003: Mastering Amazon Advertising: Boosting Sales, Building Brands, and Navigating Seasonal Trends with Joe Shelerud

Speaker 1: 0:00

Welcome everyone to the Brand Fortress HQ podcast. I'm your host, john Stogen, and today is a little bit different format. We actually have our co-founders for Brand Fortress HQ. We have Mike Kaufman and Matt Atkins joining us as well in this episode, because we're really excited about our guest today, joe Schellerud, who is the founder and CEO of Ad Advanced, and, for folks that may not be familiar with Joe, he's kind of an OG in the Amazon space, going all the way back to 2014. So a decade at this point, which is like a million years on Amazon, everything from selling his own brand to having his own agency at Ad Advanced, and then he also has his own podcast as well that I'm sure we'll talk about that as we dive in. So, joe, welcome to the show and tell folks that may not be familiar with you a little bit about yourself and how you got into Amazon.

Speaker 2: 0:50

Yeah, that is the first time I've actually been called an OG on Amazon. I love it, I mean, but it's funny the dangerous spirit here, joe.

Speaker 3: 0:59

I started in 2014, also back in the.

Speaker 2: 1:01

Wild West days. So there you go. Those are the good times, yeah, so yeah, as John was saying. So I got my start on the Amazon space in 2014. I'm actually a chemical engineer by training, so I started growing a brand, kind of as a little side gig, and as I was growing that up, while I was doing my chemical engineering job started to dig into advertising for my brand. I was selling these organic chemistry molecular model kits Super cool, they're used for O'Ken courses in colleges, so I was reaching out to a bunch of professors and stuff like that. Long story short, started really focusing on the advertising for my business, built a bunch of tools, ended up starting to add advanced with my co-founder, matt, and since that point we've been able to build up a lot of tech and tools, and then we've loved to share our journey along the way. I mean, a lot has changed since the early days in 2014 up to now, so I love hopping on podcasts like this just to share some things that we've learned, some share some mistakes that we've made, some successes that we've seen, and then key strategies that we see working well today.

Speaker 1: 2:18

Yeah, and the other thing that I noticed that's neat about you guys is that you were located in Duluth Minnesota. I went to college in Duluth so I have a special place kind of in my heart for Duluth. It's a beautiful area but you don't end up there by accident. So I'm curious what drew you guys there and what kind of kept you there as an ad agency, because obviously there's probably advantages to being closer to a big city and that type of stuff.

Speaker 2: 2:47

Yeah, yeah, I mean so for Duluth, minnesota. For those who don't know where it's at, it's at the tip of Lake Superior in Northern Minnesota. It's almost Canada. You can probably hear my somewhat Canadian accent. Literally, you drive up Interstate 35. You can hop on in Austin or Kansas City or wherever, take it up to where it ends and that is Duluth, minnesota. Yeah, so the key thing that drove me back here was I grew up in the area. I've got family all around and Duluth is a really unique place where you got to be a little bit crazy to live here. Like winters get really long, but the people who live here love living here. So outdoorsyness, like you get great four seasons. Winter lasts a little bit long, but you know that's kind of what drove a lot of us here. A lot of folks who work at Ad Advance were born here, want to stay here, and so we're really we're proud to kind of develop this in our small town where we can offer some awesome jobs and some awesome opportunities for different folks.

Speaker 1: 3:46

That's great man. Yeah, duluth is an amazing city. I remember going to college up there and getting a foot and a half of snow and still having class Like it's yep, everything just still moves. He was negative 11 yesterday and my oldest he was saying that he was getting hot and he was taking his gloves and his hat off and it's like dude, it's not hot out All right Well from Duluth, minnesota, and obviously you guys have done well and have a bunch of great strategies to share. What I really want to start with is talk to me about you know you mentioned this holistic approach for like building and defending your brand and a few different components you know, the first one being the search query performance report, which I think most people that are probably listening to this are familiar with. What it is. Maybe, starting there from that, with your holistic approach of you, know things that you think brands maybe are commonly missing, or you know you see a lot that they're missing out of the search query report that maybe not are so obvious to people.

