Case Study: Driving Organic Growth on Amazon with Sponsored Ads
By Peter Gokhshteyn on April 20th, 2020
Many wonder how the best-selling products on Amazon got to the top. They hope to capture some of that glory for themselves. Conceptually, this process seems simple. As more shoppers buy your product, Amazon rewards you with priority placements on the search engine results page (SERP), resulting in more exposure and growing sales. Setting this flywheel of sales in motion though can be arduous.
In the last few weeks, we've released a series of features that are designed to unlock the ultimate superpower - kickstarting the Amazon flywheel and driving organic growth with Sponsored Ads.
Now we're going to show you - step by step - how one of our agency customers, Cartograph, used Perpetua's newest features to help one of their clients climb best seller rank, rise to the top of organic search and ultimately drive organic revenue (sales not attributed to advertising).
In a single 30-day experiment, Cartograph elevated their client's position from beyond page 1 to winning above the fold and producing tremendous results:
104% increase in daily organic sales (sales not attributed to advertising)
40% higher organic rank
Climbed Top of Search Share of Voice from 0% to 25%
BSR movement from 12,150 to 5,012 in a major category
Step 1: Identify high growth areas of opportunity
Cartograph identified this opportunity and ran a 30-day growth experiment with their client, Hydrant. The company's products are strategically positioned as "rapid hydration mixes", and their goal is to dominate the hydration market.
Cartograph identified significant opportunity for Hydrant in a high-volume, category keyword that Hydrant was not currently ranking for: Electrolyte Powder. They knew if Hydrant dominated that keyword's sponsored placements, it would drive significant additional sales volume and impressions. To do so, they bid aggressively on the keyword Electrolyte Powder thereby signalling to Amazon Hydrant's relevancy on this high volume search term.
Step 2: Measure your baseline, map your success metrics
Once the opportunity was identified for Hydrant, Cartograph was able to map the following combination of metrics in Perpetua that, when used together, presented the full picture of the impact that advertising spend was having on total revenue and organic growth.
Organic Rank*: Position of your product listing organically on Amazon's SERP.
Sponsored Rank: Position of your Sponsored Ads in Amazon's paid SERP.
Organic Sales: Sales from your organic listings
Share of Voice: % of Amazon SERP (market) you own vs. your competitors
Top of Search Share of Voice: Share of Voice on Premium placements on the SERP.
Blended ACOS: Ratio of Amazon Advertising spend to total (sponsored + organic) sales
BSR: Best Seller Rank in key Amazon categories
To set their baseline, Cartograph marked that Hydrant had a 0% Top of Search Share of Voice, was not ranking on page 1 on Amazon (Organic Rank +50) and organic sales had flatlined.
Cartographs Objectives for this experiment:
🌿 Rank Organically, climb thereafter (closer to position #1) 📈 Increase Share of Voice and Top of Search Share of Voice 🎖 Climb best seller rank 💸 Increase organic sales (new-to-brand purchases)
If you're not using Perpetua, you'll likely have to pull these insights using a variety of tools and platforms to get the full picture of the impact advertising is having on the growth of your business.
For our customers, these insights are all available to you in one place as part of our new suite of intelligence reporting insights.
Step 3: Run a time-bound, carefully monitored experiment
Experimentation is key to identifying and exploiting new growth vectors for your business. Perpetua is designed so that customers can easily run these types of experiments while closely monitoring their results in one place.
Using our Keyword Boost feature, Cartograph was able to isolate the strategic keyword Electrolyte Powder into its own campaign, set a dedicated target ACOS and budget, and dominate top of search using a higher placement multiplier.
The 30-day experiment that Cartograph launched for Hydrant consisted of:
Increasing daily budget from $5/ day to $500/ day on the keyword Electrolyte Powder
Adding a 200% Top of Search multiplier
Increasing target ACOS from 30% to 200%
Step 4: Measuring success and continuous iteration
Within in a few days, Top of Search Share of Voice jumped to 25%, meaning that 1/4 of all Top of Search sponsored placements for the Electrolyte Powder search term were won by Hydrant. Total sales had almost doubled and Cartograph was able to identify more efficiencies as blended ACOS stabilized.
Improved Organic Rank and Best Seller Rank:
In a single month, Hydrant saw:
40% improvement in organic rank
104% increase in daily organic sales (sales not attributed directly to advertising)
Climbed Top of Search Share of Voice from 0% to 25%
BSR movement from 12,150 to 5,012 in the Health & Beauty category
Most importantly, the Cartograph team could quickly see a positive and direct correlation between spend on Sponsored Ads momentum and organic sales:
Organic Rank and Share of Voice are two critical metrics for advertisers to measure and control how their products appear on Amazon's SERP.
Each situation will be different and advertisers need to think strategically about which levers are most impactful for driving growth in their business. If you have any questions or want to learn more about Organic Keyword Rank or Share of Voice, send an email to firstname.lastname@example.org.
*Organic rank and share of voice metrics are not offered by Amazon, and are provided by a 3rd party data source
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