvement Amazon best seller rank is something that is very important to each item sold on Amazon. As the best seller rank improves, the organic placement of the item improves, giving it more exposure to a large array of shoppers.
If the BSR improves in such a way that an item previously ranking on page 7 suddenly shows up on page 2, there is a much broader customer base that will see that item. If the Improved sales velocity from advertising is able to impact the item in such a way that it can organically be placed on the first page of search results or even within the top 20 items, there will be a dramatic improvement in organic sales that go straight to the top line at no cost to the advertiser.
8. LTV of acquiring new customers Acquiring new customers is important for any business, and repeat purchases help to maintain brand health. Advertising can operate in such a way that it reminds existing customers that they need to make a repeat purchase when they were planning to do it but just needed an extra nudge to get it done. Also, by exposing the brand to new customers, every new customer will have a lifetime value associated with them and they will potentially make future purchases without being prompted by a paid advertisement.
9. Preventing lost opportunity in branded search There’s good data showing that most customers who do branded searches will most likely purchase the brand they are searching for at some point. One big mistake some Amazon advertisers make is to lose a sale that was going to go your way to an item that may be slightly lower priced or have more reviews. There is an advertising effect to preventing this from happening and keeping the sales that were meant to go your way.
10. Off Amazon sales from price checking It has been reported that more than 60% of product searches happen on Amazon first. Oftentimes shoppers may be in a brick and mortar retail establishment and using Amazon to do a price check on an item (this is called showrooming, read more on that here). Making sure that your item is present and discoverable may help a shopper to make a purchasing decision and increase the revenue for your brand even if that sale occurs off Amazon itself.
There is also the case where a shopper may be in a brick and mortar retail establishment and discover that your Amazon price is cheaper than the in-store price or the store may be out of stock on the item they were looking for and they’re able to make the purchase on Amazon while they’re walking back to their car.
Trying to calculate incremental lift for all these components is very difficult because Amazon does not provide any insight about sales that fall outside of the attribution window or what percentage of the time that happens.
For example, we do not have any information about how long the average item stays inside of the shopper's cart before it’s purchased or how many items get removed or how many items live in a cart beyond the average time. We do not know how many Prime members have a wish list or how many items are on those wish lists. We do not know the success rate of Amazon’s retargeting efforts; we just know that it must work to some degree, or Amazon would not take the time to do it. We do not know the average number of exposures for each brand that it takes for a shopper to decide.
It is very difficult to correlate the organic sales left to BSR improvement. This is something that can actually be done by looking at BSR and page rank and sales over time, but it will take quite a bit of calculation. Amazon does not provide any information about search volume, so it is difficult to know how often you’re winning your own branded words and there are also no alerts on if you’re being conquested by a competitor. We also have no way of speculating the number of shoppers that are doing price checking from in-store or a different location and what the shoppers purchase intent is. We do know intuitively that all these factors are at play and definitely improve the overall lift of advertising.
The biggest benefit of incrementality will come from the increased sales velocity affecting the Amazon algorithm to provide your items with better organic placement, thus increasing the size of the organic slice of the sales pie chart.
Without the ability to put reliable inputs into the equation the brand halo of Amazon advertising is really a guess. I would speculate that depending on the amount someone is investing, what ad products they are using, what part of the sales funnel they are focusing on, and the size of their catalog, the halo effect could be anywhere from 5% to 60% lift over a 12 month period.
Products with a higher price point will see a larger halo benefit from extended advertising. Products and brands that are in the launch phase or the early stage of the product life cycle will see a larger halo left in the short run versus well-established brands.
You can do experiments such as turning your advertising off for a period of time and seeing how topline sales drop. You would probably want to do this for longer than a month just to see the extended effect of not running any ads. If you’ve been selling for a long time without advertising, you should have a good organic baseline and you could theoretically measure incrementality by beginning to advertise and taking your new total sales number and subtracting your advertised sales and your previous organic sales to see what the difference is.
Pattern’s Amazon advertising experts help our brands grow online. Want to learn how we do it? Reach out to us to schedule a demo.
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Peak season is almost upon us and with all signs pointing to it starting earlier than ever, with Christmas gifting searches now ramping up in August and September, it’s time to start preparing for peak. In this article, we’re sharing our top five tips for planning and preparing for peak season with Google Ads and the strategies required to get your Paid Search ready so you can drive success over this crucial period.
In 2021, gifting search terms started increasing in popularity in August. The general trend is that people are looking, researching and weighing their options early, so it’s best to start your Paid activity early to ensure that you’re capturing that early research traffic. This will help drive revenue alongside aiding those consumers who are in their research phase.
From 2020 to 2021, spend during Cyber Week actually only rose 2% but in the weeks leading up to it, it increased by 16%. However, Cyber Week is still the biggest period during the latter half of the year, accounting for 23% of all online spend by consumers over peak. Being prepared and starting early will help you to maximise your time during this period.
According to Google, 48% of global consumers have stopped buying or using a service due to privacy concerns. Privacy is front of mind when consumers are shopping online and we know that Google is phasing out 3rd party cookies in 2023. This is going to make it much harder to track users online and it’s something that brands need to think about this now – waiting isn’t an option.
From a Google Ads point of view, you want to ensure you have set up the Google Ads tag across your site and have enabled ‘Enhanced Conversions’, which ensures all conversions are tracked and allows you to monitor other actions such as ‘Add to Cart.’ This is relatively easy to set up, especially if you use ‘Google Tag Manager’.
