Matt Gallagher is a PPC Specialist at Bobsled, an Acadia company
Amazon's Prime Early Access Sales event (now fondly known as ‘PEAS’) has come and gone, and it provides some great insights into what we can expect from shoppers during the Black Friday and Cyber Monday events in a few weeks. In this blog post, we will take a look at the performance of Amazon's Fall Prime Event and see what lessons we can learn about planning for the rest of the holiday season.
First, let's review what was different about 2022.
Performance was mixed among our clients at Bobsled. Some brands saw great results, while others didn’t.
Still, compared to the same period the week prior, we saw:
October's Prime event was overall less competitive with brands spending less on ads, and cost-per-click (CPCs) being less expensive than in July's Prime Day. Across our book of clients, the CPCs from this event were on average 15% lower compared to July’s.
The counter to that is that conversion rates were not as high in the PEAS event, on average, they were 24% lower compared to the July event.
What this means for brands - and the lesson to take into BF/CM - is that although traffic was less expensive, users did not have the same sense of urgency to convert. An enticing discount offer is a great way to combat this.
My view is that 50% spend is a good starting point. This would ideally be an extra budget, but if you need to reallocate from other days in the month do that. Giftable product brands or brands with repurchase potential should consider 100%+ more spend.
I expect BFCM to be much larger than PEAS. It’s difficult to change the social norms of waiting closer to the holidays to begin shopping. Most shoppers simply leave their holiday shopping to the last minute.
But PEAS was a huge blessing for advertisers, even if conversion rates were lower than on other sales events. Why? We can ensure any retargeting ad lookback windows are large enough to include the October 11/12 event. BFCM is a great opportunity to try to capture that customer when they have a higher intent for purchase.
As much as your margins feasibly allow you. If your product is replenishable, consider using a steep discount to acquire customers with Lifetime value in mind.
Before you roll your eyes at a glib answer from just another ecommerce guy, let me put that in context.
Consider the macroeconomic environment. Just comparing it against what worked for BF/CM in 2021 won't fly. In Q4 of 2021, many brands and retailers were strapped for inventory. There was a good argument then that heavy discounting was unnecessary - shoppers would snap up whatever was available on the shelves.
This year is a much different story. Target even said recently that if they could make a few billion dollars worth of inventory simply disappear, they would. Depending on your brand's category, you could be facing stiff pricing competition and shoppers whose budgets are declining due to inflation or concerns about a future recession.
Brands that don't lean into discounts during sales events can regret it.
I have a client in a very giftable niche. For the PEAS event, they were reluctant to push a competitive discount and opted to activate a 10% off coupon. Although they saw a 75% increase in sales, they missed out on seeing the 150% daily sales increase many other clients with more aggressive coupons saw.
This is your last shot to reel in those holiday shoppers. Don't be the brand that regrets not going bigger.
Here's what we're recommending to most of our clients at Bobsled.
Amazon's Fall Prime Event is a great cheat sheet for how to plan your Black Friday and Cyber Monday strategy. This year, Amazon is facing stiff pricing competition and shoppers whose budgets are declining due to inflation or concerns about a future recession. Brands that don't lean into discounts during sales events can regret it. We recommend increasing bids by at least 20%, identifying a list of priority search terms, and expecting a "window shopping" period the days before.