July 20, 2022
Learn the latest Amazon, Walmart, and Instacart advertising performance data.
The data from Q2 is here. Watch this webinar recording as Melissa Burdick, President at Pacvue, Riyaad Edoo, Senior Director of Product Management at Pacvue, and Destaney Wishon, Co-Founder at BetterAMS, share their takes on the latest eCommerce advertising trends. This webinar covers:Quarterly trends around CPC, CPA, and ROASA deep dive into specific category performanceWhat’s new in Amazon AdvertisingIndustry insights and opportunities
Hello everyone, thanks so much for attending our Q2 webinar. This is going to be Amazon, WalMart and Instacart performance data. I am going to try to introduce folks… There we go. It’s been a bit since I’ve done a webinar. Anyway, I'm Melissa Burdick, president and co-founder of Pacvue, I have two amazing guests with me today, Destaney Wishon, CEO of better AMS, one of our great partner agencies, Destaney herself is an amazing thought leader, and then Riyaad Edoo, Senior Director Product Management at Pacvue has a tremendous amount of knowledge in the ad space, coming from Groupon, and I also brought my swear jar today because Riyaad sometimes swears and he's usually pretty good on recording. Yeah, no, I know we've implemented some more recordings internally, so he's on his best behavior. Just kidding, got to joke. We're gonna liven up today’s webinar with jokes because data can sometimes be a little boring, but not our data. So here's our agenda. What's new? And Q2, a Q2 report, deep da category insights, Q and A. So we'll have a live Q and A at the end. So put in your questions during the presentation and we will get to them at the end or ask them at the end, we're also gonna do a prime day quick recap, we have some great data to share you, but of course, please download our reports, you get the full thing, as well.
And for those of you who are attending our first webinar with us and have no idea about Pacvue, hopefully you do, but we are the leading enterprise platform for brands, retailers and agencies looking at manage ecommerce advertising across 30 plus retailers and growing all the time. By combining holistic performance with recommended actions follow us on LinkedIn, so you get the most up-to-date information on retail media and e-commerce. Alright, so we're gonna kick off with prime day, and here's some insights, Destaney and Riyaad, please jump in when you can, but I wanna give a call out to Jeff Cohen, if you are not following Jeff Cohen on LinkedIn you should absolutely do that because he's at Amazon. He always gets great information about Amazon advertising and what's going on, another one is Stratably which is a subscription, but pretty cheap and has a lot of great information. Carey Masters is a great resource, Destaney is a great resource, so lots of great people to follow to get up-to-date information. So let’s kick into what happened, so heavy discounting on Amazon devices, so you can see according to Stratably, they had the highest non-discounts 48%.
Interestingly, a Wall Street Journal article published, I think last week, said that Amazon has drastically reduced the number of items it sells under its own brand, and the company is discussing the possibility of exiting the private label business, which I know probably goes relief for a lot of brands, their business has 243000 products across 45 different house brands as of 2020, which is a huge amount of private label, so the strategy is thinking of really reducing that amount of private label to more of a target of enough strategy. As an example of just some key items, this or There's a lot better personalization, I've heard a lot of people saying it was easier to find deals, potentially Amazon is doing a better job when you enter the home page to more personal feel for you. There is also a big focus on CPG, so the Department of Labor released a report, 12% inflation year over year for groceries with a 9% average. food, if you've gone to the grocery store, food is so expensive right now. And so getting a 30% discount on chips and trash bags was a really good deal, and people came in for those deals.
There was a big focus for CPG. I've been hearing a lot anecdotally from clients about just how great their sales were for consumer packaged goods, which always gonna be a lift during prime day just because of the increase in traffic, but this year it seems like just so much of those products where we're being bought. I have my influencers up here, so Amazon is doing a lot more work on influencers and influencers driving discovery and traffic. This is Charlie Damelio, Destaney is like, how do you know her name? And the reason is 'cause I have a 13-year-old daughter who's not supposed to be on tiktok, but I can't figure out the parental control, so she is... And so Charlie was talking about Prime Day. Last year, these influencers really didn't talk too much about Prime Day, but this year Amazon did a really good job, or much better job priming them for Prime Day and understanding their deals, bringing them out to creative houses, telling about it, a couple of misses this year, so it seems like... And we can hear from Destaney on this, but seems like and there's always glitches, but this year, it seems like a lot of coupons in Go Live, coupons go down, people were scrambling and other things that kind of mess people have was that Amazon...
That were the real time sales module and the vendor central, so they couldn't really view their real-time sales too easily, but good news is that the real time sales API is coming out soon, and we will have that integrated, so... What do you guys think what did you see? That's a lot.
