Amazon ad spend up 3.5X Thanksgiving week compared to pre-holiday ad investments

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Amazon reported Cyber Monday was its biggest shopping day in history, beating out this year’s Prime Day sales results and representing nearly 30 percent of the online sales market for the day. Not only was it a big day for sales, but Amazon also saw its biggest single day of ad investments on Cyber Monday, according to the digital advertising platform Kenshoo.

Kenshoo says its clients invested 2.2 times more in Amazon native ads on Cyber Monday compared to what they spent on Prime Day, with overall Amazon ad spend during the five days between Thanksgiving Day and Cyber Monday up 3.5 times the average pre-holiday ad investment.

Prime Day gives advertisers an opportunity to “prime” the pump. Margo Kahnrose, vice president of marketing for Kenshoo, says the increase in ad spend on Cyber Monday compared to Prime Day signals that advertisers are confident their Amazon investment is going to pay off.

“The Q4 shopping days are so critical to brands that they can’t go into them with experimentation in mind — they’ve got to be a well-oiled machine for predictable return,” says Kahnrose, “Prime Day is an unparalleled opportunity for insights gathering — about which products to promote, how to automate and optimize for scale — before holiday ‘go’ time, and that’s how brands should think about it: as a dress rehearsal.”

Kenshoo says its clients continued to see a positive return on Amazon ad spend throughout the Thanksgiving holiday shopping week, and predicts advertisers will keep investing on the platform throughout the year.

“Brands want to invest more because of the almost immediate payoff they see,” writes Kenshoo on its company blog. The company says one of its clients, which is also one of Amazon’s Top 50 Sellers Worldwide, saw a 40 percent increase in conversion rates using Amazon advertising.

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For Amazon, more sales translates to more ad dollars. As an ad platform, Amazon is in a unique position among its online retail competition. The e-commerce site owned the largest share of online revenue during the Thanksgiving shopping week. Ken Cassar, the principal analyst for Rakuten Intelligence, wrote last week that Amazon’s holiday lead feels insurmountable.

Cassar told Marketing Land that Amazon’s peak holiday season will likely last all the way up to the week prior to Christmas.

“Amazon’s peak holiday share period has recently been the period after Cyber Monday leading up to a week before Christmas with customers reverting to old habits, trusting that Amazon will deliver packages in time,” says Cassar. The analyst tells Marketing Land that, according to Rakuten Intelligence’s data, this year’s 36-hour 2018 Prime Day was still the company’s biggest two U.S. sales days, surpassing its combined sales from Black Friday and Cyber Monday.

“On Prime Day, Amazon has very little competition, while Cyber Weekend competition is fierce, with brick and mortar retailers spending significant ad dollars and offering highly competitive promotions,” says Cassar.

Even with the holiday competition, Amazon still took the largest share of online dollars. Kenshoo says that Amazon’s holiday results prove that when advertisers invest in Amazon ads, the company’s sales results go up.

“As strong as Amazon is at bringing in peak shopping day orders, it’s clear that their investment in building a native ad platform for partner brands to get involved and help drive sales is paying off,” says Kahnrose on Kenshoo’s blog. She predicts Kenshoo clients will “keep the pedal on the gas in 2019” in terms of their Amazon ad spend.

Why it matters. For brands and marketers, every holiday season brings the need to optimize digital ad spend — especially during the crucial five days from Thanksgiving through Cyber Monday that make up the year’s most popular shopping period. With Prime Day historically happening in July, advertisers have a chance to test campaigns on Amazon’s ad platform in advance of the coming holiday season, and modify their spend accordingly before the November holiday season.

For advertisers with fewer dollars to allocate when it comes to holiday ad budgets, using Prime Day as a testing period — or as Kahnrose calls it, a dress rehearsal — is a sound way to test the Amazon “waters” before diving in during the holidays.

The post Amazon ad spend up 3.5X Thanksgiving week compared to pre-holiday ad investments appeared first on Marketing Land.

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