Amazon's new metrics help advertisers pinpoint cost of acquiring customers

Dive Brief:

Amazon is offering advertisers a new set of metrics, called new-to-brand, with the goal of helping identify strategies that drive new customer acquisition and growth on the platform, the company announced via a blog post.
New-to-brand metrics can measure whether ad-attributed purchases were made by an existing customer or a consumer purchasing the brand’s product on Amazon for the first time. Metrics also include new-to-brand purchases and sales, purchase rate and cost per new-to-brand consumer. With the new tool, display, video and Sponsored Brands advertisers can now measure and optimize campaigns, and plan future marketing strategies using more than 100 campaign reporting metrics.
Pet supply brand BarkBox used new-to-brand metrics and was reportedly able to see that 86% of its Amazon sales since Nov. 1 were from customers who had not purchased its products on the site over the past year, according to sources cited in a Digiday report. However, the data could be skewed since the company just started selling its products on Amazon within the past year.

Dive Insight:

Giving advertisers the ability to better measure whether ads led to purchases and the cost of acquiring new customers on the platform is a move intended to help Amazon continue to grow its ad sales. The company now ranks No. 3 among digital ad platforms, behind Facebook and Google, and was projected to generate $4.61 billion in U.S. ad revenue in 2018, according to eMarketer.

The new-to-brand tool could help Amazon broaden its appeal as an advertising platform and offer marketers the ability to build brand awareness. The metrics could be appealing to major brands, like Procter & Gamble, which has said it will focus on search, ecommerce and social marketing for brand-building. Nontraditional or direct-to-consumer brands could also find the metrics appealing as they are looking for ways to grow their customer base, according to Digiday.

While the new metrics could be useful to brands, they come with some limitations. The metrics are available only on certain Amazon ad products: Sponsored Brands ads that show at the top and bottom of search results and display and video ads purchased programmatically through Amazon DSP, and are not available on Sponsored Products ads. Sponsored Brands ads are less appealing to brands because they are more expensive than Sponsored Products ads.

The 12-month timeframe is another limitation, especially for brands selling high-priced items or products and may see fewer sales as those items aren’t replaced as frequently, according to Digiday. Amazon is also not launching new tools for advertisers to use new-to-brand to retarget new customers or target consumers displaying similar characteristics.

Most Amazon advertisers already see value in their Amazon campaigns and about half report spending more than $40,000 per month on advertising on the site, a new report by Feedvisor revealed. Some marketers are shifting up to 60% of their search budgets usually allocated to Google toward Amazon, with many attracted to the e-commerce site for the ability to reach consumers throughout their full shopping journeys from product search to purchase.