Q3 2021 CPC Report

See how your performance stacked up against the benchmarks, as we take a deep dive into the largest dataset of Amazon Advertising metrics, based on hundreds of Pacvue advertisers across categories.

As reopening plans in the US remain in an uncertain environment, brands faced heightened challenges in two other areas in Q3 2021. Supply chain disruptions and inventory issues continue to cause headaches, both in terms of shipping times and the increased cost associated with logistics. And increased commodity prices are diminishing profit margins. As a result, we saw many brands conserve their budgets in Q3 as a short-term measure.

Some key takeaways that we’ve observed with Amazon Sponsored Products ads are that we didn’t see any major spikes or declines in daily spend, although Sponsored Products has increased slightly more while Sponsored Brands has seen a minor decline in spend year-over-year. And after leaving the top 10 for the first time in over a year in Q2, “face masks” quickly rose to the most top searched item as the delta variant took hold throughout the US. Cleaning supplies and some of the traditional pandemic supplies are no longer in the top 20 most searched items. “Pop its” also remains as one of the most searched items quarter after quarter.

• Sponsored Products Ad Spend is now up 41.8% year-over-year.
• Average Daily Ad Spend and Cost-per-Click remained relatively flat quarter-over-quarter.
• The term “disposable face masks” reached the top of Amazon search queries in August 2021, after falling off the top 12 in Q2.
• Face masks, pop it, desk, and earbuds also held the top search spots in Q3.

When budgets are tight, we typically see branding budgets pull back first, while search remains a strategic investment to maintain sales. It’s no surprise that we saw advertisers increase their daily average ad spend budgets for Sponsored Products campaigns in Q3, while we also saw a significant decrease in daily average ad spend for Sponsored Brands across the board. The result is that CPCs in Q3 2021 for both Sponsored Products and Sponsored Brands have remained steady quarter-over-quarter. We do expect to see growth in ad spend and costs again in Q4, and we’ll be watching supply chains closely for signs of normal operations.

• Conversion Rate for Sponsored Products ads increased 16.1% while Sponsored Brands ads CVR decreased 3.9% year-over-year.
• Return on Ad Spend for Sponsored Brands ads decreased 12.8% while Sponsored Products ads decreased 6.1% year-over-year.
• The Electronics category is seeing dramatic increases in CPC and daily average ad spend in response to consumer demand.

What to Look Out for in Q4

• ‍Prepare a backup plan now in case you run into inventory issues – Sales are expected to be strong this year, but supply chain issues are expected to remain throughout the holiday season.‍
• Holiday and seasonal events are starting earlier and earlier – Consider pulling your campaigns forward, as Amazon has already started its holiday shopping deals.‍
• Retail media continues to grow across all sectors, Lowe’s is the latest – Retail media continues to grow, if you want to win top spots across retailers now is a good time to start testing.