Internet Retailer expects Amazon.com Inc.’s Prime Day to generate $1.56 billion in U.S. sales this year, up roughly 20% from an estimated $1.30 billion last year.
However, Amazon, No. 1 in the Internet Retailer 2017 Top 500, has been relatively modest in its advertising spending to promote the mid-July retail holiday that begins tonight, according to new data.
In the week that followed Amazon’s June 28 announcement that Prime Day would take place on July 11, the retailer spent roughly $24,000 on U.S. Google desktop text ads based on Prime Day-related keywords such as “Amazon Prime Day” and “Prime Day.” The average cost per click on those ads was 17 cents, which suggests that relatively few consumers were searching and clicking on those ads, says Jim Leichenko, director of marketing at search marketing data provider AdGooroo.
That’s only slightly up from a year ago when Amazon spent about $23,000 during a similar seven-day period (July 3-9) in 2016.
“Even without spending a lot, there’s a natural buzz occurring around Prime Day,” Leichenko says. “Just look at the number of consumer-oriented stories around Prime Day. Consumers are aware of it. They just aren’t clicking on Prime Day-specific search ads.”
Amazon also spent nearly $840,000 to promote Prime Day via TV ads from June 29 to July 5, according to Kantar Media data. Roughly $527,000 of that spending was on ads that ran on cable TV, $198,000 was on network TV, $111,000 on Spanish-language network TV and $3,000 on spot TV placements (the figures don’t add up to $840,000 due to rounding). That ad buy was fairly limited, Leichenko says, given that Amazon has spent $106 million on TV ads since July 2016 to promote its Amazon Echo device.
While Amazon’s Prime Day keyword spending may have been modest, the retailer spent roughly $245,000 on Amazon Prime keywords, such as “Prime” and “Amazon Prime.” That doesn’t include longer-tail keywords such as “Amazon Prime music streaming” or “Amazon Prime streaming.” That’s a dramatic jump from the $125,000 it spent from July 3-9 last year.
That reflects the reality of Prime Day: The retail sales event, which is exclusive to members of its $99-a-year Prime loyalty program, aims to boost the number of households that pay to belong to Prime, which gives them access to Amazon offerings such as music and TV streaming services, its Prime Pantry and Prime Fresh grocery offerings, as well as free two-day shipping.
Amazon has also been aggressive in its use of email to promote Prime Day, according to eDataSource, which tracks retailers’ email marketing campaigns.
The day after Amazon announced Prime Day on June 29, it sent 17 Prime Day-related email campaigns, including one that it sent to 253 million consumers in India. For the next five days, it sent five to eight campaigns per day. It then picked up the pace in the four days after that (from July 5-8), when it sent 13 to 20 campaigns per day. And Sunday it sent 40 campaigns (with the largest send going to 82 million consumers) and 119 campaigns today, with the largest send going to 236 million consumers in India.
For the sake of comparison, last year Amazon announced Prime Day on June 30, when it sent 19 related emails. It then sent between zero and three campaigns in the following four days, before boosting the number of campaigns to between 12 and 17 from July 5-10. It then ramped up its email campaigns to 27 on July 11 and 40 on July 12.
Social media is another area where it appears Amazon has been making a significant push, according to data gathered by Hitwise, a division of Connexity Inc. a provider of e-commerce marketing automation technology. Social media accounted for 13% of Amazon’s upstream traffic in the week following its Prime Day announcement, a 2.3% increase compared to the previous week. “That tells us that Amazon likely increased its sponsored posts,” says John Fetto, a Hitwise senior research analyst. Social media is second to search in terms of marketing sources that drive traffic to Amazon.com.
Amazon’s traffic from affiliate sites such as Slick Deals and RetailMeNot, also jumped 10% in the week following the announcement, Hitwise finds. Traffic to Amazon.com also significantly grew from technology sites such as BGR.com (up 97%), Tech Radar (23%) and CNET (9%). Those increases are likely organic given that the sites have covered Prime Day news, Fetto says.