As expected, Prime Day 2018 was, from a sales perspective, a massive success. According to Amazon, “Sales during this year’s Prime Day surpassed Cyber Monday, Black Friday, and the previous Prime Day, when comparing 36-hour periods, making it the biggest shopping event in Amazon history”.
While Amazon didn’t mention any specific sales figures, they did say that Prime members purchased over 100 million products, with small and medium sized businesses on Amazon “far exceeding” $1 billion dollars in sales this year. You can read their press releases on the event here and here.
Examining Amazon ads performance for Merkle advertisers, several trends emerged to take note of.
What We Observed During Prime Day
Conversion Rate Remained Strong Despite Massive Increases in Traffic
Merkle advertising performance data mirrored the record numbers announced by Amazon for their annual summer “holiday”, with almost every Merkle client seeing record sales days on the platform.
As you can see in the graph above, traffic was strong throughout the 36-hour event, rising on Monday and peaking Tuesday. The lift in click traffic was driven by a combination of heavy investment in advertising programs and surging traffic to the site.
Sales per click surged on both days of the event. Buoyed by high purchase intent from customers combined with competitive product offers from advertisers, conversion rates remained strong throughout the duration of Prime Day.
Sponsored Product Ads Generated 86% of Advertising Revenue on Prime Day
Unsurprisingly, Sponsored Product ad performance anchored advertising programs, driving over 86% of sales over the two-day period; the revenue share by ad type during Prime Day was close to the average seen throughout the year.
Though Headline Search Ads did not garner a bigger portion of the revenue pie than normal, they did maintain their share while also seeing an even larger lift in sales per click than sponsored products, making them the most efficient ad type this year.
Prime Day Spend Was 233% Higher Than Comparable Monday & Tuesday Sales Days in 2018
Smart budgeting and timely investment were both key to capitalizing on the influx of eager shoppers on Prime Day.
Merkle has seen spend on Amazon advertising increase remarkably over the last several years, and as Prime Day continues to see sales figures comparable to or better than other major shopping holidays, budgeting and spend specifically for Prime Day have scaled right along with overall investment. This year saw retailers spend an average of 3x more on the Monday and Tuesday that compose Prime Day than previous Mondays & Tuesdays in 2018.
Average Cost Per Click Showed No Big Increase Compared to Days Leading Up to The Event
In traditional Paid Search, it is not uncommon to see cost per click increase during holiday and other high traffic time periods. Amazon advertising seems to be immune to that trend.
Despite aggressive bid pushes by Merkle throughout the entirety of Prime Day, average CPC remained relatively constant over both Monday and Tuesday and well within the normal ranges observed by Merkle leading up to the event, with some average ad CPCs coming in at less than half the value of their bid. Similar CPC trends were noticed in 2017 as well, leading us to believe that large lifts in traffic are driven primarily by the fact that the proverbial pie of customers to advertise to is much larger on Prime Day, rather than the notion that advertisers are capturing a greater share of said pie with more aggressive bids.
Amazon’s lack of up-to-date intraday reporting on performance and spend also likely hindered the ability of campaign managers everywhere to accurately pace programs and avoid leaving sales on the table.
“Top of Search On Amazon” Ad Placement Proved More Valuable Than Other Placements
Amazon rolled out a reporting tool this year that shows ad performance by placement for Sponsored Products. Ads are either categorized as serving at the “Top of Search on Amazon” or at “Other Placements on Amazon”.
Merkle observed a relatively even split of click traffic between the two placement categories (51% vs 49%), but saw Top of Search ads generate 73% of sales during Prime Day on 61% of spend. The increased visibility provided by the Top of Search placement definitely paid dividends during this year’s Prime Day, but advertisers did have to pay the premium that the site’s best placements demanded.
Interested in how these Prime Day trends compare to recent months? Check out Merkle’s recently released Q2 DMR.
What We Learned from Prime Day
Offering A Great Deal To Consumers Matters
This may seem obvious, but if you spent any time skimming through the thousands of “deals” on Prime Day, not all of them were worth it. NYT Company Wirecutter found that of the 49,200 deals they analyzed during the 36 hours of Prime Day, only 258 were real bargains.
With that being said, having a genuinely good deal that isn’t seen very often was particularly helpful in maintaining high conversion rate and generating great sales figures. Amazon revamped Lightning Deal submissions in what seemed like an attempt to provide better value to customers, so running one or several of those was a good way for sellers to signal that the price being offered was at least a little bit better than normal. Whether using the Lightning Deal mechanism was worth the $750 fee Amazon charged will vary depending on what sellers decided to run a deal on.
Amazon Hasn’t Figured Out How to Handle the Increased Site Traffic Generated by Prime Day
During Prime Day last year, Amazon experienced connectivity issues with both its site and mobile app as the influx of shoppers placed a strain on their ability to display site pages properly. Coming out of that experience, many thought that Amazon shoring up their ability to handle more traffic would be near the top of the list of things that would improve in 2018.
Sadly, Amazon hasn’t quite figured out how to keep their site from going down during Prime Day. This year, the site struggled with keeping pages up for most of Monday afternoon after Prime Day began at 3pm. As much as we loved seeing pictures of cute dogs on error pages, the struggle to even navigate the site was surely frustrating to the masses of folks looking for some great deals on during the first hours of Prime Day 2018.
Luckily, the site seemed to be functioning much better on Tuesday, but we will be left wondering if Amazon could have added to its already record sales day with a better functioning site.
Amazon’s Reporting System Could Be More Robust
Google’s ability to provide intraday data in a concise and up-to-date manner helps advertisers tailor their bid pushes and spend plans so that the most dollars are being spent when customers are most likely to convert. That intraday data is sorely lacking in both AMS and 3rd Party Amazon Advertising and, as mentioned before, likely contributed to CPCs remaining relatively constant throughout the event as competitors without automated bidding were probably hesitant to change bids without performance numbers to reference.
We’d love to see spend and traffic data updated regularly throughout the day and for Amazon’s reporting system to make that data available in a “Performance by Hour” report. This will go a long way in making sure that advertisers are maximizing their program’s potential during not only Prime Day, but during other high traffic times throughout the year as well.
To no one’s surprise, Prime Day smashed Amazon records and helped many sellers set records of their own. Underlying the massive sales success was a combination of deals worth purchasing, increased advertising investment, and a flood of consumers willing and ready to buy.
Still, this year’s Prime Day was by no means picture perfect, with site issues for consumers and an opaque view into intraday performance for advertisers to keep everyone on their toes. As this annual July sale continues to stake its claim as the premier online shopping event of the year, improvements will undoubtedly come for future iterations.