Prime Day 2022 CPC Report: How to Prepare for Q4 Deal Events

Anne Harrell

So today we're going to be talking about our Prime Day 2022 CPC report. We'll talk about interesting KPIS and trends that we saw during the event and during the month of July as a whole, and then we're gonna jump into how that relates to the upcoming promotional periods within Q4. There might be multiple, so we'll talk about them both, but before we get started, we can go ahead and do intros. 

So my name's Anne Harrell, I'm a senior retail Media Strategist on our strategic consulting team at Pacvue. .. I help enterprise level brands with their omnichannel strategies across a variety of retail media platforms. My primary focus is on Amazon. I've been in the industry for roughly five years, and at Pacvue for roughly two years, and I'm really excited to speak to you all today, Dhara wanna do a quick intro of yourself.

Dhara Patel

Hi everyone, my name is Dhara and I recently joined Pacvue as a product marketing manager, and I come in with almost six years of e-commerce experience within Amazon, WalMart and other e-commerce platforms. Great.

Anne

So just a quick agenda for today. First, we'll go through a very high level summary of Prime Day. Then we're gonna dive into the specifics, our primed CPC report, and I'll pass that over to Dhara to do that, and then I'm gonna jump back in and talk about how you take that data and then use that to prepare for Q4 and the various event days during that quarter, and then we'll have some time at end for any questions, so if you have any questions, feel free to put them in the chat and we'll try to get to them in our last few minutes. Okay, so just about a Pacvue, Pacvue is the premier Software as a Service Agency for a variety of unified retail media platforms. We try to take all of your data from different platforms and make it actionable, usable and concise so that you can manage your different advertising cohesively across a variety of different networks, like I said. Let's just jump into a quick Prime Day Recap

A couple of really interesting trends for Prime Day in July of 2022, first and foremost, it was the largest Prime Day event to date. I feel like we say that every year, but we definitely weren't expecting the numbers that we saw this year, so a lot of growth across a variety of different categories, a couple of key trends that we noticed, Amazon was really reliant on live streams this year for on site traffic, so we saw a lot of live streams, not just on deal pages in the homepage, but also on PDP, which there's an example of here on the slide, another thing that we saw is that there was lots of external traffic coming to the site, a lot from social media, as you can see here, right in the middle, and relying on tiktok influencers to drive traffic to the site to promote different deal products across a variety of different categories, so it really was utilized as a video format this year, we did see the largest discounts across Amazon devices, which a couple of different sources have pointed out that this potentially is pointing to the fact that Amazon is considering to get out of the private label business, they've gotten a lot of backlash over the years about putting their products above others, they're really highly discounting a lot of these Amazon devices that are typically relatively expensive, and so that might point to them trying to push their inventory a little bit.

We saw a lot with CPG as well, it was the CpG game this year, we do see that happen quite a bit, but definitely a lot of discounts within those categories, as well as a variety of other ones, as you can see here on the start, you're on the right. But like I said, given the back and forth, there were some pick-ups during prime day, you did see a lot of advertisers reporting different mistakes, they made errors on the site, and we had some advertisers where their deal products weren't advertised, they were marked as ineligible and correctly, we had others where they weren't showing up as in stock when they were in stock, so a lot of different hiccups that had to be navigated from an advertising standpoint as well as from a vendor and seller standpoint, but on the whole, it still was the greatest Prime Day event to date with huge numbers across a variety of different categories.

Dhara

I think the biggest call out I have to make is that moving away from non-Amazon platforms was something that was new, that was new this year, especially from Shopify merchants, we saw a lot of traffic being driven in from those Shopify websites onto Amazon really increasing and boosting that overall traffic.

Yeah, and I think that ties back into what they're doing with social media, trying to reach a younger audience, there was the pay with Prime program, so a lot of work to get more people on site, which might lead to the fact that Amazon was not expecting me not a traffic that they did get, and it also might be the reason that there was such a high number of traffic on site during the event. Okay, next slide. So now I'll pass it over to Dhara to talk about our Prime Day CPC report and the results that we saw there.