That's a lot. I think you just covered every important topic possible with Prime Day, I would say on our end, one thing we saw is just as things have become more pay-to-play and as consumer sentiment shifts to understanding Prime Day is synonymous like Black Friday and Cyber Monday. So they're holding up waiting to buy their products the week before, their focus is getting discounts on Prime Day, brands have shifted to paying for more of that traffic, we saw some of our brand's top of search would be around $7-8 average CPC, so the brands that shifted to a full funnel approach and really made sure that they are moving up with influencers and driving traffic from Instagram and tiktok and then re-marketing all that traffic, just did incredible... They did a great job of capturing the full funnel and then really analyzing the results on a cost per acquisition model rather than just being strictly pay to play, 'cause that inventory is getting more and more expensive as conversion rates are really high because customers love shopping on Prime Day, so that was something that was kind of cool to see is really see the full picture come into fruition this year.
Awesome, alright, so Ri is gonna take it away with some data. There we go.
Yeah, so lots of activity. You just talked about it too, just how crazy those couponing and discounts were, it was really down to the wire for a lot of the brands in terms of what's included, was the brand profitable enough, was Amazon profitable enough? Lots of back and forth in terms of how they balance between the two... Who funded what to keep deals alive? We know it was a really big one this year, so I know for a lot of us, just really glad that it's over and done with. So in total, keep in mind we’re taing a look at just Sponsored Products when we're looking at this slide, but overall Prime Day average ad spend about 252% higher, you know then, the prior week average daily spend, it's about 36% growth in Prime Day, year over year, we've got 4% higher on the first day, for sponsored products, 6% higher on the first day for sponsored brands. That's something that we continue to see year over year, most of those increases are always going to come on sponsored brands, which is up about 281% or so week over Week, and then the first day of prime day about 258% from the second day, overall SPA spend increased about 48% year over year.
Sponsored brand ads spend up about 259% up week of a week on the first day, and about 238% on the second day, year over year it still looked relatively flat with less at about 3% growth, but as we saw in the Pacvue quarterly CPC reports ad spend on sponsored brands decreased about 20% year over year in Q2, that second day of prime day so higher CPCs in the first sponsored product, CPC on the second day was about 208 compared to about 190 on the first day, that’s a 75% week over week increase, sponsored brand, similar story in the second, it was about 2.05 compared to about 1.87 on the first day which is about a 26% week over week increase, so I... Sponsored brand was certainly less aggressive in the space, the ad types still saw really great returns for the brands, sponsor brand ROAS about 5.78 for both days on Prime Day, which is about a 59% week over week increase and about 10%, year over year for them. Amazon had done quite a bit of testing in terms of what products or ASINS they prioritize and show with the SPA, which I think we're all pretty comfortable saying, and it works out quite well for them.
And I think coming out of Prime Day, it was actually quite an interesting disparity in terms of the ASINs that cpgs in particular were promoting, were they evergreen ASINs that they had as a part of their forecast, were they pretty distinctive to the prime day window, and I think with a lot of them that trade-off strategy or what that sort of re-engagement strategy looks like is gonna be really interesting to watch, especially over the next quarter, and then more importantly, as we get into Q3 and Q4, what does PO changes on the Amazon side end up looking like what a bunch of reports from brands coming in that the POs coming in after prime,were not necessarily as expected, Amazon obviously trying to monitor and optimize inventory quite closely and in turn... Many of the ASINs that brands are relying for a higher contribution to ROI, we're not reordered a couple of ways to deal with that, we've seen brands get really aggressive with their vendor managers, we've seen other instances in which they're guaranteeing larger orders like born to run. I think it'd be really interesting to see what that period or window ends up looking like, and then in turn, if they're out of market for a significant period of time, what cost re-entry looks like, especially on spas.
Awesome. Alright, we are going to head into what's new for Q2
Perfect, so out of the last six months, I would say Q2 is probably one of the slower quarters in terms of just logging into advertising console and seeing all the new, fun and shiny updates. I think there's been a lot of testing. We're seeing really tiny tweaks to the sponsored brands layouts, the new sponsored display layouts and things like that, but not a lot of exciting things on the front end, we do have new things like sponsored display launches, branded search metrics as a sponsored display is pushing on and off platform, more and more frequently, they're trying to give us more data to support that, like what we see on DSP, all Amazon sponsor display ads will now serve on and off with contextual targeting, this is a really key note, 'cause sponsored display used to be really granular when it was a PDA, so you could select specific products and target them very, very granular-ly, but now if we're gonna be running on and off platform and moving up the funnel a little bit more, we're gonna see a lot more ad inventory open up probably more impressions, potential to really scale that ad type more than we've been able to, Amazon has released suggested bids for specific events, so what we really saw, this was with Prime Day, so for the first time ever, we could go in and see, Hey, this is a suggested bid, for Prime Day alone, now, I really liked watching this release in the groups because everyone was like, Stay away from this.
