Get Set for the ‘Q4 of the Century’ with a Powerful Amazon PPC Strategy

Editor’s Note: This is a guest post written by Zoe MacDonald, Marketing Manager at Sellics.

In what was possibly the most unexpected Q2 in living memory, eCommerce sellers discovered that where there are challenges there are also opportunities. Of course, while it would be nice to think that most of this year’s challenges are already behind us, for Amazon sellers, the reality is that the biggest opportunity is actually yet to come.

How so? Well, Amazon merchants are clearly heading into what we like to call the Q4 of the century.

As you can see in the above chart, for the first time in Amazon’s history, all of the eRetail giant’s most important deal days, Prime Day, Black Friday, and Cyber Monday, are scheduled to take place in Q4.

What Makes Q4 2020 the “Q4 of the Century”?

To understand how this year’s final quarter is expected to be so different, let’s look at what a typical sales year looks like.  

Daily Ad Revenue Trend: Growth rates are compared to average daily sales three months prior to each deal day. Trends displayed are based on anonymized Sponsored Products performance data from US advertiser profiles managed with Sellics. The trends and figures included do not represent an official performance statement of Amazon Advertising.

Looking at the ad revenue trend in 2019 (see chart above), we can easily identify the most important selling periods – i.e. Deal Days. 

In fact, each consecutive Deal Day in 2019 broke Amazon’s previous selling record with Cyber Monday 2019 remaining the biggest shopping day in Amazon’s history so far. In addition to those sky-high individual shopping days, you’ll also notice a tremendous revenue boost in December after Cyber Monday ends. Additionally, ad revenue from the 4th-20th December is likely to be 90% higher (and up to 113% higher during select days mid-month) compared to an average month’s revenue during the same period. 

Keeping these trends in mind, let’s proceed with how you can use this knowledge when planning your Q4 PPC strategy.

What’s Different in 2020? 

Daily Ad Revenue Trends: 2019 vs 2020

As seen in the above chart that shows ad revenue trends in 2020 compared to 2019, we can already identify two major differences: 

1.  The sales and ad revenue boost from (what should have been) 2020’s Prime Day is missing. 
2. There was a significant increase in ad revenue around March time.

The first difference is due to Amazon pushing back this year’s Prime Day to October 13th-14th. 

The second difference can be explained by what we call “the coronavirus effect”. This refers to the large number of online shoppers who began buying more products online due to the lockdowns taking place around the world that caused many to avoid venturing outside and instead opt for ordering online. Moreover, this has been accompanied by higher ad conversion rates and lower CPCs, resulting in a higher ROAS (Return on Advertising Spending). 

Having highlighted the differences between 2019 and 2020, we feel confident in making the following predictions as to how Q4 2020 is pipped to be the quarter of the Century:

Q4 2020: The Q4 of the Century

As mentioned earlier, all three of Amazon’s most important deal days, Prime Day, Black Friday, and Cyber Monday, will take place in the fourth quarter. As a result of this, we can expect very strong deal day performances with shorter periods of “shopper fatigue” in between each deal day. Moreover, there is very likely to be:

• Greater volume of sales
• Better CPCs and Conversion Rates
• Better ad efficiency, i.e. lower Advertising Cost of Sale (ACoS) and higher Return on Advertising Spend (ROAS)

The bottom line is, there’s a huge opportunity for brands selling on Amazon. 

Is your brand ready to make the most of the opportunity of the century?

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A 2-Step PPC Strategy for the Q4 of the Century

So how can brands selling on Amazon get the most out of this extraordinary opportunity?

1. Maximize Your Reach Across all Ad Types

An overview of the sponsored ad real estate on the search results page and product details page highlights the huge opportunity that brand owners have to serve their product to the right audience.

Amazon.com search results page

Amazon.com product details page

If you’re only using one kind of ad, you’re not only missing out on sales but are also giving up space to your competitor. Overall, be sure to have a strong presence to make the most of the available real estate. 

2. Amazon PPC Strategy: Optimize Your Bids

Continuously optimizing your bids is absolutely essential if you want to maximize your success in Q4. On deal days, revenue growth is likely to surpass even significant increases in ad spend. In other words, RoAS is high, despite an increase in CPC. 

Other predictable shopping phases (as seen in the chart below) are:

• Shoppers Fatigue: shoppers fatigue usually sets in after Prime Day. This is the period following Prime Day in which RoAS will be slightly worse than average.
• Holiday Preparation: seasonal holiday shopping which begins to ramp up in November.
• Christmas: expect high volume Christmas shopping in December.
• New Year’s Day: expect to see a sharp drop off towards the new year.
  

To prepare for these days and phases, here’s how you could optimize your bids:

• On Prime Day, increase bids by at least 25%, especially for your products with deals and for your higher ticket items as we’re likely to see an especially high Average Selling Price (ASP).

• Following Prime Day, between one week and ten days after, decrease your bids to avoid wasting ad spend during the “shoppers fatigue” period. 

• As December approaches, you’ll want to gradually increase your bids to cash in on an increasing CvR as CPCs in the market rise.

• On Black Friday, we recommend you increase your bids by 30% and on Cyber Monday by 25%, especially for your products with deals. RoAS is high and likely to hit an annual high on Cyber Monday.

• As Black Friday and Cyber Monday mark the beginning of the serious shopping season – we’ll see a gradual increase in CvR and revenue through mid-December. If there is any post-deal-day shoppers fatigue here, it isn’t likely to last more than a day. So, consider increasing your bids and/or keeping them high until as late as the 20th of December. After this date you should start decreasing your bids gradually until Christmas. 

• Decrease your bids significantly between Christmas and the New Year, when both conversion rate and RoAS are likely to hit an annual low. 

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Conclusion 

While today’s pandemic has pulled the rug out from everyone’s feet, where there is crisis there is also opportunity. Indeed, it is opportunity that binds the post COVID-19 conditions to what we think will be the Q4 of the Century. Successful players in both circumstances will be distinguished by their ability to increase investment, reach where it counts and adapt quickly to changing circumstances. From an Amazon PPC strategy standpoint, that means: 

1. Maximizing and diversifying your reach across all ad types (Read here to find out more about robust and flexible campaign structures and continuously optimizing targets.)
2. Optimizing your bids dynamically based on expected trends

When it comes to Q4 2020 and the expected flurry of deal days that it will bring, optimization must be done daily. 

Can all of this be done manually? Absolutely, as is cutting your own hair. But would you want to do so before your own wedding, when it matters most?

Whether or not doing it manually will yield optimal results will depend on how much time you can afford to invest and the level of expertise you already have. With Sellics, you don’t need either. With a combination of rules-based and AI automation, we take care of optimizing all important aspects of your campaigns, from targeting to bidding and negative keywords. 

EXCLUSIVE: Payoneer customers signing up for Sellics Seller Edition within Q4 can avail a special discount of 90% off their first month, in addition to a free two-week trial. Simply sign up using this link and enter the code PAYONEER90 while subscribing at the end of your trial.

Zoë MacDonald is a Marketing Manager at Sellics, the all-in-one software for success on Amazon. Sellics PPC Manager helps sellers automate billions of dollars in ad revenue yearly through AI as well as rule-based automation. In addition to advertising, Sellics also offers solutions for Amazon SEO & profit monitoring.