Introduction
Welcome to the Amazon Advertising Data Trends Review Series for April 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 could 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 April. In turn, will enable you to strategically position your ad-campaigns for May 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 there are a few key movements to point out which led to an increase in ACoS by 2%. The key movements include:
- 20% increase in Ad Spend per Impression
- 9% increase in Ad Spend per Order
- 9% increase in Cost per Click
- 9% increase in Click Through Rate
- 7% increase in Revenue per Click
Year-over-Year
There continues to remain significant changes year-over-year. ACoS continues to see a reduction of 17% year-over-year. Which is being driven by a 7% increase in Conversions and a 40% increase in Revenue per Click, while Ad Spend per Order increased 8%.
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
Ad Spend per 1000 Impressions continues to see an increasing trend. Over the last few months Ad Spend per 1000 Impressions hovered just under $4. We have been monitoring this trend closely and April experience further increases. Not only did Ad Spend per 1000 Impressions surpass $4, but it continued to shoot straight through the $5 mark!
6 Month View
Cost Per Click
CPC continues to see a longer-term increasing trend since December. Last month, CPC failed to break above the $1.00 threshold. In April, this was quickly broken through and consistently remained above $1.00 for the entire month.
6 Month View
Click Through Rate
CTR % continues to stay consistently above the prior 0.40% threshold. April experienced a quick increase from 0.40% to 0.50%. CTR % is currently testing the bounds of the 0.50% threshold and we will have to see if it reverts back within the range or continues to reach higher levels.
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 during April. Aggregate is largely being driven by Broad and Phrase match types which have increased ~29% since the 1st of the month, while the Exact match type has increased ~24.5%.
6 Month View
Cost per Click
The increasing trend we saw in the Aggregate Trends section is being driven by all the match types. With the Broad and Phrase match type experiencing a longer-term, and therefore more sustainable, trend than the Exact match type.
6 Month View
Click Through Rate
Click Through Rate has completely reversed since March. During April, Click Through Rate has completely rebounded. Broad match types has broken through its prior resistance point of 0.40%. While both Phrase and Exact match types hover just under their respective resistance points at 0.50% and 0.60%.
6 Month View
Placement Type – Longer Term Trends
Ad Spend per 1000 Impressions
Continuing the story of Ad Spend per 1000 Impressions, this metric by placement type has experienced a unique month similar to the aggregate and match type views. In March, we saw that Top of Search had broken above 60. In April we can see that Top of Search consistently stayed above $60 and even briefly broke above $70!
Similar to Top of Search, the ‘Other on Amazon’ placement consistently stayed above the $7 threshold and briefly exceeded $8.
Lastly, the ‘Detail Page’ placement broke above its resistance point of $1.50 in April.
Click Through Rate
The increases in CTR % that we have experienced in both the Aggregate and Match Type views have been driven by the ‘Other on Amazon’ placement type. Over the past 6 months, this placement has struggle to breach the 0.80%. During April, ‘Other on Amazon’ broke through and consistently stayed above 0.80%.
Revenue Per Click
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 April:
- Forecasted Decreases:
- ACoS
- Conversion %
- Revenue per Click (RPC)
- Forecasted Increases:
- Ad Spend per 1000 Impressions
- Cost per Click (CPC)
- Click Through Rate (CTR %)
- Forecasted to remain flat:
- Ad Spend per Order
- Return on Ad Spend (ROAS)
As we can see from the Market Overview table:
Ad Spend per 1000 Impressions, CPC, CTR %, and ROAS aligned with our previous month’s expectations. For ROAS we’ll consider the rounded 2% decrease as relatively flat. Typically, most metrics need to move more than this before trends start to emerge.
ACoS, Ad Spend per Order, Conversions, and RPC 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 April.
ACoS
ACoS increased by 2% in April, missing our expectations. In prior years May has remained relatively flat compared with April, therefore we expect to see ACoS remain flat next month as well.
Ad Spend per 1000 Impressions
Ad Spend per 1000 Impressions increased by a whopping 20% in April, meeting our expectations. Next month, we are expecting Ad Spend per 1000 Impressions to experience a decrease.
Ad Spend per Order
Ad Spend per Order increased by 9% in April, missing our expectations. Expecting to see a slight decrease next month.
Conversion %
Conversions remained flat in April, neither increasing nor decreasing, missing our expectations. We’re expecting conversions to remain flat for May.
Cost per Click
Cost per Click increased by 9% in April, as directionally expected. We are expecting to see a slight decrease for May.
Click Through Rate
Click Through Rate increased by 9% in April, as directionally expected. Expecting to see a slight decrease in May.
Revenue per Click
Revenue per Click increased by 7% in April, missing directional expectations. Expecting to see a decrease in May.
Return on Ad Spend
ROAS decreased by 2% in April, aligning with directional expectations. Expected to see a slight decrease in ROAS during May.
Key Points
Overall, the key points for this month include:
- Ad Spend per 1000 Impressions had the largest Month-over-Month increase at 20%
- Year-over-Year, ACoS and Ad Spend per 1000 Impressions are down 17%, CTR % is down 28%, and RPC is up 40%
- Aggregate ACoS continues to remain stable between 20%-25%.
- Ad Spend per 1000 Impressions, CPC, and CTR % are experiencing 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.
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