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.

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/)