Introduction
Welcome to the Amazon Advertising Data Trends Review Series for December 2020. This is a monthly blog series where we:
- Breakdown changes in the Amazon advertising market landscape
- Pinpoint key areas of improvement
- Provide guidance on future market expectations
If you missed last month’s edition, you can check that out here.
By reviewing the data and trends in the proceeding blog post you will gain a better understanding of what has happened in the Amazon advertising marketplace in December.
The Data
The data used for this post includes:
- Sponsored Product ads only
- Ads delivered in the US only
Market Overview
In this section, we break down the aggregate view of the Amazon advertising marketplace. More specifically we will review what happened to ACoS for December and analyze KPI’s that influenced the movements in ACoS.
December – The Holiday Shopping Season
ACoS, Ad Spend per Order, & Cost Per Click
ACoS, Ad Spend per Order, and Cost per Click decreased after Black Friday and Cyber Monday during the first week of December. Starting on December 8th these KPI’s increased consistently for the remainder of December.
6 Month View
1 Month View
Conversions & Revenue per Click
Conversions and RPC experienced a complete opposite trend than ACoS, Ad Spend per Order, and CPC. Conversions and RPC increased in early December and peaked on December 8th, before proceeding to have a consistent decline for the remainder of December.
1 Month View
Ad Spend per 1000 Impressions & CTR %
Ad Spend per 1000 Impressions remained consistently between $3.00 - $3.50 between December 1st-16th, then shifted upward on the 17th to remain between $3.50-$4.00 for the remainder of December. CTR % remained relatively flat through all of December.
Aggregate Trends
Outside of the monthly changes, there are a few key longer-term trends we have been monitoring to see if these are larger marketplace changes that are here to stay if they will be short lived.
Ad Spend per 1000 Impressions
Ad Spend per 1000 Impressions dropped off during November but started rising again during December. Due to the increase in December, there continues to be a longer-term increasing trend.
Cost Per Click
In prior months, there has been a strong increasing trend in CPC. However, this trend has been dissipating. The blue line represents the trend line from earlier this year, while the green line represents the current trend. As you can see the current trend line is much flatter than previously, representing the reduced strength of the trend.
Click Through Rate
CTR has consistently struggled to break through the 0.40% level. Last month we saw that towards the end of October the 0.40% line was broken through and held for most of November before falling back below 0.40%. In December, this was broken through again and had stayed higher than 0.40% for the rest of the month. We will have to see in January if it continues to hold or falls back down.
Match Type Breakdown
ACoS Remains Converged
In previous blog posts we have mentioned the convergence of ACoS by match type and all 3 match types continue to remain converged for December. Additionally, Ad Spend per Order continues to have all match types converged. Both KPI’s by match type have followed the trends in aggregate.
Conversion % Continued to Break Yearly Highs
Last month we saw that Phrase and Broad match types had reached their yearly highs, while Exact match was close. In December these highs were reached again, and new highs were made for Exact and Broad match types, while Phrase got close.
Additionally, we noticed that Phrase started converging lower to Broad match type in Conversion %.
Cost Per Click
Broad and Exact match types followed aggregate trends by decreasing in early December before increasing in the later half of December. However, Phrase match type remained relatively flat throughout December. During the Holiday season it may be worth allocating more ad spend or creating more phrase match type keywords in order to maintain a more consistent ad spend.
Placement Type – Longer Term Trends
The ACoS for Detail Page and Other on Amazon has remained diverged since September. Additionally, Top of Search has converged closer to the other placements than it was in August/September. It will be interesting to see if Top of Search can remain the clear winner in ACoS in the coming months.
Ad Spend per 1000 Impressions, Top of Search Placement hit a 6-month low in November at $36 and was reached again in December prior to the Holidays. It will also be interesting to see if Top of Search continues to hit this low and start expecting a decreasing trend or if Top of Search will continue higher.
Ad Spend per 1000 Impressions by Other on Amazon, has consistently ranged between $5-6 since September.
The Cost per Click in Top of Search no longer has an increasing trend. However, Remarketing Off Amazon continues to see this trend and had even seen a large spike on December 4th.
The CTR% for Top of Search and Other on Amazon continue to experience increasing trends.
With a no longer increasing CPC trend in Top of Search and an increasing trend in CTR% for Top of Search and Other on Amazon, these placement types could experience more favorable ACoS in the future, all else remaining the same.
December’s KPI Predictions
In this section we forecast what we think may happen to the KPI’s in the preceding month, by reviewing the Year over Year trends. But before we start, let’s dive into what we had forecasted would happen for December:
- Decreased:
- ACoS
- Ad Spend per 1000 Impressions
- Ad Spend per Order
- Cost per Click
- Revenue per Click
- Increased:
- Conversion %
- CTR%
Let’s see how we did on our predictions and forecast what we believe will happen in December.
ACoS had decreased in December, aligning expectations with our previous month’s expectations. In both 2018 and 2019 January ACoS was higher than December, therefore we are expected to see an increase in January.
Ad Spend per 1000 Impressions had a slight decrease in December, missing expectations. Next month, we’re expecting Ad Spend per 1000 Impressions to remain flat due to 2019 having almost equal values between January and December.
Ad spend per Order decreased further in December, aligning with expectations. Both 2018 and 2019 had higher values in January, therefore we are expecting to see an increase in January.
Conversions increased in December, aligning with our expectations. In both 2018 and 2019 conversions were lower in January, therefore we are expecting a decrease in January.
Cost per Click decreased in December, missing our expectations. The January 2020 and 2019 are slightly higher than their respective previous months, therefore, we are expecting a slight increase in CPC.
Click Through Rate increased in December, while we were expecting a decrease. Expecting to see a slight increase in January.
Revenue per Click increased during December, aligning with expectations. Expecting to see a slight decrease in January.
Key Points
Overall, the key points for this month include:
- ACoS, Ad Spend per Order, and Conversions experienced increasing trends through the majority of December, while Conversions and Revenue per Click experienced decreasing trends.
- The increasing trend we have been seeing in Cost per Click is starting to break down and Conversions have broken through 0.40% again for the 2nd time.
- Conversions broke through another yearly high in December for Broad and Exact match types, while Phrase got close.
- Top of Search and Other on Amazon continue to see very strong increasing trends.
We will be reviewing this data and including deeper insights and trends each month. If you have any questions or any data you would like to see, please reach out.
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