Dhara

Thank you, Anne. So ad spend increased 36% year over year and was 252% higher than the prior weeks average daily spend. We also saw that CPCs increased 75% week over week, and the second day had the largest increase. Also, some of the best-selling items included the Laneige lip mask, Apple Watch series, 7 Crest teeth whitening strips, shark vacuum as well as Lego sets and more, the best selling categories in the US this year, we're consumer electronics, household essentials and more from the home category, and I think that was... With inflation being at its all-time peak, I think people were driven to those everyday items that we're using, and it seemed like the biggest winners were also discounted items, so customers or brands that had 30% or more discounts running customers were really driven to those PDP pages, and we saw a huge amount of traction there.

Anne

And another quick note about ad spend being up year over year, so significantly, last year people were having a lot of stock limitations, I still think that's in play now, but I think more advertisers were able to promote their products more aggressively because we're coming out of those stock issues, so I think that also was the reason that this year was such a large increase in terms of spend and ultimately sales as well.

Dhara

So for ad spend, brands saw an increased spend in daily Sponsored Products, spend went up almost 281% on the first day of Prime Day compared with the prior week as well as sponsored brand ads spend increased 2.3% year over year on both days combined.

Anne

And another quick note here is, for the different ad types - sponsored brand used to be the most efficient at side that you could use within sponsored ads.

Year over year, we continued increases in terms of the CPCs for the specific placement because it is such a valuable placement on the page, so it's no longer this uncompetitive, highly efficient placement, and we're seeing these numbers in some cases, look almost as high as sponsored products, which typically is the most competitive placement in terms of advertising on Amazon, so definitely an interesting trend that we're continuing to see

Dhara

For CPCs on the second day, CPCs increased 75% week over week compared with 49% last year. We also saw CPCs for sponsored brands increased by 14% week over week for the first day of Prime Day compared with a 32% increase from last year of Prime Day and a 7.2% year over year increased for the second day. Also sponsored brands CPC declined 7.4% year over year for the first day of Prime Day and decreased 6% year over year for the second day. For ROAS sponsored products ROAS for the first day of prime day increased 17% week over week, compared with an 8% increase week over week last year, sponsored products also saw a roas the second day of Prime Day increased by 12.6% year over year to almost $4.93 as well, as sponsored brand RoaS for the first day of Prime Day, increased 50% week over week, compared with a 23% increase week over week last year, for electronics, we saw average daily ad spend of 560% increase year over year. Both days combined, which is phenomenal, as well as CPC for sponsored products in the electronics category increased 50% week over week to $1.61 on the first day of Prime Day.

Anne

This category also includes Amazon devices, so those notes earlier about the highly discounted Amazon devices will play into what we're seeing within the electronics category, and often we see those devices shown first within the search results, and so those typically do get the bulk of clicks, and often sales, and this definitely will play into that with those huge discounts, people were really responding, and ultimately that led to probably a good chunk of the increase in ROAS for this category.

Dhara

For Home and Kitchen, which was one of the bigger categories for this year, they saw a huge boost in ad spend week over week, especially with Sponsored Product spend increasing 447% on day one and almost 477% again for day two as well. ROAS also had a really healthy increase of 40% week over week on day one and 20% week over week on day two. 

For toys and games, we saw a sponsored product ad increased almost 321% week over week on day one, and 290% on day two of Prime Day. Sponsored product CPC also increased with a massive 100% on day one and 102% on day two, the former returning to normal levels three days after Prime Day, which is pretty great that they were able to maintain that momentum. And now for quarter four event prep Anne will take over it and give you some insights. Okay.

Anne

Yeah, so just jumping off of all of those really interesting trends that we saw, we can jump in to how to take those trends and use that to prepare for the upcoming Q4 promotional events. So, as you might know, there might be multiple event periods during Q4, there's likely going to be another type of Prime Day event in October to encourage early holiday buying, and then we have our C5 period, but when we say Q4 promotional events, it really can mean any month within Q4... Because there are so many people on site, are so many people looking to purchase, so whichever category you're in, you don't necessarily have to operate specifically within the Q4 promotional periods, but you can operate outside of them as well, and here are some tips and tricks to really navigate the kind of entirety of the Q4 landscape, one big thing is to leverage automation and modifiers, so Day-parting is a big one, especially if you know you're going to be promotional or your competitors are going to be promotional within a given period or within a given day day parting will allow you to control when you spend and to ensure your budget is being used sufficiently to reach your goals, if you don't have day parting in place and you don't have really granular day parting in place, and this is true for both search and display, you ultimately come out of your budget really early in the day, which means that you're not showing your priority products when they're most valuable at peak periods when traffic is highest, so you wanna make sure that you're leveraging Day parting in order to keep your budget's sufficient and not run out of budget when it's most important...

