Amazon Update & Q4 Earnings

February 5, 2019

We've been intently tracking the progress of recent developments in Amazon Advertising Sponsored Products campaign instrumentation and—at a slightly different altitude—the big takeaways from Amazon's Q4 Earnings Report of last Thursday. (We consider ourselves fortunate to have some of the most exciting neighbors in the world.)

What we learned from the Q4 earnings call.

Growth from online sales decelerated from 17% to 14% year-over-year (but we're not ringing any e-commerce alarm bells just yet).

Prime sign-ups slowed down, even though more customers signed up for Prime in 2018 than any prior year.

Amazon is focused on maxing revenue per customer by incentivizing more and bigger purchases and adding services that give Amazon an ever-larger role to play in customers' daily routines.

Amazon doubled the number of products that are eligible for 2-day shipping and extended the reach of the Prime portfolio from your closet to your garage.

Amazon Advertising’s growth rate dipped into double-digits—but 97% growth isn’t exactly a lull. The ad business pulled in more than $10B in revenue in 2018.

Amazon’s revenue from physical stores took a slight dip (but that revenue doesn’t include items purchased online and picked up in-store).

Read the full Earnings Report transcript here.

The quick take on new bidding functionality for Sponsored Product campaigns.

Amazon launched new automated bid optimization tools for Sponsored Product campaigns.

Dynamic bidding is now available for Sponsored Products. You can give Amazon the power to automatically adjust your bid based on the likelihood of conversion. (Brands can select a “down-only” option if they only want to adjust their bid down when conversion likelihood is low.)

Fixed bids hold the brand's bid steady in every eligible auction, with no dynamic adjustments based on conversion likelihood.

Placement bid adjustments give advertisers the ability to control the location where their ad will be served. Placement-level reporting is also available for each campaign and shows how ads perform in each location.

To access this new capability, log into your account. Select "create campaign," then "sponsored products," then "bidding strategy." Find out more here.

Get a handle on your CPA with new ‘new-to-brand’ metrics.

"New-to-brand" campaign performance metrics show brands how many of their customers are new versus existing. Amazon will be reporting metrics like "total new-to-brand purchases and sales," "new-to-brand purchase rate," and "cost per new-to-brand customer." Brands can use this insight to estimate the cost of acquiring new customers.

Find out more here.

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