Speaker 3: 4:52

Or maybe that they're using it incorrectly.

Speaker 2: 4:55

Yeah, Sure, yeah. So there's a couple of really cool ways that you can use the search query performance report and, for those who haven't seen it before, it's this report that'll break down different terms that people have searched, and before we could have the search term report where we could see our metrics from our own advertised products. But this gives overall metrics, so you can see overall search volume and then you can see market share percentage and what that means is, like you know, if somebody search for this term, if you have a market share percentage, a click market share percentage of 10%, that means that 10% who search for that term clicked on your product. And then there goes all the way to like add to cart sales, market share percentage, and so there's some really cool ways where you can see how you stack up against the competition. There's also some really great ways that you can see like overall seasonal trends. So, as a seller, some things that I really struggled with, like one was all right, sales go up or sales go down. Is it something that I did or is it something that externally changed? And these are the questions that would drive me crazy, because it's like, all right, sales just dropped. And it's like, okay, did I? Did I change something? Did something change that competitors make up ground, and if I had this report, I could look at it and see, oh, overall search volume dropped. And so it wasn't me. My market share percentage is still solid, and so one key way you can use it is just those overarching trends to know. All right, is it something that I did? Our competitors making up ground on me or are they not? Another really cool way to use the report is a key question I've always had is all right, I can advertise and I can protect my brand, and so this does two things. One, it keeps my competitors from showing up first on the top of search results. But the other thing that it does is, if somebody's searching for my brand, there's high likelihood that they actually scroll past the ads if I don't show up up top and go to my organic listing and click that and I don't have to pay for the ad and I make the sale. And so one key question we've always had is what is the true impact on my brand defense advertising that I have? And so what you can do with the search query performance report is, say, I'm currently defending my brand and I'm spending 20% of my budget right now defending my brand. I could cut that back. And I could cut that back, say, to like 10%, say, cut it in half or cut it out completely. And what I can do is look at the search query performance report before and after I make the change. And usually you want to give this a week or two to kind of play out. And then what you can do is see all right, did my market share percentage in sales drop after I stopped defending my brand with my brand defense ads? And you can see all right. So if it drops say it went from like 70% to 65% Now I have a dollar amount and I have a true value on what that brand defense spend actually brings me in terms of sales and profitability. And now I can analyze is it best to defend my brand and make sure that my competitors aren't cannibalizing some, they're not taking away some existing sales that would have come to me? Or can I now use that brand defense spend, which was really just taking credit for sales that would have happened, and now use those to grow my sales by focusing more on general search or more general keyword targeting? That's going to drive those incremental sales versus just take credit for sales. That would have happened Because, at the end of the day, our advertising is there to drive new sales, not just take credit for existing sales. That would have happened, and so this is a really powerful report that you can use to gut check how much does my brand defense spend actually have an incremental impact? So, from a service provider standpoint.

Speaker 4: 9:01

This is a question that clients ask a lot and now with the search query performance report, like we had a brand that we managed that their brand name had a higher search volume than the generic keywords in that space, like that's how much they dominated that category and those. That was the question that they asked us from the very beginning is we spend a lot on defending our own brand name. What were to happen if we wouldn't? And we were able to actually quantify exactly what happens when we dropped ad spend on our brand names by 50%. This was the result in sales. That's, that's the power of this report.

Speaker 3: 9:36

So I have a question, kind of a curiosity in regards to that. So in maybe Joe and or Matt, and maybe John as well, in your experience, if you've utilized the, the SQP, for this purpose and you've tested this with brands, how does the average case study, let's say, work out? Obviously it's different from brand to brand, but do you see, do you generally see, that it turns out maybe the brand defense isn't worth as much as we thought it was, or do you generally see now it's worth it every bit as much as we thought it was?