Another really important thing to do, and this is important for the event itself, but also really for lead ins to promotional events is to target new to brand customers, so you don't wanna just continue to re-target the same customers over and over again. Obviously, that will help you to encourage loyalty, and it can help you to encourage Subscribe and Save subscription, but if you're targeting new to brand customers or finding incremental value in these promotional periods, so you can use, again, display or search to target people that are new to your brand, DSP tends to be the most effective at this because you can find broad audiences that don't interact with your brand or products, but you can also use things like category searches, competitor conquesting with search in order or sponsored ads in order to really reach those new customers, another thing that you wanna do, and this is again true for the entire entirety of Q4, but most importantly for event periods like C5 or Prime Day two, you wanna create roles to monitor your bids and budgets, to ensure that you're automatically adjusting when necessary in order to reach your specific goals and thresholds, you can use rules that monitor your efficiency and decrease your bids if you're going under the efficiency that you're hoping to reach, you can also do the flip of that if you're not doing your sales or your traffic levels that you'd like to hit during a specific period, you can use automated rules to make sure that you're increasing bids without having to go in and do it yourself, so you know you can sleep at night and take breaks to food and what not, you're not constantly just clicking into various campaigns, to make adjustments.

Another really important piece of this, and I kind of touched on this as we were intro-ing this section is you wanna make sure that you're not forgetting about the lead-in period, the lead in periods to events tend to see increased buying behavior, especially in Q4 when there's already just the natural increase in the amount of people on site shopping for the holidays, so these can be times where you can be even more efficient than you have black Friday or Cyber Monday, your Prime Day, and you can still see an elevated amount of sales, but you do so at potentially more... In a more efficient way because there's less competition during those times, you can also look into doing your promotions during these lead-ins and not necessarily doing it on the most competitive event days, but working in the margins and finding what works for your brand.

Some more tips and tricks. One big one is to launch display ads or DSP ads on Amazon.

Often DSP has looked at as kind of a flighted, nice to-have type of strategy, you only run campaigns when they're absolutely necessary. I would say during Q4 they're always necessary. So having an always on Evergreen strategy for your Amazon DSP program during Q4, will give you a cutting edge over your competition, you'll be able to reach those new to brand customers and encourage loyalty and use your DSP program in relation to your sponsored ads program to incur a full funnel approach to your Q4 advertising strategy. Using Pacvue, you're also able to pull in the data more cohesively so that you can see how one is affecting the other, so this can be really key to navigating these events and making sure that you're reaching the right customer at the time. Another big thing that you can do, especially now that we have our original Prime Day, July Prime Day performance, is you can look for areas of under-investment, and what I mean by that is if you're seeing a specific tactic that maybe has a $17 ROAS super low CPCs high traffic, really strong response from your customer base, this is an area of under-investment, you're probably leaving sales dollars on the table by not investing more in those various tactics so make sure that you're constantly doing analysis over your performance, especially during promotional periods, and figuring out what's working, what's not, what's really driving efficiency and sales and traffic, and make sure that you're sufficiently investing in those various tactics.

Another thing to do, and this is kind of the flip of that, is to weigh the cost, look at your different ad types through different channels and different ASINs and determine if you are over-invested in a specific tactic or a specific category or a product, maybe you want to try a different strategy in Q4 that will help you reach your goals in a way that's maybe more efficient or easier or less competitive, we often see people prioritize categories that are the most competitive, which is fair, but maybe if you shift some of those advertising dollars into a category that's a little less competitive, you'll be able to win ultimately more sales and introduce your brand to more users on site, and last but not least you wanna make sure that you're constantly... And I mean, constantly monitoring your piece of the pie or your share of voice, if you're seeing big changes in how your competitors are spending or behaving, then you might want to react pretty quickly to that, so if you continue to monitor how you are performing in terms of share in relation to your competition, then you can make advanced, correct decisions about how to manage your own advertising program, so make sure you're not just looking at your traditional performance KPIS, but also factoring in some of these other measurements like share of voice to make sure that you're looking at a complete picture.

