4 Metrics to Consider When Advertising in a New Market

Tana Cofer

August 21, 2020

Are you considering launching your US products on Amazon Canada as well? Great choice! Your brand will then have a larger reach on the Amazon marketplace, and in return, you will see more sales from new customers.

Canada’s population size is roughly 10% of the United States’, leading most Amazon sellers to expect their total Canadian sales to amount to at least 10% of their US sales. Other sellers claim that due to less competition, their sales are actually much higher than 10%, and Canada is quickly becoming a channel of focus.

Yes, 10% is a great benchmark to have in year 1. You have 0 reviews, 0 relevancy on the platform, and your listings will naturally be pretty far down the search results page of the keywords you want to serve on . . . most likely on page 3+.

However, you can see your products hit page 1 and your sales increase the 10% projection very quickly if you choose to advertise.

There are 4 important things you need to consider when attempting a new marketing strategy: Potential search volume, your cost, sales, and RoAS (return on ad spend).

1. Search Volume

Amazon keeps their data very secure. They give advertisers insight into what consumers are searching, but we don’t actually see how many people searched the term and didn’t see our ad or click.

We can assume that Canada has more search volume for slippers and winter jackets due to the climate. However, we do not have access to the data needed to prove this.

Here is what we do know.

In Amazon US, there are just over 4,000 search results for the term, “Slippers for Women.”

Amazon Search Volume Comparison Example | Pattern

This tells us there are 4,000 listings for slippers, so if we wanted to sell slippers or advertise our pair, we have 4,000 competitor ASINS.

In Amazon CA, however, there are over 100,000 search results for the same term, “Slippers for Women.”

Amazon CA Search Volume Comparison Example | Pattern

Advertising on Amazon US may be cheaper for a brand that sells slippers due to the lower search results and fewer competitors, but the opportunity for increased sales, awareness, and overall success is far greater on Amazon CA. There are so many more options for a consumer and the fact that there are so many competitors on the platform tells us that there is increased opportunity there.

Now, we expected a higher search volume for slippers in Canada. But there are many keywords that have more search results in Amazon CA compared to Amazon US. These may shock you.

Keyword Number of US Search Results Number of CA Search Results
Baby Monitor 4,000 40,000
Bomber Jacket 3,000 20,000
Wine Glasses 10,000 50,000
Headlight bulb 6,000 20,000

There are many searches that do not see large increases across all platforms. Here are a few examples of that.

Keyword Number of US Search Results Number of CA Search Results
Zinc supplements 3,000 2,000
Green tea 9,000 7,000
Protein Powder for Weight Loss 3,000 1,000
Light skin foundation 10,000 3,000

Before pitching Amazon Advertising, be sure to look at the number of current products offered. This can help you determine if there is enough volume to warrant a full funnel ad strategy, or just a few small campaigns to increase organic momentum.

2. Advertising Costs

Let’s talk about the differing costs in the US verses CA.

Amazon is a CPC model. This stands for Cost Per Click. This means that you are only paying to advertise if a consumer clicks on the ad. An upside to advertising in Canada is that, overall, the market is less saturated. Less population in the country and less adapters to the platform make it less saturated. This in return leads to cheaper costs per click because less people are bidding on the keywords.

Now, are Canada keywords really cheaper? Here is an example as of August 4th, 2020. Here are the cost comparisons of keywords in the US verses CA. (CA dollars are converted into US currency for equal comparison.)

Keyword US CA (converted into US currency)
Zinc picolinate $1.28 $0.83
Feetures socks women $4.12 $0.47
Black popsocket $0.51 $0.38
Baby Shoes $0.94 $0.80
Organic Turmeric Curcumin $1.41 $0.29
Detox tea bags $0.87 $0.39

If you are first launching your products in this market, you may see high CPC’s in the beginning. This will decrease over time as you show more relevancy on the keywords you are bidding and you start getting reviews and sales at a faster rate.

3. Advertising Sales

We tend to pitch new advertising initiatives through the lens of projected sales and RoAS (return on ad spend). Now, there are many reasons why these aren’t the only metrics we should be looking at. However, for the initial pitch of the platform, I understand why we are asked this question.

