In search of bigger brand budgets, Amazon is beefing up its brand metrics

Being able to see how effective Amazon is at attracting new customers may help the e-commerce giant to broaden brands’ perceptions of its ad platform, especially at a time when traditional brand advertisers like Procter & Gamble are looking to search and social advertising as brand-building tools. Early on, advertisers gravitated to Amazon because they were able to track how many sales their ads generated within a 14-day attribution window, but now advertisers are interested in looking beyond that short-term return on ad spend (ROAS) to see to what extent Amazon is able to incrementally grow their e-commerce businesses, said iProspect national director of paid platform merchandising David Hutchinson.

“If Amazon is effectively a search engine for retail, we want to be looking at higher-funnel metrics, and this is a great beginning of an answer by Amazon to say that ‘we appreciate that sales exist beyond 14 days, that we’re not just a point-of-sale place but we’re actually teaching people about brands and making them aware,’” Hutchinson said.

If Amazon is able to prove itself as a brand awareness driver, that could not only help its standing among traditional brand advertisers but also direct-to-consumer brands, who have been averse to selling their products on Amazon but are also looking to brand advertising channels like TV to grow their customer bases.

Through Amazon’s new-to-brand metrics, pet supplies brand BarkBox was able to see that 86 percent of its Amazon sales (it declined to share total sales) since Nov. 1 were from customers who had not purchased its products on Amazon within the past year, according to Daniel Tejada, an Amazon advertising consultant whose clients include BarkBox and Amazon-focused agency Quiverr. “We question this figure. It’s too early to base any conclusions on data that is so new,” said a BarkBox spokesperson in response to the number shared by Tejada. Tejada cautioned that BarkBox’s new-to-brand stats could be skewed by the fact that the brand only began selling its products on Amazon within the past year. “They’re a big DTC [brand] typically, but they’re newly launching on Amazon, so growth is a major factor for them. A metric like percentage of new customers to the brand is very important,” he said.

After seeing the new-to-brand purchase stat, Tejada emailed his counterpart at BarkBox on Jan. 21 to advise the brand to spend more on Amazon’s Sponsored Brands ads, which Amazon has positioned as a product for promoting brand awareness in presentations with advertisers and agencies, he said.

The new metrics also address longstanding complaints from advertisers about what kind of data Amazon gives back to them — “new-to-brand” can be a useful metric for many brands.

“I think it’s incredibly significant,” Eric Heller, CEO of Wunderman Commerce’s Marketplace Ignition, said of the new-to-brand measurements. Previously, if an advertiser wanted to see how effective Amazon was for winning new customers, it would have to find a workaround, such as by referring to the shipping addresses for its Amazon sales and inferring that a customer was new if an address was not already in the brand’s database, he said.

However, as Hutchinson’s “great beginning of an answer” assertion implies, there are limitations to Amazon’s new-to-brand measurements that, while a step in the right direction, make it “only a baby step,” he said.

In addition to the obvious limitation that Amazon is only tracking purchases made through its own e-commerce platform, the metrics are only available for Amazon’s Sponsored Brands ads that appear at the top and bottom of search results on Amazon as well as the display and video ads bought programmatically through Amazon DSP to run across Amazon’s own and others’ sites. The metrics are not available for the Sponsored Products ads that appear within Amazon search results to promote a specific product from a brand and which are considered by Amazon ad specialists to be Amazon’s most popular ad product.

Brands are less inclined to buy Amazon’s Sponsored Brands ads because they are typically more expensive than its Sponsored Products ads. For an advertiser looking to reach people searching for “protein bars” on Amazon, a Sponsored Product ad might cost $4 or $5 per click, whereas a sponsored brands ad could cost $11, said Tejada. But being able to appraise a Sponsored Brands campaign’s cost against the number of new customers it generated could help to convince advertisers to invest in that format strictly as a customer acquisition tool. Given that Amazon now breaks out the effective cost-per-purchase specifically for purchases from people that have not bought from a brand on Amazon within the past year, an advertiser could monitor that metric and adjust its level of investment in a Sponsored Brands campaign accordingly.

Another limitation of the new-to-brand measurements, Amazon is only tracking this information for purchases made within the past 12 months. That is fine for brands with lower-priced items that have a short reordering cycle. But it could be misleading for brands in certain verticals, like home goods and consumer electronics, that sell high-priced items or products that don’t need to be replaced all that often.

Additionally, Amazon is not rolling out any new tools for advertisers to use the new-to-brand measurements to retarget those new customers or aim ads at lookalike audiences of people who share similar characteristics to those new customers and may be more likely than the average person to become a customer.

That’s not to say that brands cannot take advantage of the new-to-brand measurements to inform their advertising. Brands could use the new-to-brand metrics to help themselves make a run at their rivals’ customers on Amazon, said Trevor George, CEO of Blue Wheel Media, an agency that specializes in Amazon advertising. For example, a diaper brand could run ads that are targeted based on keywords related to another diaper brand in order to show up atop Amazon search results for that brand’s products. Then the diaper brand could refer to the new-to-brand measurements to see if the campaign is winning over new customers. And if Amazon proves it can win over new customers, that would likely lead to Amazon winning a larger share of advertisers’ budgets. “It will help the e-commerce teams at brands understand and make more convincing cases for what’s going on in terms of Amazon’s influence,” said Heller.

This article has been updated to reflect that Daniel Tejada is an independent consultant whose clients include BarkBox and Quiverr and that BarkBox is a client of Tejada’s, not Quiverr.

This article has also been updated with a statement from BarkBox in response to the new-to-brand purchase statistic shared by Tejada.