Speaker 2: 10:13

Sure, yeah, great question, and I would say in general it tends to fall a bit in the middle where it's like we don't want to completely cut it out. We, we just got an award from Amazon. It was a performance award. They have their partner performance gala that they use to make different case studies for it. So we had one with a brand called True Niogen. It's a supplement brand and we did this exact study for them and we found that we were able to reduce branded defense spend by a decent amount and actually put that towards other more general targeting campaigns that drove a lot more new to brand sales and especially with like supplements, where you have repeat purchases. New to brand is extremely valuable and so I would say it really depends on like host strong the consumer tie is to your brand. If you have a really strong tie with your brand and this really strong relationship, they're going to scroll down past all the other Amazon brand products and go to yours, whereas if you don't have as strong of a tie, then brand defense can be very valuable. So I think the key thing is like, when you're trying to gauge is like, how strong of a tie do people truly have to my brand. If it's really strong, then you can cut out brand defense quite a bit more than if it's just this week tie that they have. But they're searching for it, just looking for the general product. That's fair, thanks.

Speaker 1: 11:36

I think those are two great ways to use a search query performance reports. Are there any others that you can think of or that you want to share that you think kind of get missed, often by brands.

Speaker 2: 11:49

Yeah, yeah. So one other great one is so seasonality. Especially if you have a seasonal product, you can go back in history and pull weekly search query performance reports and what you can do is then see when sales volume really starts to trend up. And a common mistake I see that people make is they wait until volume starts to trend up and that's where they really ramp up advertising. But what you want to do is actually get a jump starting, get more aggressive on advertising before you start to see that peak. Because if you look at Amazon's algorithms, if you're generating more sales volume overall, especially for certain high volume keywords, they're going to say, hey, this product's more relevant and you're going to get ranked higher. And so if you can jump start that before the true seasonal period starts say I sell like winter clothing I might get a jump start on that earlier than when you start to really see the trends peak up. So then I can get that initial sales volume going. And the other major benefit is I can get my ad spend really tuned up ahead of time before that true spike comes in where I'm going to be spending quite a bit more. So another way to do it just go back in history. Pull weekly reports and then you can see all right, when does this? Yet? To combine them all together, it's a little bit of number crunching, but from there you can see the trends on when volume starts to peak. And then from there I would take that back, say two to six weeks, and say, ok, I'm going to really start to get aggressive a little bit ahead of time, start spinning that fly. We all get the sales volume up and that's going to set me up really well for when sales really start to pick up.

Speaker 1: 13:32

Does that process and analysis work really well for Q4, when we start looking at holidays as well?

Speaker 2: 13:39

Yep, yep, q4 is great. You always have to take into the weird nuances where, like this year, the whole holiday shopping season got moved forward and I think that trend's going to continue. So you know, like, yeah, all the Black Friday deals on Wednesdays in October from Walmart and everything. So you got to take that into account. But, yes, great point, john, that like looking at trends like that or say for like supplements, like January is kind of like the Q4 for like new supplements for new year and new you. We want to see when those trends truly start. Is it really like New Year's Day or does it start a little bit earlier? And then let's move back from that point and start ramp up our ads ahead of time.

Speaker 1: 14:23

Yeah, and I just I want to double click on a couple of things that you mentioned, especially for the Q4, because I know you know that's one of the best areas to be prepared for. And I think your advice on like being prepared a few weeks ahead of time before that peak starts so you can have, you know, maximum impactful with your ads, and also organically, is how now we have that October event that looks like it's going to continue to be a staple for Amazon, that sales event that they do in October. So that's going to change the algorithm a little bit from what you may have seen, you know, in year's path. And then also, like you said, black Friday. You know now all the Prime Day deals and that type of stuff actually run for an entire week. You know, starting from that, because I'm trying to remember, was it the Monday beforehand or the Tuesday beforehand to go through Cyber Monday? I think it was Tuesday to Tuesday. I think is how Amazon had it set up. Yeah, the Turkey 11. The Turkey 5 went to the Turkey week. Yeah, yeah. So just you know, as you're, I mean, it's great to analyze those numbers but, like you said, taking into account kind of how the market shifts a little bit from year to year, of what that you know full blown holiday window looks like, and especially with those those special events that I feel like you know you could see three times as much traffic on that day because of the window for those special events. Absolutely, joe, how far back.

Speaker 4: 15:47

Does the search query performance data go?

