2023 So Far & What We’re Looking Forward To
The new year opens doors to new beginnings, and this is especially true in the world of Amazon. The beauty (as well as the madness) of e-commerce is that it is always in flux, so start the year off right by understanding what the landscape currently looks like, forecasting what might shift, and developing strategies to make it work for your brand. 64% of people who set New Year resolutions give up on them after the first month – be the 36% that stays vigilant going after and hitting your brand’s goals (source). Let’s dive in!
What we’ve seen so far.
STRONG JANUARY PERFORMANCE
Economic uncertainties caused by inflation, supply chain challenges, inventory shortages, and fluctuating consumer patterns, left brands wary of what awaited them as we entered 2023. However, GO’s Founder & President, Carl Goedjen, articulates that, despite these concerns, overall Amazon traffic and sales are still increasing in 2023:
“January reflected a great start to the year with consumer traffic continuing to be up vs a year ago and [overall] consumption for brands was also up double digits. GO continues to see opportunities to grow share and gain incremental volume in the Amazon platforms.”
While we did notice that some brands experienced YOY declines in traffic at the category level in January, our clients that implemented a full-funnel advertising strategy experienced success across the board.
“New Year, New You drove normal increases this January in customer traffic to wellness products,” explains Josh Taylor, GO’s General Manager of GO Europa. “For brands who play in categories that experienced an overall decline in traffic, leveraging a Sponsored Display and DSP retail media strategy has been critical in increasing new customer engagement, conversion, and repeat purchase.”
Beth Wall, GO’s VP of Customer Marketing & Sales, echoes the same sentiment that brands who utilized multiple ad tools set themselves up for success in January:
“Our brands felt a lot of pressure due to economic factors as they walked into January, but their performances not only met but exceeded expectations. We have been able to drive high engagement and conversion across our brands and across multiple categories (HPC, Baby, Pet, Hardlines & Softlines) by leveraging Amazon advertising tools. Brands who did not just rely on Amazon PPC traffic but also leveraged DSP and STV are seeing the most impactful growth.”
LOWER ADVERTISING COSTS
Brands who have remained dedicated to a full-funnel media approach have performed well so far and they’ve been able to invest at a much lower cost in comparison to last year.
Trung Phan, Director of Display Advertising at GO, describes the importance of taking advantage of this price decrease, stating…
“In January, we saw the cost of programmatic media come down, so any brand leaning in is getting more value for their investment. Total CPMs for both display and video are roughly down 11% in January 2023 compared to a year ago.”
He also emphasizes that the current retail environment and advertising costs make this the perfect time to focus on acquiring new customers because…
“…consumers are still shopping and especially looking for deals. Specifically for prospecting tactics, brands that are able to run deals and continue investing in advertising can take advantage of new customer acquisition costs being down 40% in January 2023 compared to a year ago.”
What we’re looking forward to.
ADVERTISING + PERFORMANCE MEASUREMENT TOOLS
Our team has always espoused the benefits of a full-funnel advertising strategy and strongly asserted our belief that Amazon media efforts have an impact on both Amazon and brick & mortar performance. GO is thrilled to see how Amazon Marketing Cloud & Omnichannel Metrics beta are continuing to evolve, informing our strategies and supporting our assertions about cross-channel performance.
One of the strongest capabilities that AMC and OCM share is providing insights that allow brands to optimize their advertising approach to achieve whatever goals they may have at the appropriate cost. Goedjen explains this best, stating:
“The ability to use the right levers at the right spend is proving to drive incremental volume at a better efficiency rate. We will continue to see AMC and OCM drive better visibility to performance and efficiency.”
Cody Tusberg, GO’s VP of Partner Marketing, shares the excitement about these tools positively impacting brands’ approach to the funnel:
“2023 is setting up to be the year brands think beyond the in-market consumer at scale. Measurement tools such as Amazon Marketing Cloud and ad products like Streaming TV are enabling brands to reach consumers and measure results at multiple touchpoints in the shopping journey. Amazon Advertising now provides the tools to understand how lower funnel outcomes truly and precisely are being influenced by upper funnel investments.”
NEW TOOLS ON THE HORIZON
Amazon has always had a never-ending flow of ideas, innovations, and new products. We are confident that 2023 will be no different.
For example, GO Europa’s Josh Taylor cannot wait to gain access to Amazon’s Streaming TV ad inventory within the DSP auction, a first in Europe.
“The ability to run 15 to 30-second pre-roll ads within the Fire TV and Freevee environments will drive differentiation for brands while engaging a high-value Amazon Prime customer. We are intrigued to see how the upper funnel video advertising impacts brands’ unique reach and branded search frequency [as well as] how Amazon Ads’ STV solution can fuel ongoing, always-on DSP efforts.”
Our GO team is also eager to continue testing and exploring the various tools that Amazon Advertising announced at unBoxed 2022. Doree Wendling, GO’s Director of Marketing & Media Analytics, is particularly excited to keep trialing Sponsored Display Video to see how it impacts our clients’ businesses.
“The opportunity to display a video across different phases of the shopping journey is something we are diligently testing to understand which targeting types are best for different marketing objectives.” She also sees this as an A/B testing moment, and our team will continuously work to “understand how sponsored display banner ad performance differs from sponsored display video performance.”
We’re not just thrilled about the advertising tools – there are new tech updates we are looking forward to as well. Chris Goggin, GO’s VP of Engineering and IT, has shared his excitement for certain tech advancements within e-commerce, including further reliance on first-party data, local and Best Deals evolving advertising approaches, and clean rooms moving from experiments to client offerings.
Goggin believes these tools will allow brands to…
“differentiate themselves in the market through clearer results, provide them with more timely insights, ensure consumers are getting the best deal, and make quick turn comparisons and actions.”
Goggin also finds generative, open-source AI “very intriguing” and believes…
“…it could potentially have widespread impacts not only within the technologies we use, but also when creating content, providing customer service responses, or moving the landscape of interactive advertising forward through connected devices.”
GROWING YOUR BUSINESS WITH BETTER EFFICIENCY
The tale for brands on Amazon in 2023 continues to be what it has always been: keep looking for more tools, strategies, and ideas that can help you reach your goals at a lower cost. The uncertainty of the economy is resulting in companies slashing their budgets, so it’ll be important to determine the right mix of implementations at the right dollar amount that will be the most beneficial for your brand.
“For ’23, the key focus for brands remains how to grow sales and share of category while accomplishing it in an efficient and profitable manner,” Goedjen says.
While this may sound tricky, Amazon is always releasing new programs to help brands achieve this goal. As Goedjen articulates,
“There are opportunities with many ad tech tools as well as products to reach consumers as they interact with media in their lives.”
Wall is also optimistic that Amazon’s tools will help brands grow their businesses in 2023:
“The sophistication and ability for Amazon Advertising to reach consumers continues to excite me – coupled with the ability to measure and optimize performance to drive even better results gives me a lot of confidence that we will continue to grow our brands and gain market share both on and off Amazon.”
IT'S GO TIME
With so many things to look forward to in 2023, it can be difficult for brands to have the bandwidth to capitalize on it all. Let our team help. We’re not only capable of implementing these new tools and processes, but we’re also excited to see how they will help grow your brand in a substantial way. Schedule a call with us today.