Just doing some simple math on the keywords shared above with some internal data we have about click to conversion rate, here is what the estimated sales and return on ad spend looks like for each market:

Keyword US CPC Click to Conversion Average price point US Cost of Sale (CPC*clicks) US RoAS (Sale/cost)
Zinc picolinate $1.28 7 $17.87 $8.96 $1.99
Feetures socks women $4.12 5 $17.08 $20.60 $0.83
Black popsocket $0.51 7.4 $13.98 $3.77 $3.70
Baby Shoes $0.94 10 $23.27 $9.40 $2.48
Organic Turmeric Curcumin $1.41 7 $22.41 $9.87 $2.27
Detox tea bags $0.87 5 $15.74 $4.35 $3.62

Taking the same clicks to conversion and making that our baseline, but adjusting the price point to mirror the average price point in CA and adjusting the CPC to be in CA dollars, here is what we get.

Keyword CA CPC Click to Conversion Average price point CA Cost of Sale (CPC*clicks) CA RoAS (Sale/cost)
Zinc picolinate $1.10 7 $23.03 $7.70 $2.99
Feetures socks women $0.62 5 $24.33 $3.10 $7.85
Black popsocket $0.50 7.4 $11.93 $3.70 $3.22
Baby Shoes $1.06 10 $25.00 $10.60 $2.36
Organic Turmeric Curcumin $0.38 7 $22.77 $2.66 $8.56
Detox tea bags $0.52 5 $14.76 $2.60 $5.68

4. RoAS

Comparing Each RoAS to each other, here is what we get side by side.

Keyword US RoAS (Sale/cost) CA RoAS (Sale/cost)
Zinc picolinate $1.99 $2.99
Feetures socks women $0.83 $7.85
Black popsocket $3.70 $3.22
Baby Shoes $2.48 $2.36
Organic Turmeric Curcumin $2.27 $8.56
Detox tea bags $3.62 $5.68

You can see that for each keyword listed, your RoAS is higher, indicating that there is a larger opportunity for efficient spending in Canada.

Overall, with your selling price being higher in Canada, and your cost for each click being cheaper, you have the potential to have a higher RoAS. This allows you to have a more efficient campaign, thus allowing your ads to place on ‘top of search’ placement more often. This will then increase the potential for more sales on your products and increase your organic page rank.

You can settle for a goal of 10% of sales, or you can set a higher standard and advertise on Amazon CA.

If you want to learn more about advertising on Amazon, check out other other blogs on the topic here. If you’re interested in working with Pattern’s advertising team, contact us below.

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Global Ecommerce Weekly News: 27th September 2022
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Global Ecommerce Weekly News: 27th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon drives renewable energy push with 71 new projects Amazon is planning to add 2.7 gigawatts of clean energy capacity through a couple of new projects as the company attempts to use 100% renewable energy by 2025. The ecommerce business will soon have a total of 329 renewable energy projects, generating 50,000 gigawatt hours of clean energy, which is equivalent to powering 4.6 million US homes every year. [Read more on Reuters](https://www.reuters.com/business/sustainable-business/amazon-drives-renewable-energy-push-with-71-new-projects-2022-09-21/) Amazon launches Prime Early Access Sale Amazon is launching a new 2-day shopping event for its Prime members only, beginning on the 11th of October. Across 15 countries, Prime customers will have access to the shopping event, with thousands of deals on offer globall, ranging from fashion to electronics to essentials. The event has the purpose of giving Prime users the chance to spread the cost of items over the winter months, 6 weeks ahead of Black Friday. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/26/prime-early-access-sale/) --- Other Marketplace News --- Shopify unveils new localisation tool Shopify is launching a new localisation tool, called Translate & Adapt, which works with Shopify Markets to offer localisation for sellers who are looking to expand into new markets. The tool translates a user’s online store into different languages, including product pages and information pages. Merchants are also able to create different shipping terms for each market using the new tool, which allows international expansion and offers a more localised consumer experience, unveiling new potential. [Read more on Ecommerce News](https://ecommercenews.eu/shopify-launches-new-localisation-tool/) Etsy is set to invest hundreds of millions into its marketing platform Etsy CEO claims that the company is on route to spend more than $570 million USD on marketing this year. Even during a time of macroeconomic pressure, inflation and rising interest rates, the company is preparing itself and its sellers for the upcoming holiday season and is focused on retaining interest from buyers. [Read more on Yahoo News](https://uk.news.yahoo.com/etsy-600-million-on-marketing-ceo-154054219.html) --- Other Ecommerce News --- Meta looks to cut costs by 10% in the coming months Meta employees are facing job redundancies as the company plans to cut its costs by 10% over the next few months. Meta reported a 22% YoY increase in costs and expenses, totalling over $20 billion USD. The cuts are expected to come in the form of job redundancies as a result of department reorganisations rather than formal layoffs. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/22/meta-to-slash-costs-by-10-over-coming-months/) DHL teams up with Quadient to offer smart locker deliveries in the UK DHL and tech company, Quadient, have partnered to offer smart lockers parcel pick-up throughout the UK. The new contactless, secure locker stations will give recipients more choice and flexibility to receive their parcels at a time and location best suited to them. The partnership plans to install 500 locker stations across the country by the end of 2022. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/21/dhl-partners-with-quadient-to-offer-smart-locker-delivery/) The online fashion market is set to be worth nearly $170 billion USD in 2025 The European online fashion retail market is set to grow 50% by 2025, with an online turnover of $170 billion USD, which is 33% of the retail branch’s total. Cross-border marketplaces prove to be the largest drivers of this growth, with online websites and apps like Vinted largely pushing the market’s online growth. Zalando recently became the largest cross-border fashion retailer/marketplace, responsible for 11.7% of the online market’s share. [Read more on Ecommerce News](https://ecommercenews.eu/online-fashion-market-worth-e175-billion-in-2025/)

