Introduction
Welcome to the Amazon Advertising Data Trends Review Series for June 2021. 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 June. In turn, will enable you to strategically position your ad-campaigns for July and beyond.
The Data
The data used for this post includes:
- Sponsored Product ads
- Ads delivered in the US
Market Overview
Month-over-Month
During June, ACoS increased 6%, which is one of the larger increases that we have seen over the past several months for ACoS. This was primarily driven by the increase in Cost per Click and the reduction in the Revenue per Click. Overall, there wasn’t much movement in many of the KPI’s compared to prior months. Most KPI’s were within +/- 5%.
Year-over-Year
There continues to remain significant changes year-over-year. However, ACoS has lowered to an 8% reduction year-over-year.
The key Year-over-Year movements include:
- 86% increase in Ad Spend per 1000 Impressions
- 28% increase in Cost per Click
- 46% increase in CTR %
- 39% increase in Revenue per Click
Aggregated Key Trends
ACoS
For the first time since December, ACoS has breached out of the 20-25% range! ACoS significantly increased in volatility due to Prime Day, increasing and decreasing in higher magnitudes than usual. Since Prime Day is over, it’ll be interesting to see if ACoS normalizes or if there’s a systematic increase above 25%
6 Month View
1 Month View
Ad Spend per 1000 Impressions
As we saw in the Market Overview section, Ad Spend per 1000 Impressions has 86% increase year-over-year. Recently, we’ve been experiencing explosive growth in this KPI. However, in this past month we experienced only a 5% increase, which is much lower than what we’ve been noticing over the past several months. Overall, for the graph below we can see that the trend has started to flatten out.
6 Month View
Cost Per Click
Similar to Ad Spend per 1000 Impressions, CPC used to have an increasing trend. Month-over-month, CPC only had a 1% increase. From the graph below, we can also see that the prior increasing trend seems to be slowing down, with a resistance point forming at $1.20.
6 Month View
Click Through Rate
CTR % increase in volatility due to Prime Day, with larger increases and decreases than normally experienced. CTR % ultimately stayed within approximately 0.40% - 0.60% bounds. It’s quite possible that the shorter term increasing trend that was developing since March may be starting to flatten out like the prior KPI’s we’ve reviewed thus far.
6 Month View
Revenue Per Click
RPC decreased 4% month-over-month causing it to fall below the $5 threshold that it had broken last month.
6 Month View
Overall, all of the KPI’s that previously showed increasing trends had started to slow down and flatten out. We’ll have to continue to monitor the trends in the future to see if they stay flat, start to decline, or start to increase again.
Match Type Key Trends
Similar to what we had experienced in the aggregate view, all 3 match types have been flattening out from their previously increasing trends, with each match type either fluctuating and hitting their respective resistance points.
Ad Spend per 1000 Impressions
Each match type has been fluctuating around their respective resistance points:
- Exact - $10
- Phrase - $6
- Broad - $4
6 Month View
Cost per Click
Each match type has been hitting against their respective resistance point:
- Exact - $1.50
- Phrase - $1.20
- Broad - $1.00
6 Month View
Click Through Rate
Excluding the volatility surrounding Prime Day:
- The Exact match type has remained mostly between 0.60%-0.70%
- Broad and Phrase have converged, fluctuating around 0.50%
6 Month View
Revenue Per Click
The prior KPI’s showed the match types hovering around their resistance points. For RPC, we have actually experienced a decline in their respective values.
6 Month View
Placement Type – Longer Term Trends
ACoS
In the Aggregate Key Trends section, we experienced ACoS increasing over 25%. For the graph below we can see that this had been primarily driven by the Detail Page and Other on Amazon placements. These placements have significantly increased over 30% for the first time in the past 6-months.
6 Month View
Similar to what we experienced in the Match Type Key Trends section; placement type trends have been flattening out for all of the major KPI’s. Each placement type has been fluctuating or hitting their respective resistance point.
Ad Spend per 1000 Impressions
Top of Search remained within the range of $60-$80.
6 Month View
‘Other on Amazon’ remained within the range of $8-$10.
6 Month View
Lastly, the ‘Detail Page’ remained between $1.50 - $2.00.
6 Month View
Ad Spend per Order
- Top of Search continues to hover around $8
- ‘Other on Amazon’ remained range bound between $10-$12
- The Detail Page on Amazon continues to remain between $12-$14
6 Month View
Revenue Per Click
Similar to the Match Type Key Trends section, the RPC by placement has decreased from the prior month’s peak.
6 Month View
KPI Forecasts
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 us dive into what we had forecasted would happen for June:
- Forecasted Decreases:
- ACoS
- Ad Spend per 1000 Impressions
- Ad Spend per Order
- Cost per Click (CPC)
- Forecasted Increases:
- Click Through Rate (CTR %)
- Revenue per Click (RPC)
- Return on Ad Spend (ROAS)
- Forecasted to remain flat:
- Conversion %
As we can see from the Market Overview table:
CTR % was the only metric that moved similar to forecasted and historical experience. Specifically, the volatility surrounding Prime Day is what possibly drove some of these differences. Typically, with Prime Day the expectation is for ACoS to decrease and RPC/ROAS to increase, however the opposite had happened this month.
In the previous sections we experienced a majority of the increasing trends starting to flatten out and even decrease. This may have an impact on the trends going forward and we’ll break this down into further details in the proceeding section.
ACoS
ACoS increased 6% in June, missing directional expectations. The expectation is to have a decline in ACoS in July.
Ad Spend per 1000 Impressions
Ad Spend per 1000 Impressions increased by another 5% in June, missing our expectations. Since Ad Spend per 1000 Impressions has experienced a 54% increase Quarter-over-Quarter and the increasing trend started to flatten out, the expectation is to see a decrease next month.
Ad Spend per Order
Ad Spend per Order increased by 4% in June, missing our expectations. Expect to see Ad Spend per Order remain flat (within +/-2%) for July.
Conversion %
Conversions declined by 2% in June, missing our expectations. Historically, conversions decreased in July, therefore we continue to expect a decrease in July.
Cost per Click
Cost per Click increased by 1% in June. We expect to see a decline in July due to decreases in both 2020 and 2018.
Click Through Rate
Click Through Rate increased by 3% in June, meeting expectations. CTR % increasing trend has started to flatten out and historical years have experienced a decrease in CTR % for July. Therefore, we are expecting a decrease in CTR % for July.
Revenue per Click
Revenue per Click decreased by 4% in June, missing directional expectations. Expect to see a decrease in July due to the decline after peaking at a resistance point.
Return on Ad Spend
ROAS decreased by 5% in June, missing our directional expectations. Similar to RPC, expect to see a decline in July.
Key Points
Overall, the key points for this month include:
- Prime Day caused volatility is a majority of the KPI’s this month
- Most KPIs that had increasing trends are now starting to flatten out or even decline
- July and August will be pivotal in determining the upcoming trends in the KPI’s as we are currently in a transitional period
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.
Entourage: Software to Scale Amazon Ads and Results Driven Management.
