Welcome to the Amazon Advertising Data Trends Review Series for September 2020. This is a monthly blog series where we:
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 September. In turn, it will enable you to strategically position your ad-campaigns for October and beyond.
In this section, we break down the aggregate view of the Amazon advertising marketplace. More specifically we will review what happened to ACoS for September and analyze KPI’s that influenced the movements in ACoS.
What Happened in September?
ACoS and Ad Spend per Order had a slightly increasing trend throughout September with a sharp increase towards the end of the month, before retreating downward to less elevated levels.
Let’s break down the metrics that drove the moves in ACoS and Ad Spend per Order. Largely what drove the increase was the consistent increase in Cost per Click throughout September.
But what about the spike in ACoS and Ad Spend per Order towards the end of September? This was due to a drop in conversions in the last week of September.
To Recap, we saw ACoS and Ad Spend per Order increase with a sharper increase towards the end. The increase is ultimately being driven by Cost per Click, with the sharper increase towards the end of September due to a drop in conversion rates.
The other KPI’s we typically review include Revenue per Click, Ad Spend per 1000 Impressions, and Click Through Rate (CTR%). Revenue per Click followed a similar pattern as conversions, with a dip towards the end of the month. While Ad Spend per 1000 Impressions and CTR% remained relatively flat for September.
Match Type Breakdown
Last month we mentioned that the ACoS by match type was recently converged for all match types. This conversion continued for September. Ad Spend per Order also had Broad and Phrase match types converge in recent months. The conversion held for September. Broad match type remains consistently lower as expected.
2020 Yearly Chart:
August 2020 Chart:
The expectation is to see Broad with the highest ACoS/Ad Spend per Order, Exact with the lowest ACoS/Ad Spend per Order. Phrase should land somewhere in between. This is because Exact campaigns should be the most highly targeted keywords that your customers search for and therefore should have the lowest ACoS. The broader that match type, the higher the ACoS should be.
What does this mean?
This means that there is room for improvement in either the Broad or the Exact match types. Either the Broad campaigns are not wide enough and there is lost opportunity in finding niche search terms that are profitable. OR Exact match type campaigns are including keywords that are not the most highly targeted. Either way, close attention should be paid to this as we should expect to see a divergence in these values going forward.
Conversion % – Reaching Yearly Lows
In aggregate we saw that conversions dipped towards the end of September, before recovering. This dip caused Conversion % by each Match Type to reach their yearly lows. Is this a one-time event or will we see these lows breached into the future? As we saw in aggregate, this dip was a large driver in the spike in ACoS, therefore, it’s important for us to keep an eye on this as the lower conversions go, all else equal, ACoS will rise.
Placement Type Breakdown
In this section we’re going to break down the main findings for September by Placement Type. Placement types include:
By breaking down these categories we are able to identify the key areas that drive ad spend.
$10 Swing in Ad Spend Per 1000 Impressions
In aggregate, we saw a relatively flat Ad Spend per 1000 Impressions
When we break this down by Placement Type we see significant fluctuations in values throughout the month. For example, Top of Search had a $10 increase in mid-September, then decreased back to normal levels by the end of September. This was a 25% increase and subsequent decrease.
Removing Top of Search we are able to more clearly see the other Placement Types. Other On-Amazon experienced a similar increase and decrease during mid- and late-September. While it wasn’t a $10 swing, this was a $1 movement, equivalent to a 20% increase and subsequent decrease.
Rampaging CTR% Increases for Top of Search & Other on Amazon
In aggregate CTR% has remained relatively flat since May and has failed to breach above the 0.40% threshold.
However, when we break this down by Placement Type, we can see a completely different story developing. The CTR%’s for Top of Search and Other on Amazon have significantly been increasing during this same time period. If you’re looking to increase your CTR%, you may want to consider increasing your budget allocation to Top of Search and Other On-Amazon placement types.
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 September:
Let’s see how we did on our predictions and forecast what we believe will happen in October.
ACoS had increased for September, aligning with our expectations. In 2018 October’s ACoS increased from September and in 2019 October’s ACoS decreased from September. Since 2019 is the most recent experience, we are expecting to see a decrease in October’s ACoS for this year
Ad Spend per 1000 Impressions had a slight decrease for September, while we were actually expecting an increase. Next month, we are expecting to see this to remain flat or possibly have a slight decline.
Ad spend per Order increase in September, which aligned with expectations. In 2018 this saw an increase for October, while in 2019 this saw a decrease. Therefore, Ad Spend per Order could go either way next month. We’re going to have to rely on the most recent year’s data and therefore are expected a decrease for October.
Conversions in aggregate remained relatively flat for September, aligning with expectations. Even though we saw a dip towards the last week of the month, the month as a whole was flat. We’re expecting to see Conversion % to remain flat in October.
Cost per Click increased in September, aligning with our expectations. In 2018 there was an increase for October, while 2019 had a decrease for October. Overall, we’re expected to see a decrease for October in 2020.
Click Through Rate saw a slight decline when aggregate, while we were expected this to remain flat for September. Overall, we’re expected to see Click Through Rate decline for October.
Revenue per Click is a new metric we are including for this month, so we do not have any past predictions. However, we do expect to see a slight decrease in Revenue per Click for October.
We’ll be reviewing this data and including deeper insights and trends each month. If you have any questions or any data you’d like to see, please reach out.
He is the owner and founder of PPC Entourage, one of the original amazon ad software and management companies. Mike started off as a physical therapist in 2015 and just knew there had to be a better way so he started his ecommerce journey. Using the power of Amazon Ads, he built a 7 figure brand in less than one year. Now he helps other sellers do the same with free valuable education, PPC Entourage software and the ad agency. He is also the author of the Amazon Ads Playbook series.
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