Black Friday and Cyber Monday (BFCM) 2023 have recently concluded, offering valuable insights for brands and sellers on Amazon. This year, BFCM provided more than just a surge in sales; it uncovered key insights into the evolving retail media landscape.
Our analysis of Xmars’ proprietary data revealed several trends and tactics within Amazon Advertising beneficial for Amazon sellers to refine their advertising strategies. Let's delve into a few key findings.
How did ad spend compare to engagement?
Ad spend dynamics:
In 2023, ad spend for Sponsored Brands on Amazon significantly increased, with a 27% rise on Black Friday and an impressive 47% jump on Cyber Monday compared to the previous year. This trend underscores the growing importance of brand-focused campaigns during high-traffic sales events, indicating that sellers should prioritize brand visibility to capitalize on consumer attention.
On the other hand, Sponsored Display ads faced a downturn, with a 21% decrease on Black Friday and a 4% drop on Cyber Monday, suggesting a potential need for more innovative or targeted display strategies.
Conversely, Sponsored Products saw a modest yet steady uptick in ad spend, affirming their consistent importance in the Amazon advertising space.
Cost per click (CPC) variations
CPC experienced noticeable fluctuations across various ad formats. For Sponsored Brands, there was a moderate increase in CPC, rising by 5% on Black Friday and 9% on Cyber Monday. This moderate rise suggests increased competition, hinting at the need for more refined bidding strategies to ensure return on ad spend.
Conversly, Sponsored Display ads saw a significant increase in CPC, 25% on Black Friday and 8% on Cyber Monday, indicating not just heightened competition but higher engagement levels, calling for more strategic approaches to managing ROI against increasing ad costs.
Finally, Sponsored Products witnessed a reduction in CPC, with a 17% decrease on Black Friday and 18% on Cyber Monday, creating a potential opportunity for sellers to gain more visibility for these products at a lower cost.
Shifting average cost of sale (ACOS)
Similar to CPC results, ACOS saw mixed trends across various ad types on Amazon. Sponsored Brands had a decrease of 12% on Black Friday but a slight increase of 3% on Cyber Monday. This fluctuation underlines the importance of striking a balance between ad spend and sales efficacy.
On a different note, Sponsored Display ads encountered a substantial rise in ACOS – 48% on Black Friday and 12% on Cyber Monday. Despite the higher costs, these ads might still hold value in terms of targeted reach, if used thoughtfully.
Sponsored Products, in contrast, showed a decrease in ACOS, suggesting more efficient ad spending in this category.
Conversion rate (CVR) trends
CVR improvements were a highlight across all ad formats. Sponsored Brands saw an impressive 44% increase in conversions on Black Friday and a 27% boost on Cyber Monday, reinforcing the effectiveness of brand-focused advertising in driving sales.
Sponsored Display also performed well in terms of conversions, with a 25% increase on Black Friday and an 11% rise on Cyber Monday. This suggests that, despite the higher costs, these ads are successfully converting viewers into buyers.
Similarly, Sponsored Products reported significant conversion growth, with a 35% increase on Black Friday and a 29% rise on Cyber Monday, highlighting their ongoing effectiveness in driving sales.
What can advertisers expect for the December holiday season?
- Sponsored Brands: With an anticipated increase in Total Ad Spend, maintaining a stable Average CPC of $0.78, a solid CVR of 6%, and an ACOS of 23%, Sponsored Brands are poised to be a key ad format to focus on.
- Sponsored Display: Despite a slight dip in Total Ad Spend, robust performance metrics are expected, including a steady Average CPC of $1.09, an impressive CVR of 26%, and an efficient ACOS of 10%, making Amazon Sponsored Display an overlooked ad type that more brands and sellers should take advantage of.
- Sponsored Products: Predictions suggest a moderate rise in Total Ad Spend, with an estimated CPC of $0.87, a CVR of 9%, and an ACOS of 21%.
This year’s BFCM performance sets the stage for ongoing growth and innovation in advertising strategies on Amazon. As increased competition puts more pressure on advertisers to embrace new ad formats and integrate mid and upper funnel ads into a comprehensive full funnel advertising strategy, brands need to remain agile and adaptable, continuously analyzing market trends and consumer behaviors to stay ahead in the competitive landscape.
Conclusion
BFCM 2023 provided a detailed overview of current trends in the Amazon retail media, offering valuable insights for brands and sellers to leverage for what remains of the holiday season. The main insights from this event emphasized six essential takeaways:
- Prioritize brand-focused campaigns: The significant rise in ad spend for Sponsored Brand ads highlights the growing importance of brand visibility. Prioritizing brand-focused campaigns can help sellers capitalize on consumer attention during high-traffic sales events.
- Innovate with Sponsored Display ads: The decline in Sponsored Display ad spend calls for more engaging, audience-specific strategies. Sellers should explore creative ways of implementing these ads, ensuring they are engaging and relevant to their target audience.
- Invest in Sponsored Product ads for cost-effective visibility: The rise in ad spend combined with a decrease in CPC for Sponsored Product ads opens a valuable window for strategic investment. Use these ads to efficiently increase brand visibility with a key focus on high-conversion products.
- Refine bidding strategies: The increase in CPC for Sponsored Brand and Sponsored Display ads points to fiercer competition. Try developing a bidding strategy using data-driven insights to achieve an optimal balance between ad spend and ROI.
- Monitor and adapt to ACOS fluctuations: Mixed trends in ACOS across ad types emphasizes the need for continuous monitoring. Timely strategic adjustments and aligning ad spend with sales performance can optimize the overall efficacy of advertising campaigns.
- Leverage conversion rate insights: The improvement in CVR across all ad formats suggests that well-executed ads are effectively driving more sales. Analyze the elements leading to these higher conversion rates—be it ad copy, graphics, or targeting parameters—and replicate these success factors across other campaigns while tailoring them to different products and audiences.
By adopting these strategies, Amazon sellers can improve their advertising efficiency, leading to more successful campaigns and sales events in the future.
Want to get similar insights on your advertising spend on Amazon?
Contact us and let us know as you may qualify for a free audit of your Amazon Advertising to help you refine your advertising strategy for the remaining holiday season!
