This is the new Brands and Amazon: Insights, Opportunities and Attention Report from Feedvisor in the Age of E-Commerce.
The study analyzed more than 500 U.S. brands’ journey and relationship with Amazon, and how the platform fits into their overall e-commerce plans, factors that motivate sales, advertising goals, monthly ad spend and annual revenue data, and specific strategies to drive sales.
The report shows that 74% of surveyed US merchants said they use Amazon Advertising to acquire new customers, focusing their attention on building customer lifetime value; followed by 59% who said they use the service to increase brand awareness. This is in stark contrast to the other 45% of respondents, whose seller goals are simply to “generate leads” and “drive sales.”
How much does it usually cost for sellers to invest in Amazon advertising?
When asked how much sellers spend on Amazon advertising, almost half (49%) said they spend more than $40,000 per month to achieve their advertising goals; about 38% of respondents said they spend more than $60,000 per month on Amazon advertising.
The report argues that hybrid and first-party brands spend significantly more on advertising than brands selling on third-party marketplaces. In terms of sales models, more than two-thirds of hybrid and first-party brands are paying for advertising, and 33% of third-party brands are also investing to stay competitive.
An analysis of spending on specific categories shows that advertising expenditures are much higher in the industry.
Categories such as toys and games, arts, crafts, sewing, apparel and accessories, and beauty programming saw spend levels significantly above the monthly average for Amazon Advertising.
Significant advertising budgets are evident in the pet supplies category, with brands often spending over $100,000 per month, with the average spend in the toys and games category ranging between $60-80 per month.
A cohesive value proposition and brand story are critical to convincing buyers to make a purchase.
However, sellers cannot rely on their advertising strategies alone. Sellers must prioritize frequent communication, high-quality products, competitive pricing, and differentiating their storefront with value-added features and benefits, all of which can increase customer loyalty and drive future purchases.