You're gonna spend a ton of money. Don't increase your bids. All of us, I think, are pretty much along the lines of from a general strategy, don't increase your bids too much unless you're doing ranking or market share plays because it gets expensive fast. So I think the idea is great. I'm really excited to start seeing Amazon give us more data and more recommendations that can help the brand, but also know it's advantageous to bid higher on a day like Prime Day, 'cause Amazon's gonna make more money and maybe more impressions isn't what you're looking for as a brand, so it's a great roll out, super excited, but be cautious when you are looking at your events like a potential Q4, Black Friday, Cyber Monday suggested bids, bulk sheets now provides ASIN eligibility status for sponsored products. I think this is always an issue on the advertising side of making sure all of our ASINs are eligible because it's been a pain to click through every single campaign, login and then actually see within the ad group whether or not you have that status, new global features on manager accounts, again, really tiny fun tweaks, and then language translations available for sponsored display, so sponsor display does have the ability to write copy, so those things go a really long way when you're running international campaigns
One of my favorite things about the suggested bid for the events is they actually have the lead in and lead out period, and that's something that everybody talks about and something that we never really see happen. We always talk about, Oh, it's not just about the day, really reconsider what it looks like for those three to five days leading into it, but we honestly never really see it, everybody just goes kind of nuts the day before but this year, those five days sort of pre-prime they actually increase in ad spend and subsequent ROAS actually was actually quite fantastic, and we've never seen that before, so I actually kinda like that tidbit there.
Yeah, if anyone wants to test that suggested bids with events Email us. Because that would be a fun one to do.
A fun screenshot of what this looks like, so every time you go to add keywords or your targets, you will see the suggested and suggested bid for Prime Day was the first recommendation we've been given. I'm really curious with some of the new data we're getting, and we're gonna be getting into it a little bit later with stream, if they're gonna give us more recommendations around time of week, time of month and start getting more specific because Prime Day is fun and exciting. But it's not giving us much else, so I'm very curious to see what the cinnamon is and what direction they're gonna go with this
That's a lot of recommendations and a lot of things we're gonna choose from.
A lot, a lot. So I think this is the more fun and exciting aspects of the rollouts, Amazon Marketing Stream has been launched, I'm gonna save that for the end because that's probably the biggest thing on our end as advertisers that we're all really excited about, sponsored display launches, match target reporting and the Amazon ads console, just more data, more resources for us to be able to download our reports, pull everything, scrape everything similar to what you do on a search term, report and launch new campaigns.
Amazon DSP Advanced Certification launches on the learning console. So that's obviously a really exciting one as well, more education in the space, I think is a really good thing 'cause it is such a new industry, so Pacvue has an incredible DSP course, things like that. I sent my whole team through it. If anyone's been up-to-date on their Amazon certifications, it's gotten way better than what it was six years ago, it's a lot more fun, so I definitely hop in, make sure you have all of those. Introducing suggested products or option responsive products. Really tiny things that just make the user experience a lot better, and then advertisers can now measure total ad attributed impact using Omnichannel metrics. This is a big one, and I think this is where the direction of the industry is going between Stream and omnichannel metrics, everything's getting a little bit more expensive and a lot harder to track, so the more data we have to figure out where our ad spending our dollars need to be going, is just gonna help us improve our total impact, so very excited about that one. And then the next slide, which I feel like should be the biggest announcement of the quarter, is finally having access to Amazon marketing stream and hourly data.
So the number one most asked question I've had for probably the last five years of everything in Amazon is, What is my opinion on day parting, especially brands that are coming from Google, especially smaller brands that have a limited budget and they're not sure what to do with it... And they have kind of misconceptions about the ad platform, they've been needing this data, and my answer has always been, Well, we don't really have the insights to make really good decision, so test it within your own account, but it's not really scalable. Well, Amazon's trying to solve that piece of the puzzle, so here's a screenshot directly pulled from Pacvue for one of our campaigns, and what's really cool about this is we can actually see our cost per clicks at a certain time of day, and how that changes over time, even cooler, I can pull all kinds of other data, so I like to overlay my conversion rate data and my cost per click data to see if there's any trends that I can then utilize a day parting feature that's gonna make sense and make my ads perform better. And it's a little asterisk that I do like to say Amazon is still one of the highest purchase intent models ever, so if they're clicking on your ad, they're probably planning on purchasing at some point in time, whether that's adding to cart at 1 AM and then not buying until 9, those things make strategy a little bit easier, but having this data, having the resource finally to justify a lot of our decision making has been probably, my opinion the most exciting update of Q2.
Yeah, this is my favorite one by far as well, departing historically was either a giant sort of test and learn endeavor, or largely just made up... You get the sales coming out of brand analytics, and we're just like, Well, great, my sales were all happening at 7 PM, I'm gonna run advertising then. The reality is that people who are actually interacting with these ad units and maybe at like one or two in the afternoon, then not check me out to 7 PM. So Amazon passing through the interaction data in contrast to the sales data, I think is actually fantastic as you were sort of building this out in Pacvue, it was really the question of How much data do we wanna get people... How much it's just sort of like a big pain in the back people where it's actually not helpful, so because we get more of this in now, API coming in every 30 minutes, the nice thing is we can allow us as the option to say, Is this campaign design for REACH is it Designed For CVR, you maybe have a larger ad group and we need to maximize towards ROAS what you need to do is hit the button and say what you're looking for, and we can pre-calculate what the CPC, the pressure in flux looks like, which was probably one of my favorite things we done at Pacvue so far as well.