Speaker 2: 15:51

Let's see it was. I think you can get a year or two back. Now I would have to look. You can go back a decent amount in time. You can go back at least a year. I want to say it's two years. I think we could do get up to like 20, late 2021, early 2022.

Speaker 3: 16:11

There's a data piping type service. Can you pipe out that, that SQP data, as a yeah?

Speaker 2: 16:20

So right now, not currently available via the API, so you'd have to do like more like web scraping type items to get out of there, so this has been one major request. We get to tie out with the Amazon ads team quite a bit, and so if we can get this report coming via the API, which means we can get it into our system, there's so many different ways that we can use it, so one major request there. They're usually pretty good at taking our feedback to you. So hopefully sometime this year we can start to pull that out, and then I think you'll see a lot of different software systems that we'll be able to use, that We'll be able to generate these trends a lot easier than having to do it manually.

Speaker 1: 16:59

So brands that are out there that are like okay, you know, I'm going to look at these things in the search query performance report. I've identified kind of when that peak season or when I want to make sure that I'm, you know, really pushing hard. And maybe you know one of the other items that I see in here that you have is upper funnel marketing, both your sponsor brand and sponsor and DSP. So talk to me about how you know brands should be leveraging those for upper funnel marketing those couple of weeks ahead of time before they kind of get into peak season.

Speaker 2: 17:29

Yeah, yeah. So what we do, we call this kind of like a tent pole event. So if you picture a tent with the pole in the middle, you know we're ramping up on the front end and then we get a bunch of traffic and then there's other different tools we can take into account, kind of on that back end of the tent. And so what you can do is like if you're looking at your overall advertising funnel, what I would say is you always want to start with the bottom of the funnel, so that means closest to the sale, and then kind of work your up to more upper funnel advertising, and so you always want to start with the base, which is going to be sponsored product ads. So these are going to be bottom of funnel. People search for specific keywords. They're looking for your products. They tend to like buy very soon after they click the ad. Then you can start working to more like middle funnel ads, and so a sponsor brands can definitely fall in that category. Sponsored display can be anywhere in the funnel, like product targeting ads. They're going to be more bottom of funnel. They're going to be on different product detail pages. You can get all the way up to audience targeting, which is much more broad and upper funnel. And so the key way to look at the funnel as a whole is like, how close is an individual to the sale and am I just introducing them to my brand or my products Like that's going to be more upper funnel. Are they looking like they're just trying to find which product to purchase? That's going to be more like lower funnel. And so you know I would never consider DSP until you have that solid foundation built out. And this is where I see Amazon's DSP getting in a bad rap is that they've been sold by either Amazon or other agencies to go into DSP, spend a bunch of money to generate a bunch of awareness and I put this in quotes but not have the foundation there to drive that awareness into sales. So brand awareness doesn't mean anything unless it eventually generates sales for the business. And so it's the key thing I see Like first you got to make sure your foundation is built out and that's all sponsored ads, that's really focused on sponsored products first, then sponsor brand and sponsor display. Once you have that solid foundation built up now you can start to use more upper funnel strategies to generate that awareness and then have that foundation to turn those into sales.

Speaker 1: 19:57

What sort of markers should brands that are listening or sellers that are listening be looking for when they're like, hey, I don't know, if I have that foundation, I feel like I've done everything that I can with you know, sponsored product, sponsored brand, sponsored display. But what are maybe some of those metrics that are a good rule of thumb that they should be looking at to know, hey, I have this foundation and I'm ready to move on to DSP, or I've got some more work to do with what I have in front of me with sponsor product ads, etc.

