The brand guide to incrementality: Boost profits with AMC and Brand Analytics

This webinar, hosted by Rolando Galeana from Intentwise and featuring Sreenath Reddy (CEO, Intentwise) and Jason Landro (Co-CEO, Nectar), provides a comprehensive guide for brands to leverage Amazon Marketing Cloud (AMC) and Brand Analytics to drive incremental profit on Amazon. The session emphasizes moving beyond traditional metrics to make data-driven decisions, refine ad targeting, and uncover new growth opportunities.

Why Traditional ROAS Falls Short on Amazon

Historically, brands have anchored their Amazon strategy to Return on Ad Spend (ROAS). However, this approach can be detrimental to incremental growth for several reasons:

• Influence on Organic Performance: Amazon rewards brands that convert traffic well, organically. Paid traffic can significantly influence organic placement, traffic, and sales. Relying solely on ROAS overlooks this crucial full-funnel impact.
• Overspending on Branded Search: ROAS-driven strategies often lead to overspending on branded search terms, which may not be incremental. Accurate measurement of branded search effectiveness is essential.
• Fragmented View: A healthy brand sees an increase in branded searches over time. It's crucial to measure how upper-funnel and mid-funnel strategies, including off-Amazon advertising, influence branded demand on Amazon.
• Connecting the Dots: Advertising performance needs to be connected to organic rank, share, and repeat behavior to understand the holistic impact.

Unlocking Insights with Amazon Marketing Cloud (AMC)

Amazon Marketing Cloud (AMC) is a powerful tool for connecting data points and should be utilized by brands of all sizes, regardless of their ad spend, as there's no minimum spend barrier. It democratizes access to sophisticated insights, even being integrated into the Ads Console. AMC allows for a five-year lookback on shopper data for 1P brands, a capability they previously lacked, and enhances 3P insights by connecting hashed buyer IDs to ad data.

Brands can streamline their use of AMC in four key ways:

1. Measurement of Ad Strategy and Organic Sales

AMC helps connect upper-funnel and mid-funnel advertising to actual sales, providing a clearer picture of how different ad types contribute to overall performance.

2. Identifying and Creating High-Performing Audiences

AMC enables the creation of highly targeted audiences for remarketing and acquisition:

• Abandoned Cart: Target shoppers who added products to their cart but didn't complete a purchase.
• New-to-Brand Customers: Build audiences of potential new-to-brand customers or bid up for those likely to be new-to-brand.
• Customer Lifetime Value (CLTV): Understand the long-term value of a customer over five years, particularly powerful for consumable businesses. This allows for more informed customer acquisition cost calculations and ASIN-level CLTV breakdowns.

3. Connecting On-Amazon with Off-Amazon Data

AMC helps bridge the gap between Amazon and external platforms:

• D2C Data Upload: Brands can upload hashed customer data from their Direct-to-Consumer (D2C) sites to analyze audience overlap, exclude existing D2C customers from Amazon campaigns, and build lookalike audiences for Amazon targeting.
• Web Pixels: Installing Amazon ad tags on a website allows for better integration of off-Amazon traffic and conversion data, creating a tighter feedback loop for DSP campaigns and automated audience building.
• Breaking Down Walled Gardens: AMC helps to understand the incremental impact of advertising across different channels, informing budget allocation and overcoming traditional "walled garden" challenges.

4. Path to Purchase Report

This report visualizes combinations of ad types (e.g., DSP, Sponsored Products, Sponsored Brands, Sponsored Display) that lead to the highest purchase rates.

It often shows that DSP, when in the mix, can lead to substantially higher purchase rates.

It's crucial for measuring the effectiveness of top-of-funnel DSP advertising.

• Campaign Naming Conventions: To differentiate discovery vs. remarketing DSP, clear campaign naming conventions are essential for effective analysis.
• Custom queries can be crafted to precisely compare the impact of DSP as a first touch versus remarketing.
• Audience Building: Beyond remarketing, AMC can create audiences from the 98% of people who search for high-intent keywords but don't click an ad, offering a high-purchase intent segment for DSP targeting.
• Audience Exclusions: To prevent targeting customers who would have purchased anyway, using exclusions (e.g., excluding recent purchasers) and longer consideration windows can ensure incremental reach.
• Lookalike Audiences: If a specific audience cohort is too small, lookalikes can be created by matching attributes to a much larger set of potential customers.

Maximizing Impact with Search Query Performance (SQP)

Search Query Performance (SQP), found in Brand Analytics, provides a brand-level view of ASIN performance on relevant keywords. This data includes impression share, purchase share, total search volume, and various organic and paid metrics. It is considered one of Amazon's most powerful, yet underutilized, tools. While available to sellers for years, it's now in beta for vendors and is expected to roll out widely.

Benefits and Applications of SQP:

• Measuring Branded Spend Incrementality: SQP allows brands to precisely measure the effectiveness of branded search by correlating ad spend against purchase share at a keyword level. This helps identify the optimal spend for branded terms, ensuring money isn't wasted on non-incremental clicks.
• Identifying High-Revenue Search Terms: Brands can uncover keywords with high search volume and low impression share where they are highly relevant, indicating opportunities for increased ad spend and conversion share.
• Improving Creative Performance: By comparing impression share to purchase share, brands can identify if their creative assets need improvement when many eyeballs are captured but conversion is low.
• Prioritizing Efforts: SQP helps prioritize efforts by focusing on search terms that, even with small improvements, can significantly move the needle for the business.
• Tracking Ad Spend Influence: It allows tracking how ad spend influences various metrics like share of voice and purchase share.
• Incremental Revenue Opportunities: By overlaying ad spend data with Brand Analytics data (e.g., ASIN conversion share, count of top 3 appearances), brands can identify specific ASINs and keywords where increased investment could lead to higher conversion share. This data facilitates testing hypotheses based on competitor performance and pricing.

Holistic Business Insights

P&L Tracker and Contribution Margin

It's crucial for brands to understand their true profitability, not just revenue.

• Detailed Analysis: Automated P&L trackers, connected to Amazon accounts, can pull chargebacks, shortages, and terms for 1P. By uploading landed costs, brands can calculate true contribution margin.
• Granular Insights: This analysis should be filterable by product, ASIN (child/parent), custom group, and category to inform advertising strategy at a granular level.
• Informing Strategy: Understanding SKU-level profitability helps in allocating advertising spend effectively, identifying loss leaders, and prioritizing investments.

Customer Lifetime Value (CLTV) Analysis

Now attainable through AMC data, CLTV analysis is particularly important for consumable brands.

• Retention Trends: Tracking month-on-month retention trends helps identify typical customer drop-off points.
• Tailored Advertising: Knowing where customers tend to lapse allows brands to tailor their advertising strategy (e.g., retargeting campaigns) to maximize customer retention and value.
• Customer Worth: Understanding the true worth of a customer enables more informed decisions on acquisition costs and retention efforts.

Key Takeaways

• Embrace Data and Evolution: Do not be afraid of the wealth of data available. The capabilities of retail media and Amazon advertising have dramatically evolved, and brands must evolve with them.
• Step Out of Comfort Zones: Push beyond familiar methods and embrace new data and features to stay ahead, grow, and maintain profitability.
• Prioritize Incrementality: Focus on strategies that drive true incremental growth rather than simply increasing ad spend or relying on outdated metrics like standalone ROAS.