Software company Sellics released data yesterday showing Amazon
In its 2022 Amazon Advertising Benchmark Report, Sellics found that Amazon also compares favorably with other major players like Instagram (-79%) and LinkedIn (-86%), as well as close competitor Walmart
Cost per click of various advertising platforms.
This is despite cost-per-click on Amazon steadily increasing. Sellics data also show that the cost-per-click on Amazon’s US site has increased by 22% year-over-year from 2021 to 2022.
This comes at the same time as Facebook and Google become less attractive advertising destinations with the deprecation of the 3rd party cookie. Amazon, with its first party sales data, is relatively immune to this effect.
Amazon is not a silver bullet, however. And cost per click is not the yardstick that all brands should be using. While it is an effective measure of relative affordability, brands need to also consider what the purpose of the advertising strategy is. A brand who’s looking to grow overall market share should not be overly concerned with profitability-oriented metrics like cost-per-click (CPC) and return on ad spend (ROAS).
This is the same as many of the other metrics that were tracked by Sellics in this report, and that often appear in other industry benchmarks. Click-through-rate, conversion rate, average order value all are metrics focused on an objective of profitability. The retailers themselves operate with their own agenda, offering metrics that are either in their interest or the simplest to track and report on.
Brands who prioritize market share growth as an objective should be tracking metrics like share of voice, first time buyers, and market share - metrics that are generally not shown in a retailer’s advertising dashboard.
Amazon advertising certainly represents great value-for-money for advertisers right now, even if its own ad rates are increasing. And the variety of advertising types with different targeting and display options certainly means Amazon earns its place in the new advertising ‘triopoly’. But all brands need to be wary of which metrics they select to measure their financial objectives - not always which is the cheapest platform.