Yeah, this is a super exciting. I hope that the rest of the retailers follow, providing more access to data is, which I think is the trend are... Okay, so now we're gonna get into the Q2 CPC report deep dive, I'm gonna take us through the data and Destaney and Ri or going to..Ri has ad jokes, he’s going to chime in with jokes, so he wants to make sure it's not too boring for everybody. Alright, so what happened ad Spend increased quarter over quarter, flat year over year, CPCs remain relatively flat with the Amazon Sponsored Products decreasing just 0.8%... That's great. Flat quarter over quarter and increasing just 1.6% every year. Walmart has a really great story this quarter, we're gonna talk about it, they get a couple of fun things that have really improved their ROAS and CPS, and then I was looking at keyword trends, because this is where you see what is the top trending toy, and this year or this quarter, it's “squishmallow”. Does anyone know what squishmallow... If I'm saying that, right, squishmallow replaced... Does anyone know what the top trending one last quarter was? It says it right there, it’s the “pop it”. So here's some of the trends, very seasonal for Mother's Day and Father's Day, so we see all the summer tops, something interesting about fashion fashion is much more profitable than consumer electronics product, so the fact that Amazon is getting more people coming in to buy swimsuits, I think during Prime Day
They claim that they... In the US people, about 1.2 million sunglasses and one million swimsuits, or I think that was... Yeah, that was Prime Day. People buying high margin stuff, the better for Amazon. Interesting to see swish. Mellow, replaces pop. It is the interesting thing. And then Ri what’s your joke?
Yes, I should caveat, when I put a joke, you have to remember that I'm not that funny, but I think the switchmallow thing was certainly interesting. It really sort of exploded during the pandemic, but then it was a ton of YouTube videos or people just hunting for them, and I only know because my daughter is obsessed with it, and then I think there was a march New York Times article or something that's talked about it, they've got a ton of variants, I think they have an Easter special or something like that, but a really good example of when or lack of in-store distribution really allows things like this to over index online, even with swimsuit stuff too.. It's really interesting when you get a little bit further down in terms of overall search terms, I wanna say it was a ruffled one off the shoulder sort of thing, a really good example of how PR and other offline activity really impacts buying behavior on Amazon, not always going to be a branded search, it was one or two brands in particular, I'm gonna butcher their name, and I think it was like a high or ended up doing a really good job in terms of capturing top of the mining traffic when they have PR and market the...
That’s very fashionable, the off the shoulder thing.This is my order thing, it kills me, I don't understand why I keep showing up. So if anyone knows the my orders answer, let me know, but maybe people just can't find their orders, and I don't know, I keep seeing that, it’s annoying.. Alright, so we brought data together, sourced from Pacvue and hopefully people know that we are sister companies with Helium 10 with the same ownership. So we have a ton of great data in our proprietary database, that provides a really great view when you're looking at benchmark reports, one of the things to understand is what's the client base that picks up this report? So for us, now that we have tons and tons of 3P data and 1P data, this is a really great view to understand really what's happening across the board, so what did happen? CPCs were flat, increased moderately for sponsored brand ads, click through rates, decreased for sponsored product that increase for sponsored brands, and conversion and ROAS decline for both sponsored products and sponsored brands on data. We'll go through Walmart and Instacart in a sec. Alright, so what happened, and this is where Destaney and Riyaad, feel free to jump in with any kind of insights, but sponsored product spend was up slightly, so for the quarter, sponsored products at 5.5%, sponsor brand down 4.5% quarter over quarter pretty flat for sponsored product, and then for sponsor brand down for 20%.
Any reason why you guys think sponsored brands are turning down so much...
Well, I actually been... So for one vendor another, they've had quite a bit of interesting center negotiations as they go into Q3 in terms of what the priority ASINs look like going into the next year, and for a lot of them where Amazon is sort of stretched profitability as are the brands, we see Amazon asking for more and more. I think that brands are playing a bit more hard ball, so I actually expected that number to be a little bit higher, but we’re seeing some dip in activity from a larger energizing CPG organizations that maybe don't have everything in markets or in a stand-off with Amazon. So they were actually dark for a little bit in turn when they come back into market they tend to over index on SPA, so it's saying no surprises there in terms of that split, but I actually doing that SPA was gonna be a little bit more... I would say probably doing a little bit better job coming to a better middle ground a little bit earlier, we certainly saw it the past two years in terms of those tough negotiations between brands and Amazon.
On the sponsored brand side, I'm also super curious because they haven't really released any more advertising inventory here, so they made almost all their investments in sponsored display, we're seeing some loss for sponsored brands, video being off platform and the OTT roll out, but with limited in inventory, it truly becomes paid a play, so when CPCs get expensive, and as mentioned, everyone starts focusing more on efficiency due to the industry that's an ad side that I think it's under-utilized because they can't afford it.
