Do you know how many of your shoppers on Amazon actually come back and how many are new?
Well, Amazon has announced this new set of metrics which will help sellers know the cost of acquiring new customers so that they can better measure and optimize their brand’s marketing initiatives. According to the e-commerce behemoth, this metric will make John Wanamaker’s conundrum, “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half,” a thing of the past.
What is Amazon New-To-Brand Metrics?
The new-to-brand metric allows advertisers to measure the orders and sales generated from the first time customers over the prior year. The order will be tagged as new-to-brand if the customer buys the brand’s product on Amazon for the first time in the last 12 months, starting from the present date. The look-back period includes all the purchase activity on Amazon and not just that is ad-driven.
Note: Data will be available from November 1, 2018. If you select a start date prior to November 1, your new-to-brand metrics will be calculated using November 1 as the start date, so no data will be produced.
Note: This image is taken from Amazon.com for reference purpose.
With the introduction of new-to-brand metric, brand owners and advertisers will now be able to:
- Optimize campaign so that they can acquire new customers and drive loyalty from the existing customers
- Identify and measure the cost to acquire new customers
- Invent new marketing strategies to effectively reach the acquisition goals
New-to-brand has given advertisers three new campaign performance metrics:
- Total new-to-brand purchase and sales
- New-to-brand purchase rate
- Cost per new-to-brand customer
Marketers will be able to see campaign performance like:
- New-to-to-brand orders: The total number of orders on Amazon which are acquired by a brand from a new-to-brand customer over a one year look back window from the present date.
- Percentage of new-to-brand orders: The percentage of total orders of advertised products which are purchased by new-to-brand customers.
- New-to-brand sales: The total sales (in the local currency) of new-to-brand orders.
- Percentage of new-to-brand sales: The percentage of total sales (in the local currency) of new-to-brand orders.
- New-to-brand metrics can be viewed within your campaign performance dashboard and can also be extracted in report formats for display and video advertisers.
New-to-brand metric is applicable for which advertisement types?
New-to-brand metric is available for Sponsored Brands (ads that populate on the top and bottom of the search result page), display and video advertisers (both purchased programmatically through Amazon) on all the Amazon marketplaces. All of the above three advertisement types are generally run by marketers to generate brand awareness.
It is only available for above mentioned three ad types and not for Sponsored products which is one of the most preferred ad tools, used by Amazon sellers. The main reason behind this is that Sponsored Product Ads are less expensive than other ad formats and is usually used for driving traffic and increasing discoverability for Amazon product pages.
What does this new addition mean for advertisers?
New-to-brand will help the seller to determine whether the ad-attributed purchase was made by an existing customer or someone who has bought a brand’s product for the first time in the last 1 year. This will enable marketers to optimize campaigns to develop brand awareness and accelerate customer acquisition, relocate spend and plan strategies using 100 campaign reporting metrics.
This metric is extremely important if brands want to know how efficient advertising on Amazon was in winning new customers. It appeals to huge brands that are investing their marketing dollars on building brand loyalty as well as the growing brands who want to expand their customer base. Traditional yet major brand like Procter and Gamble will also look forward to this metric as they want to focus on search, ecommerce and social marketing for brand building.
Why did Amazon release this metric?
Amazon is the most popular digital advertising platform after Google and Facebook and according to eMarketer, it had generated $4.61 billion (USD) ad revenue in 2018. The addition of this new metric will expand the retail giant’s appeal for performance-based advertisers who want to make data-driven decisions. This step may also draw a bigger marketing budget for Amazon advertising.
By introducing this metric, Amazon is trying to prove itself as a brand-awareness-driver, which will help it stand out amongst the traditional advertising platforms. So, new-to-brand can be considered as one of many steps that Amazon has taken to pull the market share from Google and Facebook.
What are the limitations?
- The 12-month time frame can be considered as a stumbling block for brands selling high-priced items because such products are not replaced frequently and so it may have fewer purchases.
- The data is available from November 1, 2018, which is a short span of time when it comes to measuring brand loyalty.
- This metric is not available for Sponsored products, which is the most popular type of ad amongst Amazon sellers.
- At present, because of lack of brand name, there is a gap with Digital ASINs. Sellers who sell digital products like movie rentals, subscriptions and other non-physical good may lack a brand name and a sale generated from them may be included in reporting. Hence, if many of your orders are from Digital ASINs, it is not advisable to use new-to-brand metrics.
With this data in hand, advertisers will now have better insight into what is the cost of acquiring new customers and how they can shift strategies and apply tactics to accomplish their campaign goals.
eStore Factory will continue to provide the latest updates on Amazon Advertising and best practices brands can apply to drive better results. If you would like to learn more about how to grow your Amazon advertising sales through our Amazon SEO service.