Speaker 2: 20:25

Yeah, yeah, I mean. So what we see for, like general budget breakdowns, it's going to be about like 75 to 80 percent sponsor products, like I don't know, 15 to 20 percent sponsor brands, more like 15 percent. Sponsored display is usually going to be about 5 percent. So if you've got those breakdowns, you're running ads in each of those different areas. Like that's a good spot to start, like we do a full analysis. So like do you have solid keyword funnels that are flowing through on your sponsored ads? Like our bids tuned up, are you getting a good return? Are you not wasting your spend here? So it's just kind of like all these key housekeeping items that you have on the sponsored ad side and just knowing that we've got general good health there. And the other key thing is like are your sponsored ads profitable at the end of the day? Or they at least break even where they're driving sales and spinning the flywheel, but you're not losing money on them, because another common mistake I've seen people make is they go to DSP hoping to drive extra sales because they're not getting the profitability of their sponsored ads. The further up the funnel you go, the more broad you're targeting, the less sales you're going to get for a dollar invested, and so if you're not profitable on the bottom of the funnel, you're definitely not going to be profitable as you go further up the funnel with items like Amazon's DSP, and so that's another core thing that we look at is from a product and a profitability perspective. Are they in a healthy area where they have the margin to support this? Because the further up you go, your returns tend to diminish over time too, so that's another key thing I look at.

Speaker 4: 22:00

Joe, do you? Think sponsored display. One of the things that I've learned being in the agency space is that very few sellers leverage sponsored display. Very few of them are anywhere near 5% or 10% of their spend. Would you say that sponsored display is kind of a good training wheels, so to speak, for DSP. There's a lot of similar targetings. Can you kind of explain how that could be a stepping stone to DSP?

Speaker 2: 22:23

Yeah, it's a great testing ground. So for sponsored display, you've got many different flavors of it, so I would say that everybody should be running sponsored display product targeting ads. So product targeting ads they show up below the buy box or below the bullet points on the product detail page. They act a lot like sponsored product ads. So if you're having success with sponsored products, sponsored display, product targeting, lower funnel that's a good one to go to. Then there's other items like remarketing. So it's retargeting or repurchases. Retargeting can be great to drive people back who show an interest. Repurchases Great if you have a consumable product. Then if you start to get into audience targeting now this gets more upper funnel and sponsored display shares the same audiences. With Amazon's DSP you have much less control. So what we can do with DSP is stack multiple different audiences. Say, if we go to the winter clothing example, I could target different zip codes along with interests in winter, outdoors and things like that. Sponsored display you can just pick a single audience so you can't stack things on top of each other. You can't get as targeted. But sponsored display you don't have to go through an agency, you don't have to pay the extra fees to get into DSP. So that's a great spot to test and then, if you're seeing success, DSP could be a great next step for you.

Speaker 3: 23:49

So I was going to say a couple of things. One other thing just to point out when you're talking about stacking those audiences for anybody who doesn't know, I believe what you mean is the overlap of those audiences correct. So it's not we're going to this audience and this and this, but it's like what fits all three of those audiences at the same time. That's the person that we're advertising to.

Speaker 2: 24:11

Yeah, exactly, yep, thanks for the clarification there. And so what we're doing with DSP is like a red flag. If you go to an agency and they say, hey, we're going to target anybody interested in outdoors, for if I'm selling winter clothing, like huge red flag, because, all right, there's five million people in this audience, we're going to reach all of them and say, ok, not going to do that. Yeah, and so, mike, like what you're saying, we stack these different audiences to filter that down and down and down and down to try to reach the most relevant people who are going to be interested in our products. And you want to start small and very targeted and then work your way up. First is where I see people get burned as they start with this giant audience and then they say you know, I didn't see any results from that.

Speaker 3: 24:56

Do you know? So, on DSP, when you so, let's say you you set up a campaign and you set up your audience targeting and you've got it really no niche down and you're getting good production out of that, can you then modify that campaign as opposed to creating a new one? Or would it be better to create a new one to expand that? So like, ok, I've got this campaign, it's doing well, but maybe we could open that audience up just a little bit and get a little bit more traffic out of it and see, maybe we could do just as well. Would you be better off opening that audience up and can you even do that or would you be better off creating a new campaign that opens that audience and do a comparison between the two?