It’s also vitally important that you build up your first-party data during this time as this is data you own and it can be used when targeting consumers that have provided your brand with their email address. Pattern’s own experience shows that by segmenting and using first-party data, you can see a 10% improvement in revenue and ROI.
A full-funnel approach is now more important than ever as consumers become more discerning and have more choices than ever of where to shop.
Pattern has seen success with Google Ads’ ‘Discovery Campaigns’ (image-based ads that appear on Google platforms such as Gmail and the Google app), which have driven success both from a traffic and revenue perspective.
The performance of these campaigns is significantly enhanced by adopting a segmented and nuanced approach to first-party data and incorporating these into your campaigns. Other options for a full-funnel approach include YouTube and testing bidding on keywords that are more representative of the research phase. (e.g. ‘best baby clothes’ for a baby clothes brand)
Earlier this year, Google announced that they were moving away from Smart Shopping and launched Performance Max. This is a new campaign type that incorporates features and placements from Smart Shopping but expands them onto other platforms such as Gmail but also alternative creative options, such as images and videos.
Since Google has already started automatically upgrading Smart Shopping campaigns to Performance Max, expect to see some fluctuations in the first 2 weeks following the switch over but results generally seem positive. We recommend upgrading sooner rather than later to limit any potential impact to peak period.
Peak period will be even more competitive than in 2021 and you’ll need your budgets to support this period, we recommend boosting budgets in October to start capturing that early peak traffic. As we enter November and the Cyber Period, start early and make sure you are capturing those consumers looking for early bargains, ensuring you are being nimble in your optimisations and reacting to the data that you are seeing.
Overall, peak period is vital to help drive your sales and by preparing early, you will see strong results and drive success for your brand. If you want to discuss how your brand can navigate this next peak period, contact us to discuss your options with our performance team now.
Entering the ecommerce landscape is a huge undertaking for any brand—it usually requires a large investment in resources and expertise to really be successful. Any brand can quickly get in over their heads trying to navigate the nuances of SEO, fulfillment and logistics, distribution control, listing optimization, and meeting the numerous other requirements and administrative tasks to show up well on marketplaces.
Unfortunately, because it’s so easy for third party, gray market, and unauthorized sellers to obtain and sell products online, many brands find themselves pressured to execute an ecommerce plan without the right resources to succeed on marketplaces and their other channels.
So, for brands looking to enter the ecommerce space or improve their current and future performance, it makes sense to partner with an ecommerce consultant.
Pattern’s global presence and proven success with hundreds of brands has allowed us to develop highly effective ecommerce consulting services. We can guide your brand to navigate issues both large and small in marketplaces worldwide. To maximize your ecommerce efforts, you’ll need to understand what an ecommerce consultant does and how to select one who drives the right value for your brand and products.
An ecommerce consultant is a specialist in the ecommerce space who can give you personalized guidance on how to market your products and grow their presence on digital marketplaces.
An ecommerce consultant should be able to analyze your brand, audience, category, opportunity, and current roadblocks and help you understand how to utilize your resources (or what resources are missing) to be most effective in capturing your opportunities in the ecommerce space.
Not sure how to evaluate a consultant? Here are 4 key attributes to look for as you make your choice.
At Pattern, we prioritize brand obsession for a reason—we know that a brand-centered mindset makes a crucial difference in the outcomes and results our partners achieve. So in our experience, when you begin your search for an ecommerce consultant, it’s important to look for a partner who is specialized in ecommerce, invested in the product, and passionate about helping brands build and improve their strategies. Typically, this means finding someone that consults exclusively for ecommerce marketplaces, rather than choosing a consultant who offers many different services.
It’s also important to avoid choosing a consulting partner who can’t deliver the right experience for your brand. The best indication of whether your potential consultant can do that is to review their history, data, and results with other brands. Ask if they’ve helped others in your selling category, if they’ve solved specific issues your brand is facing, and why they feel you are a good fit. The key is to leave the conversation feeling confident that you understand your consultants’ capabilities and whether or not they match up with your needs.
It’s best to pick a consultant who knows how to guide a brand onto and through multiple marketplaces worldwide. You’ll want to take a look at your long-term strategy and think about the regions and platforms you’re currently on and where you might want to take your brand in the future. If your consultant is truly great at what they do, they’ll be able to help you perform well enough with your current product roadmap that it’ll be a no-brainer to expand your presence at the right time.
The most effective partnership with an ecommerce consultant will be able to give you both recommendations and point you to solutions for making those changes in your planning, processes, and execution. Your time and money is valuable, so you want to make sure that you’re spending it as efficiently as possible as you follow your consultant’s advice. So, before you commit to an ecommerce consultant, ask about the resources and concrete solutions they typically recommend to the brands they work with.
Finding an ecommerce consultant that checks the boxes can be a difficult task. At Pattern, our entire focus and drive centers around giving brands the tools and resources they need to succeed on domestic and international ecommerce marketplaces.
With over 100 global ecommerce consultants across 10 global offices, we have the right tools to partner with brands across the world to achieve better ecommerce success. We give specialized advice, then make sure our partners have all the adequate SEO, social media, CRM, Amazon multi-channel fulfillment services, and ecommerce outsourcing services they need.
Interested in ecommerce consulting services? Set up a call here to learn what Pattern can do for your brand on global marketplaces.