Data Shows How Amazon Reached Its Multibillion-Dollar Ad Goal

Looking at data from several sources shows just how Amazon managed to report revenue of $75.5 billion in first-quarter 2020. In March, the company had 215,411,000 unique visitors and views to its sites, according to Comscore -- only fifth to Google, Microsoft, Facebook and Verizon.

Amazon’s ad business grew 44% to $3.9 billion during the first three months in 2020. Growth, yes -- but businesses selling on Amazon are experiencing a wide range of outcomes as a result of COVID-19.

Merkle reported that Amazon Sponsored Products experienced impressive results in the first quarter, with 87% year-over-year click growth, while sales driven by ads rose 70% YoY.

Conversion rates for Amazon Sponsored Products ads were also about five times higher compared to Google Shopping ads in the first quarter. In addition, Amazon Sponsored Brands spending growth accelerated to 118% YoY. The growth of Sponsored Brands spend rose to 118% YoY, while click growth improved to 43% YoY. 

Advertisers also saw a spike in the cost per click to 52% YoY. Conversion rates were about five times higher for Amazon Sponsored Products ads than for Google Shopping ads in first quarter of 2020.

In fourth-quarter 2019, Sponsored Products conversion rates were about four times higher than Google Shopping conversion rates.

To understand how the pandemic continues to impact advertising spend on Amazon, Teikametrics analyzed data from 1,500 Amazon sellers with a collective ad spend of tens of millions of dollars, across 10 different product categories. 

Aggregated across Teikametrics’ sellers, Amazon sales rose 14%, but the growth wasn’t equally distributed among industry segments. Some 48% of sellers sampled for the report experienced an increase in revenue in March, compared with their January and February average. About 52% saw a decline over the same period.

These relatively even splits belie the extreme impact of COVID-19. The range of outcomes was enormous, and by a significant margin, the two largest groups in terms of revenue change were more than 100%, while some dropped 51%.

Some brands that managed to increase ad spending on Amazon drove strong results, according to the findings. A combination of supply-chain issues and the ability to turn on a dime to address challenges impacted the outcome.

Ad spend in March compared with an average in January and February experienced a 20% increase for Grocery and Gourmet Food, Health and Household, and Tools and Home Improvement categories. 

Search keywords such as "Zinc" and "Kids Multivitamin" saw more than 300% jump in click volume, but “Men’s T-shirt” rose by 1,909% and “Black Leggings” by 468%.

Drawing paper rose 311% and “Art Set” rose 262%. For the Home and Kitchen category, “Room Dividers” rose 692% and Dehumidifiers rose 189%.



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