Boosting a Client’s Amazon Shipped COGS While Simultaneously Lowering TACOS
What We’re Celebrating:
Due to our advertising, retail, and content implementations, we achieved an average +3.4% month-over-month (MoM) growth rate for our client’s shipped cost of goods sold (COGS) while also reducing their total advertising cost of sale (TACOS) by 9 percentage points. We accomplished this in just 10 months of managing the business.
Overview:
GO took on a new health & personal care client in January 2023 that faced a wide range of challenges that prevented them from growing their business efficiently. These challenges included Lost Buy Box (LBB), decreasing brand awareness, ineffective spend allocation, low share of voice (SOV) in their category, missed tentpole opportunities, and outdated content.
To improve our client’s monthly shipped COGS and TACOS performance, we launched a full-funnel ad strategy across Search and DSP, leaned heavily into tentpole events, and made image carousel and A+ content updates.
The Challenge:
Apart from their top 2 ASINs, the majority of our client’s portfolio had LBB issues, creating a less-than-optimal shopping experience and causing difficulty in getting products to consumers.
Brand awareness was on a downward trend in Q4 2022, making it tough for our client to generate impactful sales growth.
The advertising budget was spread across too many products, was allocated to ASINs with a high cost per purchase, and did not ladder up to their total percentage of sales. This made it challenging to see significant wins or returns from their campaigns for any specific product segment.
Defensive spend allocation was as high as 39% in November 2022, showcasing an opportunity to speak to customers shopping in the category or on competitor product detail pages (PDPs) to fuel new-to-brand (NTB) growth.
SOV was low on top category keywords, meaning there was room to improve in connecting with consumers who were shopping our client’s product segments.
Our client had never taken part in Prime Day before, causing them to miss out on the influx of traffic and sales ignited by the event.
PDP content was outdated and not on par with their competitive set, resulting in suboptimal conversion rates.
The Strategy:
Advertising: In January 2023, we launched a full-funnel strategy to drive NTB and loyalty, delegating 85% of our client’s budget to their top ASIN given its historical relevancy on Amazon and lack of LBB issues.
Search
We maximized brand coverage in less expensive ways by featuring lower-selling items in ad units that were new to the brand. This included utilizing Sponsored Brand to own top-of-search and Sponsored Display and Sponsored Product to cross-sell on their PDPs. This tactic allowed us to direct most of our budget (79%) toward driving new consumers without sacrificing brand protection.
We featured our client’s top item through category and competitor targeting. We leveraged Sponsored Product and Sponsored Brand Video ads to increase organic relevancy on high-traffic category terms and to dominate competitor search and competitor PDP placements.
DSP
We launched prospecting, retargeting, and loyalty campaigns that featured our client’s top ASIN to drive NTB, conversion, and Subscribe & Save (SnS) subscriptions.
Prospecting
Connected with consumers who viewed products within our client’s category over the past 14 days but have not purchased within the category over the last 30 days.
Excluded customers who viewed our client’s brand in the last 90 days, who bought from our brand over the past 365 days, and SnS purchasers.
Retargeting
Connected with consumers who viewed our client’s top product in the last 14 days.
Excluded customers who purchased from our client in the last 365 days and SnS purchasers.
Loyalty
Retargeted past purchasers.
Excluded SnS purchasers.
Retail: We leaned heavily into tentpole events, running Vendor Powered Coupons across our client's top-selling ASINs during New Year, New You, Prime Day, and Prime Big Deal Days. The purpose of this strategy was to increase NTB reach and maximize total dollar volume.
Content: In September 2023, we updated our client’s image carousels and A+ content across their top product line to better communicate product efficacy and differentiation versus other brands in the category. The goal of this change was to boost consumer confidence in the brand and increase conversion.
The Results:
Our efforts across advertising, retail, and content helped our client increase their MoM shipped COGS by +3.4% on average while simultaneously reducing their TACOS by 9 percentage points in just 10 months.
Want to deliver more efficient business growth for your brand?
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