Amazon Brand Halo Sales from Advertising: How it Works

Tony Morales

September 4, 2020

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.

Elements associated with brand halo on Amazon

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:

  1. Sales that fall outside of the attribution window
  2. Items added to cart but not purchased
  3. Items saved for a later date
  4. Wishlist items
  5. Amazon retargeting
  6. Exposures required to make buying decision
  7. BSR improvement
  8. LTV of acquiring new customers
  9. Preventing lost opportunity in branded search
  10. Off Amazon sales from price checking

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.

Breaking down elements of Amazon brand halo sales

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.

Amazon Brand Halo Sales | Pattern

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.

Amazon wishlist brand halo effect | Pattern

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.

Amazon brand halo sales explained | Pattern

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.

what leads to brand halo on Amazon | Pattern

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.

branded search Amazon brand halo | Pattern

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.

price checking Amazon brand halo effect | Pattern

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.

Calculating Amazon halo sales: What we don’t know

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.

Possible methods of calculating halo sales

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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Slowing Inflation is Music to Consumers’ Ears
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Slowing Inflation is Music to Consumers’ Ears

**Instrument Pricing Changes Tune Amid Record Inflation** Compared to 2022, consumers should expect to pay more for musical instruments, but the rate of inflation shows signs of slowing. **The backstory:** America’s most popular musical instruments saw a notable price increase in 2022 compared to 2021, but the rate of inflation eased in Q4 ’22. **Why it matters:** Slowing inflation within this product category could indicate economic pressures like increased demand, rising labor costs, and supply chain disruptions are easing across the consumer landscape. **What we’re seeing:** The average cost of musical instruments increased 7.5% from 2021 – 2022; however, when analyzing individual increases year over year, some instruments saw price increases as high as 21%. <iframe title="YOY Price Change for Instruments — 2022 vs. 2021" aria-label="Bar Chart" id="datawrapper-chart-02Lwk" src="https://datawrapper.dwcdn.net/02Lwk/2/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="379" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> * Trombones experienced a 21.73% increase compared to 2021 * Trumpets +20.08% * Flutes +18.6% * Recorders +16.13% * Saxophones +13.63% * Clarinets +10.55% * Drums +5.41% * Ukuleles +5.17% **However:** Inflation among these same instruments was significantly less in Q4 ’22 compared to Q4 ’21. In some cases, prices decreased from Q4 ’21 – Q4 ‘22: <iframe title="Price Change for Instruments — Q4 2022 vs. Q4 2021" aria-label="Bar Chart" id="datawrapper-chart-6X6GZ" src="https://datawrapper.dwcdn.net/6X6GZ/2/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="379" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> * Trombones +11.23% * Flutes +10.41% * Saxophones +5.94% * Clarinets +5.59% * Trumpets +3.10% * Recorders +2.85% * Drums -2.59% * Ukuleles -8.46% **Moreover:** Certain instruments saw inflation reverse in 2022. On average, prices for melodicas, guitars, and violas saw their prices decrease by 4.41%, 3.19%, and 0.97%, respectively. <iframe title="YOY Price Change for Instruments — 2022 vs. 2021" aria-label="Bar Chart" id="datawrapper-chart-0Tefk" src="https://datawrapper.dwcdn.net/0Tefk/3/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="259" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> **Diving Deeper:** Inflation was more significant when comparing Q4 ’21 to Q4 ’20 than when comparing Q4 ’22 to Q4 ’21, indicating a slowing down of price increases for consumers. <iframe title="YOY Q4 Price Change for Instruments — 2020 – 2022" aria-label="Stacked Bars" id="datawrapper-chart-p6iqt" src="https://datawrapper.dwcdn.net/p6iqt/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="206" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> * In Q4 ’21, average prices for all instruments were up 8.89% compared to Q4 ’20. * When comparing Q4 ’22 to Q4 ’21, the average price for all instruments only increased by 2.65%. **The takeaway:** While consumers should expect to pay higher prices for instruments this year, overall inflation impact within this product category appears to be slowing down. With National Ukulele Day coming up on February 2, now is a great time for ecommerce brands to take advantage of slowing economic worries and reach new consumers. * Want Pattern’s data science team to power your brand with consumer insights like these? Contact us to [request more information](https://pattern.com/contact-us/) today.

Slowing Inflation? What Musical Instrument Pricing Tells Us
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Slowing Inflation? What Musical Instrument Pricing Tells Us

It’s safe to say consumers and brands alike are eager for a change to the pattern of rising inflation, steadily increasing in many ecommerce categories . Pattern’s internal team’s data scientists analysis of instrument pricing shows a glimmer of hope that inflation may be slowing, which would be great news for brands selling online.

