Amazon holiday shopping outlook: A guide for advertisers

Amazon’s October Prime Early Access Sale is over, so Amazon advertisers will need to refine their strategy for Q4.

Part of that planning revolves around the following:

• The final month and a quarter of the year will be used to map out the budget.
• Which days are the best to push the pedal.

We looked into the more than $400,000,000 in Amazon ad spend that Tinuiti (my employer), manages annually to:

• You can quantify what you’ve seen in the past to better predict what might happen this time around.
• Help brands understand how Amazon ads perform over the holiday shopping season.

Let’s get started.

Looking back at the holiday seasons of 2020 and 2021

Although it may seem difficult to remember, the holiday shopping season in 2020 was very different from any year before for Amazon sellers and vendors.

First, there was the Oct. 13-14 2020 Prime Day event. This was postponed from its usual mid-year timing. Due to Amazon’s ecommerce demand pushing its fulfillment capabilities to their limits in the early months, the change created a Q4 “holiday.”

Sales per click for sponsored product ads rose by more than what would be expected in October. This year, we saw a sequel with the Prime Early Access Sale.

Many of the efforts by Amazon and other retailers to kickstart the Q4 2020 season earlier than usual were made to draw demand earlier in the quarter.

• Shipping delays caused huge headaches at the moment.
• Last-minute shoppers won’t be able get packages as quickly as they would like in the fall season.

This resulted in much earlier shipping cutoff dates to ensure packages arrived in time for Christmas. Our second key divergence in Q4 2020 ad performance was a significant drop in sales per Click in the third week in December compared with 2019.

Shipping delays in 2021 were less severe than in 2020. Cutoff dates for receiving packages in time to celebrate Christmas were more consistent.

Advertisers saw their click-through rates rise in the third week, compared to 2020, which was the exact opposite of what had been the case a year ago.

We expect shipping cutoffs to be closer to 2020 than 2021 this holiday season. This will allow advertisers to see a higher sales per click during the holiday season.

Let’s now look at how total holiday sales volume changed on key days last year.

Black Friday and Cyber Monday are the top-selling days for most brands.

Black Friday (BFCM), Cyber Monday (CM) are still pivotal to holiday shopping season’s sales volume.

The median advertiser saw sales attributable to Sponsored Products ads increase by 45% on Black Friday and Cyber Monday, compared to the average daily sales for November’s first half.

Although we are using median to show how big these days were for middle-of the-pack advertisers here, the surge in sales was definitely greater for some brands than for others.

Black Friday sales increased by more than twice for 35% of sponsored product advertisers compared to the first six months of November. Cyber Monday sales saw a similar increase of 37% of those advertisers.

Pure volume, there is no other day between mid November and December that comes close to the sales attributable to ads on BFCM.

It is possible that some volume was moved forward by the Prime Early Access Sale of October.

It’s not clear how this might impact specific days. It’s likely that Cyber Monday and Black Friday will still be the most popular days in comparison to the rest of the year.

Brands have many opportunities. However, the total sales volume is only one indicator. Trends in sales-per-click show how valuable other days can also be.

In December 2013, the value of ad clicks was close to Cyber Monday highs.

Cyber Monday and Black Friday are sales holidays that consumers are ready to convert.

However, urgency builds towards the end of the season when consumers are at the final stretch and need gifts in plenty of time for Christmas.

This is evident when you look at the percentage of total sales that were attributable to sponsored products within a 24-hour period after the ad click. This can be used to gauge how motivated shoppers were to convert at any given moment.

As you can see, the share that ad clicks resulted in a large increase in purchases on Black Friday and Cyber Monday. It then dropped further, but continued to rise throughout the holiday shopping season, until the shipping cutoffs for Christmas delivery were implemented.

Similar trends can be seen when we look at how sales per Click changed over the holiday season.

Cyber Monday was the peak day for ad clicks, but there were several days in December that came close to this level as the value of clicks rose with shoppers’ urgency.

Here’s the catch: Advertising on BFCM and days before the shipping cutoff can partially explain some of the conversions.

Display campaigns that increase awareness on and off Amazon before the final ad interaction or conversion can often boost search formats such as sponsored products.

Advertisers need to look beyond volume metrics when evaluating opportunities. Bid adjustments should be made to account for changes in expected value of adclicks.

They also have to understand that sales per click increases on any given day could be due to ad interactions on other dates that were not credited with the sale.

Brands should consider more than just the number of clicks to determine how valuable shoppers are during holiday shopping seasons. Different types of shoppers have different lifetime values. Advertisers can use new-to-brand metrics to do just that.

Brands have another incentive to be aggressive on big day with new customers

Amazon defines new-to-brand sales as sales from customers who have not bought from a brand for at least one year. This allows advertisers to gain a better understanding of the types of customers their sponsored brands (and Amazon demand-side platform) are attracting.

When looking at the percentage of total sales attributable to sponsored brands from new-to brand customers during the holiday shopping period last year, advertisers discovered that the most popular days were Black Friday and Cyber Monday. Both saw 76% of sales being attributed to new-to-brand customers.

Dec. 21 came in third at 75% new to-brand share. This is because shoppers were more likely to buy from new brands when they have last-minute gifts.

The lowest share of new-to-brands was 62% in the last two months. This was on Nov. 20, the Saturday prior to Thanksgiving.

These trends can vary depending on the advertiser and swings may be more significant for certain brands than others.

Observing how new-to brand share has trended in past holiday seasons can help brands determine if they should adjust their strategy.

Amazon advertisers can takeaway from holiday sales

There are many unknowns about the holiday shopping season 2022, especially in terms of how the economy will perform.

However, brands need to understand how performance trends in Q4 are compared to the past. 2021 is a good indicator of how different days will be in 2022.

Cyber Monday and Black Friday are still key days that play an important role in holiday shopping season sales volumes.

Brands should therefore have a strategy in place to capitalize on the increase in shopping intent that comes along with these sales holidays.

Advertisers can still find gold in higher click-through rates and increased customer share at other points during Q4.

Amazon marketers should immediately look at 2021 data to get a better idea of when to start advertising.

Search Engine Land’s first article, Amazon holiday shopping outlook: A guide to advertisers appeared on Search Engine Land.