Global Ecommerce: Weekly News (20th September 2022)
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Global Ecommerce Weekly News: 20th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to raise pay and add extra work benefits for delivery drivers Following the rise in fuel prices and protests by Amazon workers, the ecommerce giant is raising its delivery drivers’ pay and adding more work benefits. Amazon has mentioned that it will be investing $450 million into rate increases along with an education program and a Delivery Service Partners program. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/amazon-to-raise-delivery-drivers-pay-and-add-more-work-benefits/) Amazon announces it will give away shipping software to merchants at no cost Amazon has recently announced that it will be giving ecommerce merchants free software to manage shopper orders on and off its platform as it extends its reach. The ecommerce giant will be ending monthly costs for sellers using Veeqo, a shipping software it recently acquired and instead offer to them a new, free shipping software. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/amazon-to-give-away-shipping-software-to-merchants/) --- Other Marketplace News --- Walmart unveils new virtual fitting rooms In an effort to drive clothing sales, Walmart has launched virtual fitting rooms while competitors reduce spending amid the cost of living crisis. The virtual try-on tool can be used by Walmart customers to virtually measure the clothing items and see how the products would look on them. Shoppers will now be able to see how over 270,000 clothing items on Walmart’s ecommerce site would look on their bodies. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/walmart-launches-virtual-fitting-rooms-to-drive-clothing-sales/?utmsource=Retail+Gazette+Subscribers&utmcampaign=2da7f0f8f8-EMAILCAMPAIGN202209150742&utmmedium=email&utmterm=0d23e2768b6-2da7f0f8f8-61040615) THG slashes sales and profit expectations The Hut Group has slashed its forecasts for 2022 as rising interest rates, inflation and energy costs take a toll on consumers. Previously, THG estimated its sales growth to be between 22-25% but after a recent evaluation, has lowered this prediction to between 10-15%. Initial predictions did not take into account the negative effects of ceasing sales in Russia and Ukraine along with the impact that the cost-of-living has had on consumer spending. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/15/thg-slashes-forecast-as-cost-of-living-crisis-hits-consumers-wallets/) --- Other Ecommerce News --- DHL and Post Office team up to provide click and collect services Through a partnership between delivery company, DHL and Post Office, a new click and collect service is to be tested at Post Offices before rolling out to over 1000 branches across the UK. Online shoppers will now have the option of choosing their local Post Office as a collection point, and DHL will fulfil the delivery aspect, opening up networks for both parties. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/14/post-office-partners-with-dhl-express-to-provide-click-and-collect-services/) US consumer watchdog plans to further regulate the BNPL sector The US Consumer Financial Protection Bureau (CFPB) has raised concerns regarding the collection of consumer data and the fast-growing nature of the BNPL sector, which includes companies such as Affirm and Klarna. The CFPB is worried that these companies could be negatively impacting consumers’ financial health and aims to put better regulations in place to ensure consumers are safe and empowered. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/16/us-consumer-watchdog-to-start-regulating-bnpl-sector/) Japanese ecommerce market estimated to grow by 6.9% in 2022 The ecommerce market in Japan, largely dominated by domestic online retailers including Reakuten and Mercari, is set to reach $194.3 billion USD in 2022, after seeing an annual compound growth rate of 5.2% between 2018 and 2021. This makes Japan the fourth leading ecommerce market globally, following China, the US, and the UK. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/13/japan-ecommerce-market-to-grow-by-6-9-in-2022/) Ecommerce brands are spending more on TikTok ads TikTok may soon be surpassing Facebook and Google as the most lucrative advertising channel, with ecommerce brands spending 60% more on TikTok ads in Q2. Facebook is still ahead as the top choice for ecommerce advertisers but only grew by 5.6% from Q1, while Google grew 20.5% in Q2, and Snap declined 10.8% in Q2. [Read more on SearchEngineLand](https://searchengineland.com/ecommerce-brands-spent-60-more-on-tiktok-ads-in-q2-387876)

