Amazon Advertising is Growing
Brands that take advantage of Amazon’s marketing tools can see incredible results. Take this Toys brand, for example:
They hired Kaspien to run Amazon ad campaigns, and we delivered, growing sales nearly $5 million at less than 9% advertising cost of sale (ACOS).
What’s even more impressive is that these type of results are surprisingly attainable – if you have a marketing team that knows what they’re doing and has the right tool for the job. When we run Amazon advertising campaigns, our partners see a 30% increase to total sales on average compared to selling without running Amazon ads.
All this is to say, Amazon PPC is rich with potential for those who are willing to invest in it. Amazon recognized this potential too.
Amazon Advertising Revenue Exceeded $8 Billion
In 2019, Jeff Bezos appointed the SVP of Amazon Advertising to one of his direct reports, signaling a heightened focus on the business. Two years later, Amazon’s Q3 earnings report showed advertising revenue broke $8 billion for the first time ever.
Amazon Holds 10% of Digital Ad Revenue (And Counting)
Amazon’s growing ad revenue coincides with its increasing market share. As of October 2021, Amazon holds a 10% share of all digital ad revenue, 19% of search ad revenue, and 41% of U.S. ecommerce sales.
Consequently, skilled Amazon marketers are in high demand. Washington State University even created an Amazon Advertising program within their Communications department in 2019. It’s one of the first in the nation, but it certainly won’t be the last. Amazon marketers are in growing demand.
Amazon Advertising Cost Fell during the Pandemic
This growth in Amazon’s ad revenue and heightened demand for marketers was driven, in part, by temporarily reduced costs in Amazon advertising.
Based on Kaspien’s data, the average cost-per-click (CPC) for Amazon advertising fell 47% in 2020, year on year. Many Amazon sellers reduced their ad spend amid the market uncertainty, and CPC fell with it. That trend proved to be short lived though. In 2021, more sellers are investing more dollars back into Amazon advertising, raising the average CPC by 26%.
Advertising Cost of Sale (ACOS) on Amazon also Fell
The pandemic had a similar effect on the average ACOS. In 2019, ACOS was rising as competition within the marketplace heated up, climbing 94% year on year. The pandemic contributed to a 52% reduction in average ACOS, which has since climbed up 5% in 2021.
Demands on Amazon Marketers are Growing
All of this data shows us that Amazon advertising is a booming industry, but competition is heating back up. With more companies and ad spend on the marketplace, Amazon marketers are being asked to take on a lot. New features, strategies, and competitors constantly challenge existing best practices. Amazon marketers need time for research and strategy if they’re to stay ahead of the curve – time that they don’t have if they are stuck manually optimizing campaigns.
That’s where Amazon PPC software like AdManager can help.
Marketers Today Need Amazon PPC Software
AdManager is a one-stop shop for Amazon advertising campaign management. It’s powered by AI and created by a $1 billion+ Amazon seller (yours truly), and we’ve spent years validating, refining, and expanding its capabilities. Today, AdManager offers rare, industry-leading features like day parting.
The above graphs reflect directional trends, but you should note that the rising CPC and ACOS have been tempered by Kaspien’s use of AdManager. Without such a powerful tool, CPC and ACOS would certainly be much higher.
AdManager is effective across product categories, from supplements to pet supplies.
AdManager’s Industry Leading Features
How does AdManager deliver such stellar results? Its feature set includes industry leading capabilities, such as:
- Day Parting – Schedule ads to run only during the days and times that deliver the most sales for the best cost.
- Budget Optimization – Automatically increase daily budget if high-performing campaigns run low, so your most profitable campaigns never turn off.
- Search Term Optimization – Automatically add high-converting search terms to campaigns to improve relevancy and conversion rates, and automatically negate non-converting keywords to lower ACOS without slowing sales velocity.
- Bid Optimization – Create custom rules (rule-based and/or value-based) that bid up or down daily at the keyword level, maintaining competitiveness without overspending.
Winner of the MarTech Breakthrough Awards
We’re not the only ones who think AdManager is something special. AdManager won the “Marketing Automation Innovation Award” in the fourth annual MarTech Breakthrough Awards. It was a particularly competitive year too, with MarTech receiving more than 2,850 nominations from over 17 countries.
“Kaspien has been developing breakthrough strategies and tools to strategically expand branding for all business sizes. Especially with this latest release , Kaspien is empowering Amazon sellers to tap into an advertising strategy that is not even available via Amazon itself.”
James Johnson, Managing Director at MarTech Breakthrough