How Paid Search Is Helping Brands Get Ahead on Amazon

American shoppers spent an estimated $257.3 billion buying stuff online during the second quarter of 2022, according to the U.S. Census Bureau. That's a 2.7% increase compared to the prior quarter, and an amount not likely to get smaller anytime soon. To grab a bigger piece of the growing ecommerce pie, brands both big and small are turning to Amazon. Yet merely listing goods for sale on the platform doesn't guarantee success. New data from marketing intelligence firm WARC reveals companies that boosted their investment in paid search during the third quarter of 2022—a period that included Prime Day—tended to outperform competitors who maintained their level of spend or even gave it a slight lift. "Paid search is such a lethal tool because it drives organic search," said Amin Mrini, WARC’s chief of business operations. Procter & Gamble Pulls Back on Marketing Spend Simply put: Advertising brings in more traffic, which results in more sales and reviews. Amazon's search algorithm then assigns more value to these products, which results in directing more organic traffic their way. And so on. Thriving on Amazon, however, involves more than just increasing media budgets to jumpstart the process. "If your content isn't right, if your price isn't right, you can spend all you want but it won't make a difference," Mrini explained about converting visitors into customers. Additional findings show many companies can improve their standing on Amazon with minor tweaks and a bit of effort. Of all the brands WARC reviewed, for example, less than half had an in-stock rate over 95%. A similar number had product pages that didn't link back to their brand store. Only around one-third displayed so-called stellar content, such as rich media. "There is a ton of room to increase your competitive advantage just by getting the basics right," said Mrini. Last quarter's winners The WARC Digital Commerce Index, or dComm Index for short, scores brand performance on a scale of 0-100 in key categories across five metrics: price, content, selection, paid search and organic search. Within each metric, the top performer sets the benchmark against which its competitors are indexed. Scores for all five metrics are tallied and ranked to identify the category’s strongest brand. From July through September, Victoria's Secret's index score jumped eight points compared to the prior three-month period. This increase was driven by a boost in paid search. Philips Sonicare earned the beauty and personal care category's top spot, with an index score of 70. In toys and games, LeapFrog hopped into third place behind Lego and Barbie. Once again, gains came from paid search, along with improved selection and price, a metric that evaluates discounting and average cost. LeapFrog also finished strong in content, which, according to WARC, is an ideal metric for smaller brands to target because it's relatively inexpensive to control. Although Amazon's private-label brand Amazon Basics finished in first place in the household supplies category, Nutrichef climbed into the top 10 largely due to an 18-point improvement in paid search. Skytech Gaming received major gains from investments in paid search and enhanced organic search. Meanwhile, Apple's index score fell 10 points thanks to a significant decrease in paid search. During the second quarter of 2022, Amazon reported $121.2 billion in revenue, up 7% compared to the same three-month period in 2021. The ecommerce giant plans to release third-quarter results on Oct. 27. It expects net sales of up to $130 billion, a 17% jump versus last year. As the line between marketing and digital commerce continues to blur, WARC’s dComm Index helps brands benchmark their performance against competitors. To learn more, including information on the categories and metrics covered, click here.

Amazon News

How Paid Search Is Helping Brands Get Ahead on Amazon

New data from WARC's dComm Index reveals which strategies are making a difference on the ecommerce platform

UNLOCK FULL ACCESS

Paul Hiebert

Commerce

Amazon Says External AI Agents Aren't Hurting Its Ad Business

Walmart+ Launches in Mexico at Half the U.S. Price

DoorDash Agrees to Buy Instacart For About $17 Billion

Best Buy's Signature Yellow Tag Is the Star of New Holiday Campaign

Consumers Aren’t Ready to Let AI Do Their Holiday Shopping Yet

DoorDash Buying Instacart Challenges Uber's $2 Billion Ad Business

Half of Shoppers Plan to Buy Gifts Like Meals or Event Tickets, Deloitte Finds

Google Sells Itself As A Commerce 'Matchmaker,' Not A Retailer

How Grocery Chain 99 Ranch Market Is Expanding Amid a Growth in Asian Cuisine