Introduction
Welcome to the Amazon Advertising Data Trends Review Series for May 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 May. In turn, will enable you to strategically position your ad-campaigns for June and beyond.
The Data
The data used for this post includes:
- Sponsored Product ads
- Ads delivered in the US
Market Overview
Month-over-Month
This month ACoS remained completely flat, neither increasing nor decreasing. Despite ACoS remaining flat the other KPI’s had experienced significant changes.
The key Month-over-Month movements include:
- 26% increase in Ad Spend per 1000 Impressions
- 10% increase in Cost per Click
- 15% increase in Click Through Rate
- 10% increase in Revenue per Click
The 10% in Cost per Click was offset by the 10% increase in Revenue per Click, leading to on changes in the overall ACoS.
Year-over-Year
There continues to remain significant changes year-over-year. ACoS continues to see a reduction of 18% year-over-year.
The key Year-over-Year movements include:
- 38% increase in Ad Spend per 1000 Impressions
- 21% increase in Cost per Click
- 48% increase in Revenue per Click
- 22% increase in Return on Ad Spend
Aggregated Key Trends
ACoS
There continues to be not much excitement happen in ACoS since December. Overall, ACoS continues to remain in its 20-25% range.
6 Month View
1 Month View
Ad Spend per 1000 Impressions
We continue to monitor Ad Spend per 1000 Impressions and the explosive upward trend we have been experiencing over the past couple of months. In May, we continued to experience this growth and Ad Spend per 1000 Impressions broke above $6, reaching a peak of $6.81. This is just under the all-time high of $7.07 reached in March of 2020.
6 Month View
Cost Per Click
CPC continues to see a longer-term increasing trend since December. Although, CPC is starting to experience a resistance point at 12%. We will have to monitor this trend to see if CPC reverts back lower or is able to break through this threshold.
6 Month View
Click Through Rate
CTR % broke through the 0.50% threshold and consistently stayed between 0.50%-0.60% for the entire month. A shorter-term increasing trend is starting to develop.
6 Month View
Revenue Per Click
RPC was previously experiencing a resistance point at $5. In May this threshold was broken, and RPC remained between $5-$6 for the entire month.
6 Month View
Match Type Key Trends
Ad Spend per 1000 Impressions
Similar to what we had experienced in the aggregate view. All 3 match types have increased significantly and have broken through previous resistance barriers:
- Exact - $10
- Phrase - $6
- Broad - $4
6 Month View
Cost per Click
Similar to the Aggregate Trends, each match type experiences a resistance point to their respective increasing trends. These new resistance points include:
- Exact - $1.60
- Phrase - $1.20
- Broad - $1.00
6 Month View
Click Through Rate
All three placement types exhibit a shorter-term increasing trend similar to the Aggregate Trends. The Exact and Phrase match types have broken previous barriers of 0.60% and 0.50%, respectively. While the Broad match type has remained within the range of 0.40%-0.50%
6 Month View
Revenue Per Click
The Exact match type has consistently stayed above the previous threshold of $6 and has a new resistance point of $7. Phrase has also broken through its prior $5 resistance point, while Broad has remained between the range of $4-$5.
6 Month View
Placement Type – Longer Term Trends
Ad Spend per 1000 Impressions
The Top of Search placement continues to increase by leap and bounds! Not only did Top of Search consistently stay above $60 for all of May, but it even broke above $85 for the first time since 2018.
6 Month View
Similar to Top of Search, the ‘Other on Amazon’ placement consistently stayed above the $8 threshold and just barely reached $10, stopping short at just $9.99.
6 Month View
Lastly, the ‘Detail Page’ consistently stayed above a prior threshold of $1.50, briefly breaking above $2.
6 Month View
Ad Spend per Order
The main movement by placement types was Other on Amazon, which shot through $10 and quickly rose to $12, before reverting slightly downward. The Detail Page continues to remain between $12-$14 and Top of Search briefly broke $8, but we will have to see if that holds.
6 Month View
Revenue Per Click
All three placement types are experiencing an increasing trend similar to the Aggregate view, but all are coming up on a resistance levels:
- Top of Search - $7
- Detail Page - $4
- Other on Amazon - $4
6 Month View
May’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 us dive into what we had forecasted would happen for May:
- Forecasted Decreases:
- Ad Spend per 1000 Impressions
- Ad Spend per Order
- Click Through Rate (CTR %)
- Return on Ad Spend (ROAS)
- Forecasted Increases:
- Cost per Click (CPC)
- Revenue per Click (RPC)
- Forecasted to remain flat:
- ACoS
- Conversion %
As we can see from the Market Overview table:
ACoS, CPC, and RPC has matched our expectations for May. Ad Spend per 1000 Impressions, Ad Spend per Order, CTR %, Conversions, and ROAS had missed our expectations. In the proceeding section, we will review the historical trends in the KPIs in order to guide us in what may happen in June.
ACoS
ACoS remained unchanged in May, matching our expectations. In 2021 June had decreased compared with May, therefore we expect ACoS to decrease in June.
Ad Spend per 1000 Impressions
Ad Spend per 1000 Impressions increased by another whopping 26% in May, missing our expectations. Since Ad Spend per 1000 Impressions has experienced a 62% increase Quarter-over-Quarter, the expectation is to see a decrease next month.
Ad Spend per Order
Ad Spend per Order increased by 6% in May, missing our expectations. Expecting to see a slight decrease next month, due to Prime Day.
Conversion %
Conversions increased by 4% flat in May, missing our expectations. The expectation is for Conversions to remain flat in June.
Cost per Click
Cost per Click increased by 10% in May, as directionally expected. We are expecting to see a slight decrease for June.
Click Through Rate
Click Through Rate increased by 15% in May, missing expectations. CTR % continues to experience an increasing trend, therefore expect to see increases in June.
Revenue per Click
Revenue per Click increased by 10% in May, missing directional expectations. Expecting to see an increase in June due to Prime Day.
Return on Ad Spend
ROAS remained flat in May, missing our directional expectations. Expected to see a slight decrease in June due to Prime Day.
Key Points
Overall, the key points for this month include:
- Ad Spend per 1000 Impressions had the largest Month-over-Month for 2 months in a row, increasing 26% in May and currently has a Quarter-over-Quarter increase of 62%
- Year-over-Year, ACoS is down 18%, RPC is up 48%, and Ad Spend per 1000 Impressions is up 38%
- Aggregate ACoS continues to remain stable between 20%-25%.
- Ad Spend per 1000 Impressions, CPC, CTR %, RPC are experiencing shorter-term to longer-term 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.
