ClickZ Amazon Insights Newsletter - 11.07.2024

PLUS: Temu, Shein, and Amazon Battle for Essentials

Author

Sophie Bruxner-Randall
November 07, 2024 • Estimated Reading Time: 6 minutes

Editor’s Pick 🎯

YouTube surpasses forecasts in Alphabet's Q3 earnings call

Google parent Alphabet's Q3 earnings call revealed YouTube's impressive performance, bringing in nearly $9b in ad revenue—a 12.2% increase year-over-year. This substantial growth, typically undisclosed by Alphabet, signals the platform's rising dominance in digital advertising.

👉 Fospha highlighted this upward trend in their their latest report, identifying YouTube as the second-fastest-growing ad channel for eCom brands by ad spend.

While YouTube currently reports the highest CPA among Google channels as brands adapt and optimize their campaigns, its increasing popularity reflects a broader shift toward brand-building channels for long-term growth. The platform's potential for driving brand growth makes it one to watch in coming quarters.

Niche Nuggets 🔎

Walmart and Amazon are enhancing their Black Friday and Cyber Monday strategies to attract holiday shoppers. Walmart offers phased events and early access for members, while Amazon introduces AI tools like Rufus for personalized shopping. Both aim to provide convenience and value, leveraging technology for a superior shopping experience.

Amazon's new app features enhance holiday shopping by offering personalized recommendations, AI Shopping Guides, and social media integrations. These tools help you discover gifts, share finds, and shop seamlessly on or off Amazon, making the experience more collaborative and enjoyable while ensuring confidence in your purchases.

This holiday season, Amazon has emerged as the top choice for gift inspiration, surpassing Google. While 74% of U.S. consumers plan to use Amazon, only 44% will turn to Google. This shift highlights the evolving landscape of online shopping, where consumers are increasingly seeking confidence in their purchasing decisions.

Generative AI chatbots like Google Gemini and ChatGPT are making a slight impact, with only 8% of consumers consulting them for gift advice. Meanwhile, 30% look to Facebook for ideas, and 25% prefer direct visits to favorite brand stores. Sustainability is a growing concern, with 12% considering it in their shopping choices. Additionally, 88% aim to save money, with 37% comparing prices online before purchasing.

Amazon has launched an immersive online shopping experience, featuring over 100 gifts and premium items from top brands like Beats x Kim Kardashian and Kate Spade. This innovative platform uses 3D technology and interactive elements, such as a conveyor belt of gifts, to enhance your shopping journey.

The virtual shop is powered by generative AI, with Rufus, Amazon's AI shopping assistant, offering personalized gift suggestions. This technology simplifies your search by consolidating product information, making it easier to find the perfect gift. Amazon's investment in AI is part of a broader strategy, with plans to spend $75 billion on capital expenditures in 2024.

Brands can create dedicated holiday storefronts using Amazon Ads, featuring festive visuals and promotions. This approach allows you to explore curated selections and enjoy a seamless shopping experience.

Amazon is strategically expanding its range of everyday essentials to counter competition from Temu and Shein. By leveraging its extensive warehouse network, Amazon can offer low-priced items efficiently. This approach boosts customer frequency and basket size, despite pressure on average selling prices from rivals like Walmart and Target.

Leading Voices 📣

Jamie Bolton reveals how top eCommerce brands drive resilient growth:

🌐 Diversification is Key: A diverse channel mix acts as an “insurance policy” for brands amid rising CPAs and a challenging market.

🔄 Stay Agile: What worked last year may not work today. Top brands adjust their strategy over time, adapting to new growth levers as they mature.

📊 Measurement Matters: With channel diversity comes more complex measurement needs. Only with full-funnel attribution can brands assess their channel mix and remain agile.

For a full rundown, check out the full post!

Performance Pulse 📈

Ad prices fell in Q3 2024, impacting ad spend growth in search and social. Retail media saw a click surge, while new formats outpaced traditional channels. Amazon DSP and Google Performance Max showed significant growth. Lower prices increased ad volume, especially in retail media's purchase funnel.

To navigate rising holiday advertising costs, diversify your strategy by incorporating platforms like TikTok, YouTube, and Connected TV. These channels offer competitive pricing and reach new audiences. Focus on user-generated content and platform-specific strategies to optimize engagement and conversions, ensuring a successful holiday marketing campaign.

Front Row, an acceleration company, helps brands optimize e-commerce strategies on platforms like Amazon. By leveraging Deal Days, brands can boost sales and visibility. Success requires planning, unique offerings, and nurturing customer loyalty. Effective SEO and affiliate marketing are crucial for sustained growth and maximizing long-term benefits.

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