Global Ecommerce: Weekly News (13th September 2022)
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Global Ecommerce Weekly News: 13th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon scales back on US warehouse facilities Amazon is shutting down two facilities with 300 employees, discarding plans for 42 facilities, and delaying plans to open a further 21 buildings across the US. The ecommerce giant is scaling back on hiring as well as the expansion of its vast delivery network, as it was left with an excess of space following its rapid expansion during the pandemic. [Read more on Business Insider](https://www.businessinsider.com/amazon-closes-2-facilities-scraps-plans-42-new-buildings-report-2022-9?r=US&IR=T) --- Other Marketplace News --- JD.com is ‘betting’ on ecommerce grocery market Amidst a slowing economy and a decline in ecommerce, Chinese ecommerce giant JD.com has increased its urgency to seek new growth engines. The company is looking to boost its online grocery business through offline partnerships and expansion into lower-tier cities, where it may be able to unleash more consumption power. [Read more on The Star](https://www.thestar.com.my/tech/tech-news/2022/09/08/chinese-ecommerce-giant-jdcom-bets-big-on-online-grocery-lower-tier-markets-amid-slowing-economy) Shopee shuts operations in Argentina, Chile, Colombia, and Mexico Sea’s ecommerce arm, Shopee, has shut local operations in some LATAM countries but will continue to maintain cross-border operations in a few markets. Latin America is Sea’s most important region following South-east Asia, accounting for close to 19% of its revenue in 2021. The move away from these countries is largely due to increased levels of macro uncertainty and rising interest and inflation rates, and rather putting a focus on its core operations. [Read more on Straits Times](https://www.straitstimes.com/business/companies-markets/seas-shopee-shuts-operations-in-argentina-chile-colombia-mexico-sources) --- Other Ecommerce News --- Instagram scales back in-stream shopping elements Instagram is re-examining its approach as it hasn’t been able to make ‘fetch’ happen. ‘Fetch’ in this context being the online shopping trends which have become all-consuming in China, and what Western social platforms have been hoping to add into their apps to make them more addictive and revenue-generating. Consumers have not been swayed by the latest shopping tools on TikTok and Instagram, leading to Instagram scaling back its in-stream shopping program. [Read more on SocialMediaToday](https://www.socialmediatoday.com/news/instagram-scales-back-in-stream-shopping-elements-as-it-re-examines-its-app/631276/) FedEx Express supporting the growth of cross border ecommerce FedEx express has expanded its international commerce shipping service to four more markets across the Asia Pacific, Middle East and Africa (AMEA) region in an effort to support the strong development of ecommerce in this region. Three of the fastest growing markets, the Philippines, Indonesia and Vietnam are leading Southeast Asia’s ecommerce sales, which is set to reach $100 billion by 2023. [Read more on Post & Parcel](https://postandparcel.info/149889/news/e-commerce/fedex-express-supports-the-growth-of-cross-border-e-commerce-within-the-amea-region/) India ramps up hiring as companies prepare for shoppers Ecommerce companies are getting ready for the festive season by rapidly expanding their temporary workforce. As ecommerce in India grows, the country is predicted to have 372 million online shoppers by the end of 2022. The festive season this year, running from October to December, is expected to see a two-fold increase in logistics and delivery alone. During this period, companies are predicted to add 20% more to their existing workforce base, with a 8-10% higher pay scale compared to last year. [Read more on Business Insider India](https://www.businessinsider.in/business/ecommerce/news/the-great-indian-festival-of-hiring-e-commerce-companies-gear-up-for-indias-shoppers/articleshow/94000346.cms)