Speaker 2: 25:38

Yeah, we'll usually open a new one to be able to do those cross comparisons between the two. There's a lot of different tools that you can use to with Amazon's DSP and really that gets us into Amazon Marketing Cloud. So if you've heard of Amazon Marketing Cloud or AMC, what this is is it's a tool that essentially allows you to tap into Amazon's advertising database, but it makes sure that any of the results you get are summary results versus, like, individual user info, and so they really make sure that, from a privacy standpoint, anything that you get is a summary. So with AMC, there's a lot of power there. So what we can do is we could look at, say, that DSP Upper Funnel branded ad and then we could see, ok, what's the customer journey that leads to the most new to brand sales? So this is something that we did with that supplement company, trueniagen is that there's a lot of different educational routes you can take with their ads to try to drive new to brand sales. We were able to test multiple different ones. So, all right, this one's focused more on heart health, this one's focused more on, like mental ability and sustaining that, and we could see which ones resonated better. We could do different tests with different audiences and the different filters we were using there. And then we could track it through the whole customer journey, from that initial branded DSP ad all the way to sponsor products and sponsor brands, and then they finally purchased. And then, after the purchase, they came back and purchased again. And so that's the value of something like Amazon Marketing Cloud is it lets you tie together, say, like Amazon's DSP, with Amazon's sponsored ads, to see the big picture and this is where DSP can get really valuable is if you can track all the way from that upper funnel ad down to the sale. Now we have a much better idea on the impact of those upper funnel ads where, before we get to sale, here's the overall reach that you had or the number of people that saw it. What we want to take is hey, this is the amount we spent on these ads, this whole funnel, and here's what you got in return. And hey, this makes sense. This path worked a lot better. Let's really lean into that one, this one. Let's cut out spend and move it over here. So that's what Amazon Marketing Cloud allows you to do. You have to be running Amazon's DSP ads right now to get access to it, but it unlocks a huge amount, whether it's new to brand, lifetime value, customer journey overlap analysis. If they see this ad and this ad, how likely are they to purchase and lots of other good stuff there. So how does?

Speaker 1: 28:19

Amazon marketing stream compare to Amazon marketing cloud, like what's the difference between those two?

Speaker 2: 28:25

Yeah, yeah. So we've got all these Amazon marketing and then something else after it, so it can get really confusing. So Amazon marketing stream is another data. It's a data feed that Amazon has provided. This was a fun one. We get access to a lot of the betas, so we got to work with them before this was launched and actually tested out on some of our clients For Amazon marketing stream. The key value that we get from it is you can actually break down advertising results based off of the hour of the day, and so what we can see is these trends in consumer behavior is where, if you click on an ad at 2am, pacific time, versus if you click on an ad at 7am, versus if you click on an ad at 5pm, your likelihood that you're going to purchase after that click varies dramatically. And so what we can do with Amazon marketing stream is we can pull all these results in and then we're continuously modifying bids throughout the day to take into account those changes in performance. So, for instance, like at 2am, you're 50%, like you're half as likely to purchase as if, compared to if you click at 7am. So I click at 2am, I'm not going to purchase. I click at 7am like I wake up, I just get to work. Whatever there's something that's on my mind, I click the ad and I purchase right after the fact, and so what we can do is dramatically modify the bids using that information and key points is that if you don't change bids throughout the day, on average you pay a higher cost per click in those early morning hours when performance is the worst because everybody's budget resets. The auction then ratchets up, and so if you can save your spend in these early morning time periods or these time periods where you're less likely to make the sale, let your competitors spend their ad spend at that time and then get your ad shown more frequently when people are most likely to purchase. You're going to get a better return on your advertising. So Amazon marketing stream key thing to think of is like hourly data. Amazon marketing cloud is like how can I aggregate all this like high level advertising data together?

Speaker 4: 30:42

So before AMS was departing even possible. Could you, even could? It was departing even effective before AMS.