Interesting, cool. Alright, so click through rate, so CTR for sponsor product ads decreased slightly quarter over quarter on average, 0.32%, and CTR for sponsored brand ads increased 10.3% quarter over quarter at 6.4%. The year increase of 33%. I don't know if you guys wanna talk a little bit about the attributed lifestyle images now available on sponsored brand.
Yeah, I assume that would play a big role, Amazon released the data that a lifestyle image has the opportunity to increase clickthrough rates around 200%. We've seen similar really, really strong lifestyle image, and making sure you're dominating that top of search placement does incredibly well.
You can add an influencer or that you're utilizing from your off-platform, you can have your lifestyle images with all of your products, which can increase your basket quantity, there's so much opportunity with it, and it takes up such a large portion of the page. I think it was an awesome roll out.
CPCs remained relatively flat, quarter over quarter. Anything on this one? Pretty flat. Which is good. Alright, and then conversion rates decreased in Q2, the sponsored product conversion was down 4.2%, sponsor brand pretty flat, and then quarter over quarter both relatively flat at 1%, and then ROAS had very little change during Q2 Sponsored Product ROAS down 4.4% with the quarter down 2.5% sponsored brand ROAS was pretty much flat down 0.7%, and kind of the same for year over year.
Alright, we'll do some quick category insights and we just pulled out some interesting stuff that we saw, so the pet category CPCs were up dramatically, or there were any people in the pet category watching, but I'm sure you're feeling some pain. There's been a bigger focus on the pet category in May 2022, Amazon hosted the first every Amazon Pet Day, this led to a 77% increase in ad spend year over year in the month of May in the pet category, and a 37% increase in CPCs
Amazon Sponsored Products CPC increased a dramatic, 27% QoQ to an average CPC of $2.38 and rules responsive product, so 13.6% decrease conversion rates also decreased for sponsor products in Q2, so I guess the nativist pet category is getting more competitive.
And it really is such a great category for growth... That has been for a few years. I think they're projected to have something like a 17% growth this year, and then they maintain double digit growth in e-commerce overall throughout the next five years, and when you think about it, there are so many specialty and niche products in that space. It can be hard to find in a product line that nobody really wants to deal with and carry home, I wouldn't be surprised to see some increased aggressiveness in this space, not just from Amazon, but from other retailers as well. This is always one of those categories, between this and toys, and I think toys might have won, but it was always the battle of who was gonna hit 40% ecom penetration first, but no I love the potential of this category, I think it's gonna go really far over the next couple of years...
Yeah, and just another thing, Amazon, I can't remember the name of the program, but they've integrated almost like an Instacart-like service, I know because I have this special dog food that is not sold directly through Amazon, but I'm able to buy it through a local pet retailer that they deliver to my door, but I buy it on Amazon, it's almost like an Instacart service, and that is... Dog food is really heavy, it's not a great thing to ship, so if you think about the economics, that's a lot better for Amazon is to leverage local people to be able to deliver some of that specialty dog food, that's really heavy. This dog food is high margin, but anyway,
Alright, so the auto categories, so we saw a decrease in CPC and increase in spend here, and a bit more background on the auto category, it's been slow to invest in Amazon traditionally in this kind category... However, Amazon's testing new programs were non-endemic auto clients, I was at CAN this year, I was lucky enough to get to go and the Allen Moss, the VP of ADS, was talking about Hundai. So you just didn't talk about CPG clients.
You talked about Hundai and then Amazon. Alexa, so just kinda shows the importance of the non-endemics and let's see, so most auto-advertisers are still facing out of stocks due to supply chain manufacturer delays, but are participating in retail sponsored events, so Amazon has this sentence month in the spring, drive into outdoors in the summer and winter satin in the winter and fall, which require vendors to pre-purchase packages inclusive of STV and DSP campaigns, and this in turn could affect sponsored ads investment to spike in order to remain relevant and top of-mind in the category. It's a little bit on the auto category, and then clothing, shoes and jewelry, Amazon's really wanting to improve and get more out of the fashion category, this is where I really think influencers are gonna help Amazon because they really focus on the beauty and fashion space, so we're seeing more and more of these influencers drive discovery and curation into Amazon fashion.
Yeah, I think you could do an hour deep dive on just that category along with the cost goal going down in Q2, we've got a number of new 3P sellers in this space, plus the wedding boom from all of the COVID delays, like that category is prime for growth I think you're gonna see that throughout the summer, and even as we close out the year, and even when we think about clothing in particular, I think one of the nice things that Amazon did this year that's gonna be a little bit different than other years, are sort of like a bigger name brand labels participating in prime day, so I think as we sort of dig in to what percent they were offering across the board will see that there's a number of new participants in prime day this year that we maybe haven’t talked about yet.
