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.

Explore Our Ecommerce Resource Library

Find relevant content to accelerate your ecommerce business. Stay on top of industry trends and best practices.

Sept 6, 2022

Global Ecommerce Weekly News: 6th September 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon announces new inventory and distribution service, AWD Amazon has launched Amazon Warehousing and Distribution (AWD), providing inventory and distribution services to its sellers as a means of addressing current supply chain issues. AWD is now available for sellers using Fulfilment by Amazon (FBA), i.e. outsourcing their fulfilment to the platform. Amazon has plans to expand the service outside the platform in 2023. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/02/amazon-introduces-new-service-to-help-solve-supply-chain-challenges/) Amazon Web Services (AWS) launches in the UAE AWS, Amazon’s cloud-computing platform offering, has launched its second region in the Middle East and now provides its services in the UAE. The move will now allow anyone in the UAE who utilises cloud technologies to harness AWS’s advanced platforms and APIs. An estimated $11 billion USD is expected to be added to the UAE’s GDP thanks to the implementation, with an average of 6,000 external vendor jobs to be created annually. AWS is now available in 87 zones across 27 regions, with sights set on expanding further across Australia, Canada, India, Israel, New Zealand, Spain, and Switzerland. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/30/amazon-web-services-launches-region-in-uae/) --- Other Marketplace News --- Lazada to launch in Europe Alibaba-owned ecommerce platform Lazada is set to launch in Europe, marking a refreshed internationalisation push from the company. The move follows toughening economic conditions and performance in Southeast Asia, advancing the need to tap overseas markets. In Europe, Lazada will face tough competition from giants like Amazon and Zalando. Lazada’s exact entry strategy is to be confirmed and will be reliant on macroeconomic and market conditions, according to Lazada CEO James Dong. [Read more on DigitalCommerce360](https://www.digitalcommerce360.com/2022/09/01/alibabas-lazada-to-take-on-amazon-zalando-in-europe-push/) Chinese ecommerce giant Pinduoduo to launch cross-border platform in the United States Pinduoduo, a Chinese ecommerce giant rivalling Alibaba and JD, has announced it will be launching a new cross-border ecommerce platform. The marketplace is set to launch in the United States next month, as part of the company’s larger push into new markets. Pinduoduo found success in China thanks to its rock-bottom price offerings and harnessing of social commerce marketing, emulating strategies similar to fast-fashion giant Shein. [Read more on Yahoo Finance](https://uk.finance.yahoo.com/news/pinduoduo-launch-international-e-commerce-034129263.html) Alibaba launches its biggest B2B sales event, ‘Super September’ China ecommerce giant, Alibaba, has now launched its month-long B2B sales event ‘Super September’. The event provides 40 million buyers and 200,000 suppliers with the ability to connect on the platform, showcasing a ‘virtually unlimited’ number of products. The event hopes to foster new cross-border business relationships to tackle supply chain challenges currently faced by businesses. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/01/alibaba-launches-super-september-b2b-sales-event/) --- Other Ecommerce News --- Klarna’s losses quadruple in first half of 2022 BNPL provider, Klarna, has reported losses of $581 million USD for the first half of 2022. This figure is almost four times larger than a year earlier, where $129 million USD in losses were reported. The company attributes the losses to employee costs, technology investments, and rising credit losses. Klarna’s figure reporting comes amidst worsening economic conditions, fresh legal and regulatory scrutiny, and pressure from Big Tech competitors. [Read more on The Financial Times](https://www.ft.com/content/483451db-9221-4ca4-83a6-b4ddc6bfcfbb) [Read more on the Guardian](https://www.theguardian.com/business/2022/aug/31/klarna-losses-more-than-triple-as-consumer-spending-slows) One fifth of Snap employees to be laid off amidst poor financial performance Social media platform Snap (‘Snapchat’) has announced it will be laying off 20% of its employees and closing out a number of projects following a year of poor financial results.The move will see 1,200 employees globally lose their jobs, saving the company an estimated $500 million USD in costs. Snap is currently valued at $20 billion, an 84% decrease from its valuation of $130 billion last year. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/09/01/snap-to-lay-off-20-of-its-workforce-and-wind-down-a-number-of-projects/)
Aug 30, 2022