So let's talk about this in more of a tactical way.

Something that I would do early in Q4 to start preparing for these different events, one big one is to optimize your keyword and audience strategy as well as your budgets, and so this is again for display as well as sponsored ads, but you wanna make sure that you're constantly trying to adjust out your targeting, both sponsored ads and Amazon DSP are not set it and forget it types of advertising channels, you want to continue to learn and to optimize based on what you're seeing that is working and what's not working. And earlier we talked about over and under investment with different tactics, but there can be over and under investments with different targeting types as well, so you wanna make sure that you're not missing an opportunity by spending all of your advertising dollars on this keyword, when this other keyword potentially has more value in the long run, so just make sure that you're analyzing your keyword performance and your audience and your budget sufficiency throughout the various events in making adjustments before and during to make sure that you're continuing to stay on top of performance. Another big thing to do is to review your product pages in your brand store, this seems is relatively simple, but you'd be suprised about how many people don't think about this up until the event.

You wanna make sure that everything is good to go, that all of your graphics or titles and your text are fully optimized, that that is not a reason that you're missing conversions while you're driving traffic to those different pages based on your advertising strategies. Another big one is to just check your ASINs, specifically the promotional ASINs and make sure that their featured in all of your tactics, especially your top Auto and manual campaigns, as well as in your upper final Amazon DSP tactics to ensure that those ASINs are getting full visibility before and during the event, another big thing to do is use the traffic that we're seeing during Q4, and especially during these promotional events to test and learn to find potential things to apply to next year's events or to your strategy in 2023. So prepare experiments with different keywords and bidding schedules to see what works and what doesn't, you can also do this with creative types, for Amazon DSP, you can test two different types of creative and figure out what's working, what's driving that engagement, and maybe what's not getting as strong of a response. This can also be useful for measuring different discounts and messaging, if you have a coupon and a deal of the day within the same product category, you can see what's getting the highest response to make sure that you apply that to your promotional strategy during future events.

And last but not least, is to have retargeting for DSP and sponsored display ready to ramp as soon as the traffic surge for the event period is over, there will be a lot of people who you ultimately pay for a click or paid for a view, and they did not purchase your product, but if you have an effective retargeting and remarketing strategy, you can try to encourage those people down the road to purchase your product, so it's not lost ad spend. 

Now, let's talk about day of event. During the event there are a lot of things you need to do, but here's a very short summary of the most important pieces, first and foremost, increase your budget for your campaigns, this seems pretty basic, but you want to make sure that you are constantly adjusting your budgets, we typically plan unique budgets for each individual day, for each individual campaign, depending on if we have active promotions or if it's a highly competitive category, to make sure that our budgets are sufficient for that period. Within that, you'll also wanna identify what's your max spend, what’s your max CPC and your Max CPM bids that you are willing to hit and don't go above those, you know, make the call, make sure you have these things mapped out ahead of time so that you're not scrambling during the event, determining if you should turn things off or on, or push or don't, and before you reach that point, before you hit your max in your max spend, your max CPMs, CPCS, be flexible.

If you're seeing, you know a campaign performed better than the other mixture, do shifty budgets between the two, don't be overly restrictive, but make sure you know your limits if you're not promotional, consider pausing or limiting non-priority campaigns until the bid rush is over, as you know, Q4 tends to see the highest CPCs of the entirety of the year, if you have a product category that's maybe not top priority in, you're not worried about losing a little bit of share in, I would just make sure that you aren't over-spending and over-indexed in that category when CPC and CPMs are gonna be really, really high and you're not gonna see as high of a return and last but not least, we already talked about this, track your share a voice, make sure you're not just looking at your lower level performance metrics, but looking at the complete picture, also look at your organic search ranking before, during and after the event, so that you have a way to measure how these events impact your overall business, not just from a sales standpoint, but from a competitive standpoint as well. 