Even the beauty space and the fashion space, the designer brands been very reticent to go on Amazon for obvious reasons that we are seeing such an increase as they understand that's where their consumers are, so that's gonna be another interesting one to watch is what brands are continuing to go direct with Amazon. Alright, we're gonna head into Walmart, take it away Ri what was new?
Yeah, I do love Walmart this quarter. I think they did so many great things, so I mean, one, obviously the second price option launched to resounding success, making advertising more efficient and Walmart really delivering on an ask that I think they've got ever since we launched, to me, to be honest, or as a reminder Walmart just call, they say, advance second price option, since they're using content relevance as a qualifying factor, if you pay above or below your next competitor, while advertisers, obviously laden with performance, I think we're still seeing a lot of questions as to what relevance means to their accounts, so we see quite a bit of creativity in terms of custom scoring based on content completeness for some brands trying to infer the right to win, there's clearly some sort of layer of category level sales considerations that they're taking into account. So I think it becomes really interesting, the dual accounts had another really, really cool one that I was really happy that they launched essentially allows the advertiser to set different copy and creative on their SBAs. So for organizations looking to run more 360 degree campaigns outside just standard AB test, being able to test against the equator national Latin market, and I think really to bring new life into how and why SBAs are used on the Walmart side.
Top of search trends, another really, really big one and kind of a favorite of mine, not just because it was my request. shout-out to our solid WMC team. But this level of insight is literally fantastic, we use it for demand planning, we identify winners in the space, more importantly, getting a closer look in like the value of the placements and what does Clickthrough conversion share look like in these top positions... What keywords correlate to browsing behavior, what's the ASP in these positions, and how does that compare to the items that you have in market, what organic visibility actually resulted incremental revenue. Oftentimes, we talk about top of page visibility, and I think for a lot of brands there's a rush to want top of page visibility, but when we also ask why... I think you get a lot of really interesting answers. Is this a saliency play, are we looking at brand recall in this space? Are we assuming a revenue lift... And historically that was really difficult to do with this data. I think it makes it a bit more apparent as to what's actually is revenue positive from an organic perspective, and then lastly, the item recommendations which are essentially used to define category level winners on the Walmart side that are not included in advertising.
Walmart, by making these a bit more transparent, are expecting a decreased CPC and increased ROAS due to position within the category, a lot of them driving the insinuating that the category level sales is playing into the content relevancy on the SEM side. It's an interesting one, I think it's a really solid foundation for a new data set, I would imagine theres quite a bit, they wanna play with more here, so I think this one is an interesting release only because they can do so much for that. And we go on to the next one, CPC down ROAS up huge positive story for Walmart again, on the backs of two of their big changes, they enhance search relevancy, which was essentially a blocker for what you can put into market based on organic position was on how you aligned to the bee tree steps were aligned with plus the second price option, so ad spend on Wal Mart up about 26-27% quarter over quarter, but decreased about 3.82% where we look over here, which we could talk about in a second. As a result of CPCs in Q2 average about 80 cents, a decrease of about 23% quarter over quarter down almost 30% year over year, in it be really interesting to see what this does for diminished return logic on Walmart where it allows brands to invest in as they go forward, ROAS follows the same story about 4.83, that's an increase of about 71% quarter over quarter, and 82% year over year, that enhanced search relevancy teams who also have a positive impact on ad engagement click-through rate in this space up about 43% or over quarter, which is literally insane, we see quite a bit of wiggle room on competitive targeting now, and while it's not easy, it's certainly more possible, so I think I'd love to see this function deliver a more share shift strategies that we see on Amazon, but don't necessarily see on Walmart yet
Yeah, the key take away from me, and I hope for the audiences, if you're not on Walmart, you should be... This is a great improvement. There's a first mover advantage for people that come in early and when... So if you're not on Walmart and were kind of considering it, definitely think about testing it out again, and as you can see, the metrics are good.
I think for the omni and non Amazon players, they've been so aggressive in the space and making their platforms better in giving advertisers the confidence to invest, it's been really, really refreshing, obviously fantastic to work with, but I think for advertisers, it's a really cool time. Just taking a look at the Spend differences, so CPC decreased significantly in Q2 which we talked about, Spend increasing to 27%, then bounced back to levels that I don't think we've seen since Q2 of 2021, and we'll probably continue to see the aggressiveness of the space when we look at a year over year numbers, keep in mind one, tons of brands in one each of last year in particular, 3Ps just started to experiment with what Walmart dot com can do for them. We also saw their expansion to international sellers, so we're really just seeing that even out now, also testing on The Trade Desk from within your Walmart budget's definitely impacted when we're looking at your search numbers overall, but investment is certainly up in this space. We know brands are gonna be aggressive, they put a lot on faith in the second price option, which is paying off well, and that as brands shift strategy into the back half of the year to maximize total distribution points.
I think we'll see quite a bit more in the search space in particular.
