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5 Ways Ecommerce Advertisers Can Brace for a Bumpy October on Amazon


Tod Harrick from CommerceIQ puts light on the importance of leveraging Amazon Prime Day & showcases ways how Ecommerce Advertisers Can prepare themselves.

In 2019, Amazon’s Prime Day event drove $7 billion in sales on Amazon and a 66% increase in sales across all eCommerce retailers. With holiday sales overall driving a 40% increase in eCommerce. With Amazon’s Prime Day officially set for Oct. 13-14 and early Black Friday slated for Oct. 26, October is kicking off the busiest ecommerce holiday season on record. This concentration of the two biggest eCommerce drivers of the year in one month presents a unique opportunity for advertisers, which could prove to be a challenging and hectic month. October is clearly in the crosshairs for many retailers.

The halo effect of Prime Day on long-term consumer behavior is real.

Amazon adds hundreds of thousands of new Prime members during the event every year, and those Prime members spend more than twice as much as non-Prime members. This year, Prime will (for the first time) have competition for driving consumer loyalty and lifetime value, as Walmart rolls out its “Walmart +” offering that includes free shipping, gas discounts, and preferred click & collect scheduling (although it can’t match Prime’s streaming media offerings). But, Walmart+ must be taken seriously. 48% of regular online shoppers were either somewhat or very likely to join Walmart+, and even those already signed up with Amazon Prime were interested with 42% of respondents expressing interest in joining.

With that kind of consumer demand, brands will be flooding Amazon with ads in October. Knowing when and how to leverage Prime Day and Early Black Friday to gain advantageous positioning will be critical if brands want their products to surface to the top and capture a greater share of the increased online demand.

E-Commerce Tips for a Hectic October

Consumers will for sure flock to Amazon, which brought in $75 billion in sales revenue in the first quarter of 2020. The question is, how much busier will it get this October, with COVID-19 nudging holiday buyers online?
Navigating this hectic October requires a different approach to ecommerce advertising. Here’s how I think you can do it.
1. Eyes on the prize. What’s the prize here? Organic Share of Voice, rather than Return on Ad Spend (ROAS), is the best measure of success in ecommerce advertising. While ROAS tells an advertiser how efficient their spend is right now, organic share of voice shows how much a brand can sell moving forward. It provides a more accurate view of advertising performance, and a better guide for determining strategy. For example, SOV helps advertisers understand which products not to promote because they are already low on inventory. Likewise, if a product is performing well via organic searches, additional promotion could dry up inventory in a hurry. With SoV as a metric, advertisers can allocate resources where there are new opportunities.

2. Don’t let items go out of stock. Out of stock items instantly lower search rankings, and it’s a hard climb back to the top. Now’s the time to invest in real-time inventory data to get a snapshot of where stock levels stand. Real-time data is necessary because of how quickly things change during the holiday season. Remember, if a product runs out of stock or runs out of the allocated daily budget, this will stop an advertising campaign in its tracks.

3. Act early. Leading up to high-velocity events like Prime Day and Holidays, Amazon will run out of warehouse space. So, it’s important to get delivery appointments set up at least 3 months ahead of the event. This is why an accurate long-term forecast is critical. Amazon forecasts can often vary, so it’s best to use a forecast that is based on actual historical consumption data and its variance to Amazon forecasts and purchase orders. Another benefit of locking forecasts and making delivery appointments early is that it allows brands to optimize truck fill rates, which lowers cost of goods and enables advertisers to support deeper discounts during highly promotional events. It’s peak shopping season. Also, cost per clicks (CPCs) will begin increasing 1-2 weeks PRIOR to Prime Day and Cyber 5 and will continue increasing at least 2x. Plan budgets accordingly!

4. Automate optimizations. E-commerce platforms like Amazon process advertising auctions at a rate of millions per second. To win in the algorithmic world of ecommerce advertising, brands require a combination of machine learning, analytics, and automation to optimize ad efficiency. Without machine learning, advertisers won’t have the real-time insights they need to make decisions and act quickly. These insights help allocate resources and drive the most profit-aware growth for a brand.

5. Beware the Amazon Advertising Gotcha’s. Amazon is first and foremost a marketplace dedicated to serving consumers. Before even thinking about launching a campaign, educate yourself about the nuances of Amazon Advertising with their free Resource Guide. And keep the following promotion eligibility ground rules in mind.
• Don’t promote a product that is available at a lower price on Amazon.
• Don’t let inventory levels drop below the projected units needed to fulfill a promotion.
• Don’t promote “Can’t Realize a Profit” CRaP products.
• Don’t lose the buy-box for a product during promotion.
Combining these elements and best practices will help brands succeed in what is expected to be a profitable start to the holiday season. It’s only when this strategic approach is taken that ecommerce advertisers stand a better chance of gaining consumer mindshare amidst the noise and capturing incremental sales.

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Tod Harrick
Senior Director of Customer Success at CommerceIQ
Tod Harrick is Senior Director of Customer Success at CommerceIQ, the leader in eCommerce Channel Optimization (ECO), the practice of using machine learning, analytics and automations to optimize the eCommerce channel across the supply chain, marketing and sales operations.

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