Speaker 2: 30:50

It was. It was effective and possible, but extremely clunky. So the only way that we could do it is I would take a single campaign and I would separate it, say, into four separate campaigns that would run throughout the day. So for four separate campaigns, each one would run for six hours, so the first one would run from midnight to six AM, the next one would run from six AM to noon and so on, and then, since the results were only reported on a day by day basis, now I could look at the individual results for each of those four campaigns and say, all right, from midnight to six AM that one kind of sucks. From six AM to noon, that one's a lot better and then modify bids with that. The key downside was now you're separating data between four different campaigns, and so it's this data scarcity and complexity. We needed our API and our system to be able to turn these on and off, so it was a pain. And to really segment it down to these like peak periods, you would have to create so many campaigns and many of this data scarcity issue. So we could do it before we had theories on what performed well and what didn't, but now having the actual data completely unlocks it so you can do continuous bidding like we do and other ways that I see people use this with success without the software is just knowing these trends. Some people will actually pause their campaigns when they leave at the end of the day because they know the golden period is kind of from like six AM to six PM Pacific time and then what they'll do is when they come in the office the next day they'll get their campaigns going again and just run them for that 12 hours when people are most likely to purchase. So there's a lot of different ways you can do it. If your budget constrained, day partying is a great option, so just turn them on when people are most likely to purchase. If you're not budget constrained and trying to optimize overall return from your ads, more of like a continuous bidding approach is great, but you need somebody like us to do that for you.

Speaker 1: 32:49

So for Amazon Marketing Stream, in order for a brand to be eligible for that, do they have to be running DSP or no? So?

Speaker 2: 32:57

Amazon Marketing Stream is open for everyone. So the major downside is that you have to be tied into the API to see what the results look like, and the data is really messy. So one thing that we offer you can go to our website at advancedcom. You can sign up for this free campaign report. We update it, we just pull from the API. We've already got this built out for our clients, so we just opened it up for everybody for free. So you have to sign up and give it 30 days because you can't backdate the Amazon Marketing Stream data, but what we'll do is actually produce your hourly results so then you can optimize around them. I'm totally free. No catch for that. We already had it built out, so we just opened it up for everybody. So for any listeners that are listening to this, you can just go to advancedcom and then find that under the resources and that'll give you your actual conversion rate trends where your peak row as is at throughout the day. It kind of breaks down a lot of these pieces that then you can use to decide like, hey, should I implement day parting? Amazon's kind of got day parting built into their ad console. Now it's a little bit clunky, but you can do that, or there's a ton of other tools where you can implement some of those takeaways too.

Speaker 1: 34:12

I was going to ask you about that because I know that Ramazon just rolled it out for day parting. Are you seeing that being effective and it's just hard to use, like a lot of other things that are in the console, or what's your take on the in-console day parting that Amazon offers?

Speaker 2: 34:28

Yeah, yeah. So I love that they offer day parting in console. That's sweet like my annoyance is that you can't decrease bids. You can only increase bids. And so you know, and so it's yeah, yeah, it's like, it's like come on, guys, yeah yeah, let's make it effective and then people use it and then their advertising is going to get better returns and then they'll invest more or spend into Amazon ads, so yeah, so the way you have to use it right now is you actually have to decrease all of your base bids, so then you can use this to, like, ramp up bids during certain times of the day. So really clunky. There's a lot of great tools out there that you can implement day parting really easy to, but you can do it in the ad console. It's just you can only increase spend during these peak periods.

Speaker 1: 35:14

Okay, and for any of those brands listening, are there any tools that you would recommend? That off the top of your head.

Speaker 2: 35:25

Let's see I can't. There's multiple that I know that other people use, it's just that I don't personally use them. I don't know if I feel okay, I just put myself out there for that. But, there are awesome, awesome software tools in the market. Friends with many people from all those areas, so, yeah, I just can't put my name on any one of them right now. Not a problem.

Speaker 1: 35:48

And I think the important piece to take away for a lot of brands out there is that if you're just looking on the ad console, I think this is still accurate is that generally it takes a couple of days before that data on the ad console is kind of 90% accurate. So even if you're not using the day parting bidding portion of it just to understand where I'm at for day one versus day two to have that hourly data, you can make changes so much faster based on accurate data as opposed to if you're just looking at the ad console where you have to wait a day or two before that data is accurate enough to make a decision on should I increase my bid or lower my bid.

Speaker 2: 36:30

So even that's a huge advantage, sure yep, the one thing to keep in mind is that you still do have that seven day attribution window for some of the ads and so, even though, like, the attributed sales are totally accurate by the hour, they will go up as you look back in time, just due to the attribution window. So if somebody clicks on the ad and six days later they purchase, now all of a sudden your sales on day X minus six is gonna increase a bit.