And walmart's being very aggressive, offering incentives for people to start advertising just to try out the platform, so I think that we're gonna continue to see a lot of spend in this space. Alright, let's move to Instacart
Instacart too, not to be left out, Instacart also did a ton of work in Q2. First and fforemost, I guess Canada expansion, if I wanted to start at the bottom the page, initial partnerships in Canada were punting the meet, I think you'll find Wingate scale there. They certainly worked on that in the past 12 months or so, so it really is primary advertising now, landing pages at Shoppable to round out a really interesting spot for Instacart, really great think development and product teams, and I really like that to test in new formats on Instagram as an organization is starting to think about how consumers interact with brands, want Instacart, if they can use media on their own platform to augment that. I think we're still gonna have questions as to what brand recall looks like here, what saliency and reorder rates look like in this spot, but I think you're definitely developing in a way where they wanna be much bigger than last minute, last mile grocery. I think it's gonna be super interesting for them, and then we didn't list the internet-facing piece, which I think is also sort of fantastic and really enables brands to sort of stagger their investment throughout the course of the day with that expunging budgets by like numeral, which was happening also often.
And then CPC up ROAS down on this one. Average CPC went or about $0.96. Is that a 19% increased quarter over quarter and a 9.43 decree year over year average ROAS still at 4.69, so while that's down a little bit or 2%, that's still literally strongest one that you're gonna get especially with this environment. So a 2% dip in ROAS, over 9% increase in CPC is actually quite good in terms of overall platform performance, and as we look towards investments, again, Keep in mind here, we're just taking a look at ad spend on Instacart.. I don't wanna be disingenuous about what we're looking at here, but we do see a 7% dip quarter over quarter and 10% year over year keeping in mind this is only search ad spend. A lot of those have been re-invested into a onsite display for the platform, so it looks at just a bit odd now, but Instacart Display has been quite the hot topic, a really great mechanism for cross-isle plays and something we expect advertisers to continue to test in the coming months. I think what we'll find is that brands are actually much more comfortable playing with cross-isle in display as opposed to search when the CPC can be a bit more aggressive, so they actually think this is gonna be a really cool one for them.
Investment is still high on the Instacart side, brands are still being aggressive in this space, but I think we're starting to find a better balance between search and then display, I think sort to Destaney's point of the managements of total CPA between the different mediums that you can activate within channel was going to be something that a lot of larger brands, especially are going to look for...
Alright, so we are almost done. We're gonna wrap up in just a second. So looking ahead, there's rumors of another prime day in October to start preparing. I think they did Prime Day in October in 2020 during the pandemic, they saw such a great benefit of going demand forward so that you know, you could have spread out the deals, so I think that... We'll see that again, they're already asking for deal recommendations for that, so we'll have another way to practice Prime day and improve from the last one, hopefully not as many glitches continuing inflation to impact brands and sellers. So this prime day, some people just couldn't even participate because they were so profit margin squeezed, so it'll be interesting to see how inflation continues to impact how brands and sellers can continue to sell profitably online and participate in events, the price of container ships are finally going down, so that also was a big impediment, especially the sellers where the cost just skyrocketed during covid, but we're seeing those decrease, Amazon leaning further into influencers, so I think that they're launching more functionality, there's an influencer feature, followers that Amazon has... I don't think it has a ton of traction, but it's free, and you can email your followers about new product releases and promotions to get alerts, so we'll see how that continues to play out.
This future of Amazon private label, that's an interesting one. And one of the questions that we got, one of the biggest benefits, I think of that is, even though Amazon private label has done really well in consumer electronics to their devices, but a lot of other places, it hasn't done well, and it's been a big distraction to brands, they just get really mad and angry about the fact that there's a new private label that just copies them, so... Less noise for them. It's gonna be helpful, I think. And then new product releases from Amazon around the Amazon video builder, so turns images and text into a video slide show with music, I think just to continue focus on video and more formats so you can understand and learn about products is gonna be helpful for the ad space, you guys... What do you guys think?
I have a really unpopular opinion on private label, so I'm cautious as to sharing it, but... So we... From a regulatory standpoint, I absolutely understand. I think from a UX perspective, in terms of essentially treating it like a merch placement in many instances to offer unfair competitive advantage is certainly something has to be considered coming out of the game all together though I think it's a little bit finicky for Amazon sales numbers overall, so yes, a little bit to me, crappy. And obviously, lots of brands here are brands for 20 years, but when you look at sort of how brands are trying to balance profitability, oftentimes, it means that you're doing larger pack sizes, and it's really difficult to drive that because you're in this for 15 or 20 bucks, you're gonna buy a mouth wash, your only options are $24... Well, the brands may not like a slim or something similar, being able to come into Mark with a $5 item to sort of drive penetration in the category, I think is gonna be an interesting one so I worry about what the ASP looks like on average on the SERPs with less Amazon private label, and I would imagine...
I would hope that the 3Ps come in and take over that space, but I think as of right now, it does offer a nice sort of lower ASP option to reduce barrier to entry.