Global Ecommerce Weekly News: 30th August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon set to shut down Amazon Care Amazon is closing its telehealth service, Amazon Care, which launched in 2019 as a trial program for its headquartered employees. Later the service was rolled out nationwide for employees and other companies. The ecommerce giant has now made the decision to move away from the healthcare space, believing it was not the right long-term solution for its enterprise customers. [Read more on CNBC](https://www.cnbc.com/2022/08/24/amazon-is-shutting-down-amazon-care-telehealth-service.html) Peloton closes new deal to sell on Amazon Following a recent deal, Amazon customers will soon be able to buy Peloton fitness equipment on the marketplace, marking Peleton’s first move outside a direct-to-consumer model. According to Peloton’s CCO, there are already around half a million searches on Amazon for Peloton products every month, despite having no presence on the marketplace. Some key products include the original Peloton Bike, retailing for $1,445 and Peloton Guide for $295. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/24/peloton-strikes-deal-to-sell-fitness-equipment-on-amazon/) --- Other Marketplace News --- 60% of Malaysians are buying from local sellers on Shopee A recent survey of nearly 3,500 respondents found that nearly half of the shoppers prefer to purchase from local sellers due to shorter delivery times. Other shoppers decide to shop locally due to the quality of the products made in Malaysia and an interest in keeping the economy running. As a result, smaller local merchants have been able to grow their businesses, and shoppers benefit from shorter delivery times, products of high quality and supporting local businesses. [Read more on The Malaysian Reserve](https://themalaysianreserve.com/2022/08/25/around-60-malaysians-are-buying-from-local-sellers-on-shopee/) Flipkart’s social commerce platform Shopsy crosses 100 million users Flipkart launched a social commerce arm, Shopsy, in July of last year, which has now surpassed 100 million users, ahead of its target timeline being the end of 2022. This acquisition of new users has made Shopsy one of the largest platforms of its kind in the country, and is expected to onboard a further 100 million by the end of 2023. The platform is centred around boosting local entrepreneurship and powering ecommerce for consumers across tier 2+ regions where users face challenges around trust and navigation when shopping online. [Read more on Business Standard](https://www.business-standard.com/article/companies/flipkart-s-social-commerce-platform-shopsy-hits-100-million-users-1220828006851.html) Meta joins Amazon and Walmart in bid for Indian ecommerce market Amazon mentioned earlier in the year that it would be building a logistics division in-house through its purchase of a 51% stake in Ecom Express, an end-to-end logistics firm, to make ecommerce deliveries more efficient in the country. Walmart operates Flipkart in India and is set to continue its investment in the marketplace. In an effort to compete in the Indian ecommerce market, Meta has partnered with Indian ecommerce company, JioMart, to offer customers a grocery shopping platform within its WhatsApp chat feature. [Read more on Pymnts](https://www.pymnts.com/news/retail/2022/meta-joins-amazon-walmart-indian-ecommerce-market/) --- Other Ecommerce News --- Ecommerce in Spain worth €57.7 billion in 2021 Spanish ecommerce saw 11.7% growth compared to last year, largely attributed to cross-border sales. In the final quarter of 2021, ecommerce sales in Spain were at €16.9 billion euros, at least 60% of which came from cross-border sales. Transactions from foreign locations to Spain generated a turnover of €1.56 billion in Q4, a growth of 27.7% compared to Q4 a year before. [Read more on Ecommerce News](https://ecommercenews.eu/ecommerce-in-spain-was-worth-e57-7-billion-in-2021/)
Aug 23, 2022

