Advertisers grew their spending on Amazon’s demand-side platform (DSP) by 44% in Q4 2019 compared with Q3 2019, which was the largest quarterly jump of last year, according to the “Amazon Ads Benchmark Report” by Tinuiti, a digital marketing agency.
The report is based on performance data of Amazon programs under Tinuiti management with annual Amazon ad spend totaling more than $400 million. Only those companies that were active during Q4 with a consistent strategy in place were included in the study.
A demand-side platform is a system that allows advertisers to manage several advertisement exchanges and data management through one portal. Ad exchanges are platforms that facilitate buying and selling advertising. Amazon owned-and-operated websites—including IMDb, Kindle, Fire TV and Amazon.com itself—accounted for 69% of DSP spend in Q4. Amazon’s DSP is available to advertisers that do and do not sell on the Amazon marketplace to purchase programmatic display and video ads. When shoppers click the ads, links can lead to non-marketplace websites.
These owned-and-operated sites also accounted for 78% of all new-to-brand purchases attributed to DSP spending, up from 71% in the previous quarter. Amazon defines new-to-brand purchases as sales that occurred for the first time over the past year, which can include repeat purchases that occurred over a year prior.
Awareness and consideration campaigns—ads focused on getting in front of a potential customer instead of focusing on purchasing—steadily increased throughout 2019, overcoming purchase-focused ads. Awareness and consideration campaigns accounted for 60% of DSP advertising categories in Q4. Tinuiti attributes this growth to advertisers wanting to build brand awareness and reach new customers.
Amazon Sponsored Products ad spend increased 30% year over year in Q4. Plus, sales attributed to these ads grew 21%. Cost-per-click (CPC) growth—or how much it costs to generate one click of the advertisement—grew 12% in Q4 2018 compared with Q4 2018, according to Tinuiti data.
Meanwhile, Amazon Sponsored Brands ad spend increased 27% year over year, with clicks growing 38% in Q4. Sales attributed to Sponsored Brands ads grew 43%, with CPC declining 8%, according to Tinuiti.
Sales for manual keyword campaigns for both Amazon Sponsored Products and Sponsored Brands ads were highest for those using exact match keywords (44% and 38%, respectively). For Sponsored Products ads, exact match keywords was the only keyword campaign that had a higher percentage of sales than spend, clicks and impressions, according to Tinuiti. This is notable as it is indicative of the importance of the keywords advertisers choose to target using exact match, according to Tinuiti. Sponsored Products ads can be implemented using both keyword-based targeting and automatic campaigns or manual campaigns; Sponsored Brands ads can only use keyword-based targeting.
Sponsored Brands ads saw a more evenly allocated keyword match across broad, exact and phrase keywords for spending. Phrase keywords saw the highest share of impressions at 50%, whereas exact keywords had the highest allocation of sales at 38% for Q4.
From the Monday (December 16) and Saturday (December 22) of the last full week before Christmas, top-of-search results advertisement placing for Sponsored Products accounted for 59% of all sales attributed to top-of-search results. This is a higher percentage of sales than on Cyber Monday and Black Friday. However, Cyber Monday produced a higher share of orders within the first 24 hours of a shopper clicking on an ad than all other days from Nov. 15-Dec. 30, 2019. Tinuiti did not provide exact figures.
Amazon.com is No. 1 in Digital Commerce 360’s Top 1000.