I’m excited that they're not gonna be winning the number one placement on the page with feature from our brands in, that was always a brand question, it was, How do we win that place, but I'm like, Well, we can't... So that's a nice tiny addition that hopefully goes away
Alright, well, thanks for everyone sticking with us, we do have a couple of questions and we have the experts here to answer them, so why don't we start with... This one from Tom McIntire. So he's got a couple of questions. I have a question about search terms for Amazon and Walmart, I've noticed many of the search terms we're paying for on Amazon are for products or a silo product we don't actually sell. Amazon is showing our ad even when the search term doesn't 100% match our product, something may be a broad... I don't know what you think...
You're looking at search terms I don’t know if I can answer, but I don't know if he's looking at search terms on the paid search side or is looking at search terms and talking about the search term report from ABA... I say when it comes to the search term report from ABA... If you're concerned that you're popping up for items that are seemingly irrelevance, keep in mind that Amazon is very much a Winner-take most system, so the number of keywords that you rank for or the better that you do on sort of a core keywords, Amazon is basically creating a neighborhood based on semantic matches and you're ranking for a ton of associated keywords within that neighborhood. Amazon does move that up and measure sales velocity, attributed to the keyword every 24 hours, you can see quite a bit of fluctuation there, but that would be the answer on the organic side, and again, I don't know if you're talking bout the paid search side. Walmart does the exact same thing when I say that, the difference is that Walmart is a little bit better with its semantic matches, so Walmart has a much stronger category level visibility as opposed to Amazon where it's completely synthetic, so it's essentially mixing matching keywords to determine what that neighborhood looks like
On the ad side, real fast, I'll jump in and say that it sounds like you're probably relying on auto-targeting or broad targeting, so if you're targeting the term T-shirt in broad match, they're probably gonna show you for t-shirt, extra small T-shirt, v-neck black and that may not be the style of your product, so you need to go in and you really collect All of your search term data, figure out what's not working figure out what is working, and then launch campaigns that are more directly targeted, so focusing on exact match and only the styles that you're focusing on and want to show up for, so everything that you're showing for on the ad side is directly within your control, it's just your targeting types and campaigns that you're launching, so be a little bit more specific, if you really don't want your ad to show, you can always negate those terms and... Or pause those keywords. But that can necessarily not be in your best interest, so be very careful about what you're doing on either of those, but you have direct control over everywhere your ad shows with the appropriate targeting.
And also what's your perspective on the brand name and title, and if..Yes. Where should it be placed?
I do have a quick answer from what I've heard, it's little bits of taking up space for your actual SEO keywords, right. Amazon typically shows your brand name anyways directly with the store page right above your title, so do you really need to take your brand name and also put it in your title when you're taking up space for keywords you can rank for? But not my area of expertise, yeah.
I would say that it's one of those things that people love to sort of over think what you think about it, and we can do a two hour session on A9. It’s not complicated, it's quite easy to understand what's happening and it's so just sort of... Wait, those various components, I wouldn't go too crazy with it, when somebody's looking for a brancd there, your first call is going to be the by line and not the actual title, I think from a user standpoint, you can test for clickthrough rate and what CPR looks like by including or not including the brand name in there, but the insinuation that's not the brand name and there's going to have a Dutch mode impact on sort of your SEO, I think is a little bit faulty. 'cause again, keep in mind, as long as your bylines are consistent, you should be okay, you can't be in an environment in which you've got multiple sub-brands and overlying extensions and your bi-lines are all kinds of messed up in turn... Okay, put it in the title. I would do it as a general best practice, I always do anyways, in relation to your keywords, and we keep two things in mind, one using the brand analytics data to actually get high volume keywords, and that can differ...
If You're building something inside out vs if you just wanna go for a high category targets upfront, they are plenty of ways to do that, but in conjunction and independent media, and making sure that they're within the first like 90 characters. So I have to double-check the actual character counts on there because the difference between Amazon will allow for indexability versus what they'll shoot over to the Google side. So putting it closer to the front, just guarantees that it's within indexable limits. Again, I don't remember the exact character count, but I can find it, if you email me and we can chat about that because I love Amazon SEO can talk about it all day.
And I think that... I get in trouble when these go too far past and we're heading towards the hour mark, so... Thank you everyone for joining us today. We had a great audience and people actually stuck with us for almost the whole hour, so must mean that we're giving you some good content and which is our goal. Just as a reminder, Go to Pacvue.com/reports and you can download the CPC report. Thank you so much to Riyaad and Destaney, these guys are truly geniuses and be leaders in this space, and hopefully you guys got a good view into Q2 and we'll be back for Q3. Thanks everybody.
The data from Q2 is here. Join Melissa Burdick, President at Pacvue, Riyaad Edoo, Senior Director of Product Management at Pacvue, and Destaney Wishon, Co-Founder at BetterAMS, on July 20th at 8 am PDT to learn:
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