Global Ecommerce Weekly News: 23rd August 2022

Get up to date with this week's ecommerce headlines from around the globe. --- Amazon News --- Amazon to add mental health support to primary-care service Amazon is set to move into mental health therapy with its primary-care division, following its recent acquisition deal of One Medical. The plan is to partner with virtual behavioural therapy service, Ginger, to offer its Amazon Care users with on-demand access to mental health services, licensed therapists and psychiatrists. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/11/amazon-plans-to-add-mental-health-support-to-primary-care-service/) GMB union calls for £15 an hour minimum pay at UK Amazon warehouses Amazon recently offered its warehouse workers a 3% pay rise, which in comparison to the June inflation rate of 9.4% left employees disappointed. Following this, hundreds of Amazon warehouse workers stopped work last week, protesting against the minimal pay increase, seeking a minimum of £15 an hour. Recent protests consisting of employee walkouts and sit-ins aim to get a better offer out of Amazon. [Read more on The Guardian](https://www.theguardian.com/technology/2022/aug/09/gmb-calls-for-15-an-hour-minimum-pay-at-amazon-warehouses-in-uk) Amazon third-party sellers have received their first-ever holiday fee hike Amazon’s third-party marketplaces account for close to half of the company’s online sales. The company introduced a 5% fuel and inflation charge to its third-party sellers earlier this year, and has now implemented another inflation increase charge. Commencing 14 October, any seller who uses Amazon’s fulfilment service is subject to the price hike, which is set to be an additional 35 cents per item for products sold in the US and Canada. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/17/amazon-third-party-sellers-have-received-their-first-ever-holiday-fee-hike/) Amazon puts a pause on UK grocery shop roll-out as the cost of living increases Amazon has slowed down on its UK roll-out of till-free Amazon Fresh grocery stores following disappointing sales and the rise in cost of living. Allegedly, the company is no longer looking for potential sites to expand and if more stores are opened, they will likely no longer use a till-free system, as consumers become more cautious about spending. [Read more on The Telegraph](https://www.telegraph.co.uk/business/2022/08/21/amazon-pauses-uk-grocery-shop-roll-out-following-disappointing/) --- Other Marketplace News --- Shopee overtakes Alibaba across international markets Shopee has surpassed Alibaba and taken the top spot for sales outside of China. Singapore-based marketplace saw a year-on-year increase of 51.4% at the end of Q2 of this year, while Alibaba saw a 3% drop during the same time period. This can be seen as a promising development for start-ups and their ability to compete with some of the largest ecommerce giants in the market. [Read more on Exchange Wire](https://www.exchangewire.com/blog/2022/08/18/shopee-surpasses-alibaba-in-international-sales-amazon-searches-for-entertainment-exec/) H&M reopens its official store to Alibaba’s Tmall ecommerce platform It has been nearly 18 months since Alibaba removed H&M from its Tmall platform, following H&M’s criticism of human rights abuses in Xinjiang. It is estimated that over a million people, predominantly minorities in the area, have been unlawfully detained in camps across the city. Brands including Nike, Adidas, Burberry and Converse were swept up in the controversy, however H&M was one of the first to be targeted for speaking out about the issue. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/16/hm-returns-to-alibabas-tmall-platform-16-months-after-xinjiang-controversy/) Klarna launches new feature allowing UK consumers to view full online order history Buy-now-pay-later company, Klarna, has launched a new feature on its shopping app, which allows UK consumers to view their full online order history, regardless of whether they purchased the product using Klarna. The feature also shows delivery tracking and aids consumers in managing their online purchases more conveniently. [Read more on The Industry](https://www.theindustry.fashion/klarna-launches-new-feature-allowing-uk-consumers-to-view-full-online-order-history/) --- Other Ecommerce News --- Online marketplaces responsible for £280 billion business turnover in the UK Nearly 900,000 UK businesses are currently selling on online marketplaces, generating an estimated £282 billion worth of sales each year. This figure represents 6% of the UK’s annual business turnover, highlighting the notable contribution that marketplaces make to the UK economy, along with the potential for further growth in this area. [Read more on Charged Retail](https://www.chargedretail.co.uk/2022/08/09/online-marketplaces-responsible-for-280-billion-business-turnover-in-uk/)