Entropy ran a webinar last week in partnership with UK advertising trade body ISBA, which looked at the industry hot topic of retail media and its associated challenges around successful measurement and optimisation.
As they’ve the largest spend within retail media globally we focussed on Amazon. We took attendees through how you can gain full visibility on what drives your Amazon sales and determine the TRUE impact of Amazon Ads on your business.
For anyone that missed the webinar but would like to find out more we’ve summarised the key points in this blog.
Retail media is growing rapidly and Amazon has the largest share of spend.
An interesting stat is that according to WARC Amazon Ads is now a bigger revenue business than YouTube.
And it’s worth stating that Amazon Ads is more than just the well-established methods of Sponsored Products or Sponsored Brands. Amazon Ads now enables full funnel activation with its display, video and streaming offerings all adding to its extensive eco network.
Measuring the true incremental impact of retail media can be challenging
Our position on measurement is that you need a combination of approaches these days. There is no one “silver bullet”. That is usually a combination of in-platform measurement, a structured testing programme and, for a more holistic view, Marketing Mix Modelling (also know as MMM or econometrics) is also having a resurgence.
As an in-platform measurement solution the Amazon Ads platform is of course important. However, its attribution uses a last touch and 14 day lookback window as its standard which has some significant limitations.
For example, it ignores the impact Amazon ads can have “off-Amazon”. In a recent study, WARC identified a +45% halo impact on non-Amazon sales for Amazon display ads, as well as a +23% halo impact for Amazon sponsored ads.
Also as a digital tracking methodology it also won’t take into account the many non-digital drivers of your Amazon sales. For example, pricing, promotions, brand equity, seasonality and non-digital media.
MMM / econometrics can help to optimise your spend across Amazon and all channels
If you want to understand the incremental impact of your Amazon ads Marketing Mix Modelling is a good solution. MMM helps to create a view over time across all the drivers of your business.
However, we found that amongst attendees to our recent webinar that were advertising on Amazon, only 17% used MMM to measure its effectiveness.
Amazon MMM in action: case study
We concluded the webinar with a client case study – showing how through MMM we’d calculated the true incremental ROAS and profit ROI of the Amazon ads products such as sponsored products and brands.
We’d be happy to take any client-side marketers through this case study in more detail so please feel free to contact us if you’d be interested in finding out more
How Entropy can help
Entropy offers a range of measurement, marketing and strategic consulting services. For more information, please contact us or read about our work.
You might also be interested in this recent Entropy blog looked at the growing retail media space in more detail.