At Pattern, we’re interested in and monitoring trends and news related to pricing since price is a key factor in a brand’s profitability (as explained in the Ecommerce Equation). When brands are able to optimize their price, conversions, and traffic, they can optimize their profitability. And profitability leads to better allocation of resources, better brand control, and gives leaders the ability to expand their presence to new markets worldwide.

YoY Instrument Pricing Increased at a Slower Pace

When analyzing the pricing changes of instruments from 2021 to 2022, our teams found that prices increased, but at a slower rate than from 2020 to 2021.

As shown below, the year over year Q4 changes show quite a lower rate of increase.

Inflation Improvements Raise Profitability

Because inflation impacts online shopping behaviors, lower inflation can lead to better overall profitability for brands. This idea, of course, is nuanced, but Pattern’s Ecommerce Equation can help illustrate the general principle.

When inflation rises, consumers change their spending habits. Shoppers spend more time researching products, forego premium, higher-priced brands, and buy more in bulk. Brands tend to see a loss of loyalty as they’re forced to raise prices.

Price is a key variable in the Ecommerce Equation: price x conversion x traffic = profitability. As inflation lowers, brands can expect better performance in all of these areas—more traffic as spending habits return to normal, higher conversion from returning customers, and price that better fits consumer demand. As inflation lowers and these variables stabilize, brands will see profitability increase.

Raise Your Profitability with Pattern

As an ecommerce accelerator, Pattern is obsessed with gathering data that helps our brand partners succeed. We’ve created best-in-class technology, models, and analytics to understand changes on the horizon and inform our decisions. With an incredible team of data obsessed Pattern employees, we see what makes the difference in truly great ecommerce performance and apply those learnings for brand partners. 

Ready to improve your profitability? Contact us here.

Inflation hits LEGO, but lighter than you’d suspect
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Inflation hits LEGO, but lighter than you’d suspect

**Some sets get more expensive, while others become cheaper** In June 2022, LEGO announced it would be increasing the prices of their sets. Ever since, consumers anticipated their favorite plastic construction toy prices to increase [by as much as 25%](https://9to5toys.com/2022/06/02/lego-officially-confirms-price-increases-coming-to-most-sets-later-this-fall/). **Why it matters:** Consumers are feeling the sting of inflation in all areas of their lives, from groceries and gas to entertainment. With LEGO Day right around the corner (January 28th), fans may wonder whether it’s a good time to purchase a set. **What we’re seeing:** While inflation continues to ravage the economy, consumers are seeing a small reprieve when it comes to the pricing of LEGO sets. Despite the anticipated 25% price increase, average prices among the top LEGO sets only increased by 4.7% year over year when comparing Q4 2022 to Q4 2021. <iframe title="YOY Price Change for All LEGO Sets – 2022 vs. 2021" aria-label="Interactive line chart" id="datawrapper-chart-3gn9L" src="https://datawrapper.dwcdn.net/3gn9L/3/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="393" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> * During this same period, annual prices for some of the most popular LEGO sets were up as much as 23%. <iframe title="U.S. Price Change for LEGO Sets – Q4 22 vs. Q4 21" aria-label="Split Bars" id="datawrapper-chart-vh7B2" src="https://datawrapper.dwcdn.net/vh7B2/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="708" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> **Yes, but:** Prices of other popular sets were down by as much as -12% during this same period. Depending on the kit, consumers might actually find some popular LEGO sets have gotten less expensive since 2021: * LEGO Star Wars Imperial Probe Droid was down -6% in Q4 2022 vs. Q4 2021 * LEGO Creator Tuk Tuk was down -7% * LEGO Star Wars Ultimate Millennium Falcon was down -10% * LEGO Ideas Tree House Business Kit was down -12% **However:** Even for the sets that experienced a price decrease, the decrease was less significant in Q4 2022 as set prices increased across the board following the June 2022 announcement. <iframe title="YOY Price Change for Individual LEGO Sets – 2022 vs. 2021" aria-label="Interactive line chart" id="datawrapper-chart-KjSXz" src="https://datawrapper.dwcdn.net/KjSXz/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="400" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r<t.length;r++){if(t[r].contentWindow===e.source)t[r].style.height=e.data["datawrapper-height"][a]+"px"}}}))}(); </script> **The takeaway:** While prices didn’t increase as much as consumers anticipated, inflation still had an effect on the cost of LEGO sets. As ecommerce brands prepare for increased demand ahead of LEGO Day, they could increase customer interest in all sets by promoting the sets that have seen a price decrease. * Pattern’s data science team analyzes consumer demand on Amazon to understand how economic forces impact pricing and shopping behavior. If you’re interested in using insights like these to propel your ecommerce strategy forward, [contact our team today. ](https://pattern.com/contact-us/)