Amazon's 'New to Brand' metrics and how can brands use them?
While brand owners are glad to see Amazon making an effort to provide helpful data, right now the new-to-brand metrics are extremely limited in usefulness.
Have you noticed those new brand metrics for your Sponsored Brand ads appearing in your Amazon Advertising platform?
“In a bid to offer more data to brand owners, Amazon is trying to demonstrate that it’s not only a terrific marketplace to find products at the best price, but that it’s a significant player in brand discovery.”
Amazon has introduced reporting metrics to show brands how many customers are ‘new-to-brand’. These new reporting metrics help Amazon Sellers and Vendors know whether consumers are going to the platform to discover brands or only buying brands they already know.
In a bid to offer more data to brand owners, Amazon is trying to demonstrate that it’s not only a terrific marketplace to find products at the best price, but that it’s a significant player in brand discovery.
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What are NTB Metrics?
As of January 2019, Amazon has introduced four new ad metrics for both Sellers and Vendors:
- New to Brand orders
This is the number of orders from your ads in the period selected that are new to your brand.
- New to Brand sales
This is the total revenue from your ads in the period selected that your new to brand orders have generated.
- % of orders new-to-brand
This is the percentage of your total orders from ads in the period selected that are new to your brand.
- % of sales new-to-brand
This is the percentage of your total ad revenue in the period selected that are new to your brand.
Amazon calculates that a customer is new to your brand if they haven’t purchased a product of yours on Amazon within the past 12 months.
It’s important to note that the metrics are available for Sponsored Brand Ads only.
Why are these metrics useful?
The data that Amazon gives it’s Sellers & Vendors is very limited. As a brand, it’s very hard to know how many of your customers are repeat purchasers versus who is new.
1. They give you an overview of how many of your sales are from new customers
These metrics make it easier for brand owners to understand how many customers have discovered their product through Amazon.
2. They give you an insight into how well your Sponsored Brand Ads are performing
Sponsored Brand Ads (previously known as Headline Search Ads) are top-of-the-funnel ads, designed to educate the consumer. If you have a high % of new-to-brand orders and sales, then your SB ads are performing well at attracting new customers.
What are the limitations?
Before you make significant changes based on this data, let’s review the limitations of the metrics too:
1. They’re only for Sponsored Brand Ads, not Sponsored Products
Orders and Revenue from Sponsored Brand Ads make up a small percentage of a brand’s overall Ad Revenue. The majority of Ad Revenue is generated from Sponsored Product Ads. Plus they’re metrics that only look at your Ad Revenue – they’re not representative of your sales overall.
2. Amazon only looks at the previous 12 months
Amazon defines a customer as “new-to-brand” if they haven’t purchased from your brand on Amazon within the last 12 months. While this may be useful for brands with a short sale cycle (less than a year), for brands with a longer sales cycle, the metrics don’t go back far enough.
3. The metrics only take Amazon sales into account
A customer may previously have bought your brand products through another channel: your website, or in a retail store. These metrics can’t take those sales into account.
Overall, these new metrics are a welcome addition from the Amazon Advertising team. They demonstrate that Amazon is trying to expand it’s reporting metrics in order to help brands make better advertising decisions on the platform. However, their use at the moment is limited: they give a good indication of your new customer rate, but they shouldn’t be judged in isolation.
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