Two weeks ago Amazon announced that it will now provide new-to-brand metrics that segment new vs. existing customers for display, video, and Sponsored Brands ads. The update is aimed at giving advertisers a better sense of the incremental impact of ad spend and assurance that brands aren’t just paying for ad clicks from existing customers that are likely to reorder anyway.
However, the new metrics come with a couple of limitations advertisers should be aware of.
Sponsored Products Account for Far More Spend than Sponsored Brands for Most Advertisers
In Q4 2018, Sponsored Products accounted for 87% of all ad investment across Sponsored Products, Sponsored Brands, and Product Display Ads. Sponsored Brands accounted for just 12% of spend.
As such, it’s disappointing that advertisers won’t be able to view this kind of performance segmentation for what’s widely considered the most important ad format. Hopefully Amazon will be able to expand new-to-brand reporting to Sponsored Products soon.
Advertisers also need to be aware that simple new vs. existing reporting doesn’t fully answer the question of the incremental value of ads.
Amazon Can’t Truly Tell When a Customer is Completely New to All Brands
Amazon’s metrics are based on Amazon data, which is certainly robust given the massive scale of its ecommerce business.
Still, for Amazon sellers and vendors that sell products on their own websites or through other marketplaces, Amazon would have no record of when a customer has purchased from a brand before on any site but its own. That’s why Amazon’s announcement phrases the new metric as reporting on when ‘an ad-attributed purchase was made by an existing customer or one buying a brand’s product on Amazon for the first time.’
Given that Amazon doesn’t share any customer data with brands selling on its platform, there’s no way for advertisers to use CRM information to identify Amazon purchasers as truly new-to-file or existing across all selling platforms.
This doesn’t mean the new metrics aren’t useful, but brands should certainly keep in mind that Amazon’s tracking is limited solely to its own ecommerce platform when looking to adjust performance goals based on the new metrics.
All in all, it’s great to see that Amazon is marching towards providing advertisers greater performance insight to help better assess the value of ads. Hopefully it will move to expand new vs. existing customer attribution to Sponsored Products soon.