The Importance of Amazon Advertising Analytics for Amazon Ad Agencies
Amazon advertising is a booming industry. Last year, the world’s largest online retailer became the third-biggest digital advertising company, behind only Google and Facebook, with $31 billion in ad revenue.¹ Getting advertising right is a crucial part of becoming a successful Amazon Seller, and Amazon ad agencies are responsible for helping businesses achieve this.
As an agency, you want to help your customers grow — because that’s how you grow too. But the role of an Amazon marketing agency isn’t just to create successful ad campaigns and strategies. It’s also about showing customers what’s happening under the hood of the campaigns you’re running on their behalf. Because it’s one thing to know whether a campaign was successful or not, but another altogether to understand why.
While Amazon provides you with some data, it’s not enough to gain a complete picture. This is where Amazon advertising analytics tools like Nozzle can help, providing you and your customers with the granularity and data-driven insights you need to grow and succeed.
Why are Amazon advertising analytics important for ad agencies?
As an Amazon ad agency, your clients expect two things from you: successful ad campaigns and the reports and analysis to understand why they were successful. The key to both is analytics.
Analytics isn’t just about gathering data. It’s about harnessing that data to uncover powerful insights that drive smarter decisions. Some of the ads data you need is readily available via Amazon, including:
- Amazon Advertising reports
- Amazon Brand Analytics
- Amazon MWS
- Amazon DSP.
But these alone aren’t enough. Amazon Ads reports only utilize a few months’ worth of data, making it difficult to track the customer journey and understand certain key metrics such as customer lifetime value (CLV). Amazon Brand Analytics and other data sources are also tricky to use. It can be difficult to know where to start, let alone draw all the information together in a coherent way.
Without the right data, your view of what’s really going on will be limited, distorted, and incomplete. You need to know how your client’s display ads and product ads are actually performing. What’s more, the process of collating data can be time-consuming, with many agencies still presenting this information manually via spreadsheets.
An Amazon analytics tool like Nozzle provides clarity and insight. Nozzle brings together all the information you and your customers need from multiple sources in one place, giving you a complete picture of what’s going on. Not only do you get rich data and powerful insights, but you also get them presented in clear, easy-to-understand visualizations. Know what’s going on, and why, and you can start to create effective advertising campaigns.
The importance of effective Amazon ad campaigns cannot be understated. Amazon consistently averages over two billion visits to its website each month², with 80% of people there to discover new products and brands.³ A data-driven marketing strategy and advertising campaign is how you tap into this massive market and harness its potential.
Suggested reading: For a detailed explanation of the six types of Amazon Advertising reports and how you can use them to boost your PPC campaigns, take a look at our article: 6 Amazon PPC reports: and why you should be using them.
Using an analytics tool to help Amazon advertising agencies
We’ve discussed how Amazon advertising analytics plays a crucial role in helping agencies deliver better results for their customers, but how does this work in practice? In this section, we’ll look at three key ways.
Audit your campaigns
Whether you are taking the reins directly from the Seller or another agency, you need a clear and complete picture of what’s going on. Auditing your marketing campaigns, and PPC audits in particular, is an effective way to do this, allowing you to:
- Ensure that your customer’s advertising strategy is aligned with their broader strategic goals
- Shine a light on advertising performance, cost, and ROI
- Pinpoint areas where campaigns can be optimized and improved
- Maximize potential for growth
- Spot opportunities as they emerge.
Focus on the right metrics
Analytics tools allow you to focus on the key Amazon ad metrics, enabling you to uncover insights around performance and visibility. This ties back to the audit process too — after all, different strategic goals require you to track and utilize different metrics.
Some of the most commonly tracked and useful metrics for Amazon and PPC advertising include:
- Advertising cost of sale (ACoS): This metric compares the amount spent on an ad campaign to the amount earned through that campaign. Essentially, ACoS represents the amount you spent on your ad to gain a pound of revenue, so the lower the better.
- Click-through rate (CTR): As the name suggests, this metric measures the number of people who click on an advert as a percentage of the total number of views. CTR is a good indication of how well your keywords are performing.
- Conversion rate (CVR): One of the most crucial long-term metrics, CVR measures how many people who click on your ad go on to actually buy a product. It’s a solid way to measure how effective your product-related content is and whether you are pushing the right sponsored products.
- Return on ad spend (RoAS): The inverse of ACoS, RoAS tells you how much money a Seller earns for every pound they spent on an ad campaign.
It’s important to understand and track these metrics as they provide powerful indications around the overall success and cost-effectiveness of Amazon advertising campaigns. But it’s not just about focusing on existing campaign performance.
To identify areas for growth and improvement, and then optimize ad campaigns accordingly, you need to understand the behavior of your clients’ customers. And this is where metrics such as CLV, or customer lifetime value, come in.
With Nozzle’s CLV analysis, you can identify exactly how much each customer is worth to your client’s business in the long term and calculate your breakeven ACoS — two key data points you need to help your clients outperform their competitors.
Further reading: For a closer look at these key metrics and how your Amazon PPC agency can use them to turbocharge Amazon ads, take a look at our article: Amazon PPC Reporting: 5 Critical Metrics.
Optimize ad campaigns
Armed with this data, you can create a complete PPC strategy for your clients, built on powerful data-driven insights. Whatever direction you take with your advertising strategies, Nozzle’s data analytics can help you optimize your clients’ campaigns. In practice, this involves using:
- The right keywords for PPC campaigns based on what in-life data shows is working (or not working)
- CLV analysis to identify and target the most high-value customers
- Purchase analysis to find out if you are pushing the right products on Amazon
Plus, with Nozzle’s custom dashboards, ensuring you waste less time buried in spreadsheets and more time helping your clients grow. Our performance summary report provides an overview of the most critical metrics in one easy-to-read view, saving you the time of manually compiling the data.
Instead of spending time compiling reports, you can used Nozzle’s intuitive dashboards to bring your clients into the loop and show them how their campaigns are performing.
Boost your clients’ Amazon advertising campaigns
As an Amazon ad agency, you want to serve your clients as best you can — and that means helping them build successful strategies that outperform the competition. But to do that, you need access to the right data. That means using a dedicated Amazon analytics platform, like Nozzle.
Nozzle provides you with the complete picture you need to make smarter, more informed decisions about your clients’ ad campaigns. Our unique customer insights feature unprecedented granularity, allowing you to track performance, optimize ad campaigns, and unlock powerful growth opportunities.
What’s more, we offer quarterly calls with our Amazon advertising specialists, providing you with the direct feedback, advice, and best practices you need to get clear, actionable insights.
If you’d like to find out how Nozzle could push your agency to the next level, get in touch today and book a demo.