And last but not least, we'll talk about what to do after promotional events, so like I said, number one thing you wanna do is make sure that your DSP and sponsored display, retargeting re-marketing campaigns are ready to ramp. potentially during the event, if you expect a traffic decline in the latter half of the day, but immediately after especially, this will make sure, again, that you're not losing advertising dollars, if someone looked at your product, you can still hopefully get a sale out of that person, even if you're not promotional, and we definitely see these strategies be effective, you wanna make sure that you're optimizing as much as possible based on the increased traffic that we see, the next is to have a plan to pull forward funding if needed, if there's residual traffic and the lead out or immediately after event that is still very valuable? Maybe you didn't budget enough for those days, just make sure that you're being flexible, being flexible is really the key to winning all promotional events, and if you're flexible enough, you can pull forward residual spend so that you don't have to go dark on those potentially valuable days.

Revise your day parting, it's kind of going in a circle here, but we told you to increase your day partying and make sure your budgets are sufficient if you're not seeing that boost in the latter part of the event or the lead out of the event. You don't wanna be spending when there's not relevant traffic, so just make sure that you revise your day parting and your rule based settings back to normal level so that you ultimately aren't spending when there aren't conversions to be had. Review your performance. Typically, this is going to be kind of the last thing you do. You wanna give as much time as possible to get the data fully attribute, but you wanna see how you performed and you wanna really dig in, not just look at the high-level numbers, but what worked, what didn’t... What was different from previous event days, what products works, what campaigns work, what targeting strategies work, and then use those to plan for future events and for 2023 as a whole, and last but not least, we told you over and over again, track your share of voice that tracking can help you, you share a voice to figure out your true e-commerce commuters and uncover new competitors.

There are always new people that pop up during these events, these are people that potentially will be one of your larger competitors in the upcoming year, so you wanna make sure you track that, there also might be opportunities where you see someone spend a little less than you expected, these might be areas that you can conquest moving forward, so you just wanna keep an eye on that share of voice data that we told you to track.

And just so that you know, I'm talking about both sponsored ads and Amazon DSP. There are a lot of different tactics within these... But this is kind of a high level wrap-up, but when those different tactics can be most useful... So when you're looking at things like sponsor brand and upper funnel targeting in market and lifestyle audiences within Amazon DSP, these are most useful before and during the event, you're trying to drive that traffic to your products, even when they're not promotional, so that people are seeing your products interacting with your brand, and then you can re-target and re-market these people during and after the event, you wanna focus a little bit more on kind of those mid to lower funnel tactics.

So these are things like sponsored product and sponsored display specifically for conquesting and defense, and then also retargeting and remarketing, these are ways that you can have that full funnel approach, just make sure you're focusing on the right part of the funnel during the right period of the event. And just a quick summary, some key takeaways, prepare your strategy now, Q4 is basically tomorrow, so just keep an eye on how you performed in July and start formulating a strategy for the upcoming Q4 promotional periods. Launch any search and DSP campaigns. Now, give you... It will give you time to build relevancy, It will make sure that you're not trying to launch day of and you're seeing really high CPC and CPM so just launch anything that you can now use Q3 to really optimize your keyword strategy, your targeting strategy, your PDPs, your budgets- Q3 tends to be a little bit quieter. So this is a time to really collect your thoughts, collect all your data and formulate an effective strategy and make sure your account is in tip-top shape for the upcoming quarter, and then have your plans for the quarter as a whole, but also for the day of and make sure that you get approvals in place to increase budgets or inventory, if needed, to make sure that you can be flexible during these event periods.

So now we'll head into any questions...

Dhara

We do have one question, someone wanted to know, do we have actual market share data based on point of sales rather than share of voice?

Anne

That's not something that's available within our platform, or really any platform, but you can kind of back into share of voice, align share of voice with your CPCs and see how people are interacting with those products and then make assumptions, but we don't have the market share specifically.

Dhara

That is the only question we have. 

Anne

Gotcha, okay, any other questions? You guys are a quiet bunch today... Okay, well, if you have any other questions, feel free to contact us. You can go to www Pacvue.com to get more information or reach out to Sales at Pacvue dot com if you have any specific questions about our sales or capabilities or any of the data that we presented today. Thank you all so much for joining and this recording should be available if you'd like to see it. Thank you.