Speaker 1: 36:58

Okay, and do you have some rules of thumb for analyzing that data, cause it is a little bit different as far as looking at an hour by hour, versus once a day, versus kind of where we've been before, where we wait a couple of days to let the data settle before we make any decisions.

Speaker 2: 37:15

Yeah, so the really cool thing with the hourly data is that the trends hold pretty strong Once you look at an account by account basis. And so even during like different sales events we've looked at, say, like prime day, and it's like, okay, does that click at 2am? Does that mean more on prime day versus not? And it really doesn't like the overall conversion rate trends and everything stay pretty constant. And so the really nice thing is that if you look more at like aggregate, backward looking data, it's gonna be a pretty good prediction on what's gonna happen in the future too. And so what we do we use all these machine learning models and everything else like that, but really we're looking at like aggregate trends that we're seeing overall and then predicting the future and what we should do for bids based off of that. And so for looking at hourly data probably the biggest thing look at your overall trends and then you can optimize on those and note that they're probably not gonna change much like going in the future. We'll always keep you updating the data. Like a 9am click on Sunday definitely means something a little bit different than a 9am click on a Monday or Tuesday, but we take all those into account, but day by day, week by week, the results really don't change much in terms of overall, like user behavior.

Speaker 1: 38:33

Okay, and you mentioned seven days, which is what the sponsored product ads window is, and I think for our sponsor brand it's 14 days. So Amazon marketing stream right now is it just sponsored product ad data or is there sponsored brand and sponsored display data in there as well?

Speaker 2: 38:48

Yep, so they all tie in now, which is sweet.

Speaker 3: 38:53

Is DSP a part of that at all, or just the sponsored ads?

Speaker 2: 38:58

DSP, you can segment it in Amazon marketing cloud, but for that we're not optimizing bids like on a day by day or hour by hour basis. So the bidding algorithm set up a little bit different with DSP. Where it's not, the data isn't as usable as it is on like sponsored ads, where we can constantly update those bids. Gotcha.

Speaker 1: 39:21

So, moving on, we talked a lot about data for ads and, specifically, Amazon marketing stream and Amazon marketing cloud, which are great. The other two things that I see on here that I think are really important as kind of foundational numbers that I feel like we're getting back to an Amazon, but I've always been there for off of Amazon is lifetime value and cost for acquisition. Can you talk a little bit about how you guys look at that and track that on Amazon specifically?

Speaker 2: 39:49

Yeah, yeah. So when we look at brands that are able to dedicate significant advertising budgets and have decent margins over time, what we find it's those brands that can really drive like post purchase extra sales or drive cross sales to other products within their brands and so to sell that first individual product on Amazon. It's extremely competitive. And so any of the brands that can try to increase the overall lifetime value of that customer by giving them other products to buy after that initial purchase or having a really strong brand and being able to cross promote their other products, are the ones that we see really having longterm success on the platform. And so, like a great example is in the consumable space, like supplements, that first bottle of supplements that you buy. Let's just use an example it's $20. We could look at it based off of the initial sale, which is what the ad results are typically gonna tie to. So, say, we spent $20 to drive that new to brand sale for that initial bottle of supplements, so $20 in ad spend, $20 in ad sales. All right, roez is one, acos is 100% we can look and say, man, that sucks. But if we look at lifetime value and we know that when somebody purchases that first bottle of supplement, on average, they're gonna come back and buy four more bottles. Well, really, now we know that we're actually driving $100 in sales because they buy five of those $20 bottles versus just one. And so what we know is that that new to brand customer, instead of being worth just $20, is actually worth 100. And now, if we look at it, we spent $20 to get them to buy that initial bottle. Well, they're coming back and purchasing $100 worth of sales. Now, if I look at my lifetime value versus my cost per acquisition, it's actually I've got a 20% Acos or a 5x Roez, and so if you just look at reported ad numbers in terms of Acos or Roez, it could look really bad, because it's just gonna focus on that, it's gonna attribute that sale to that first sale. But if we can look at lifetime value and compare that to the cost per acquisition of that new to brand customer, now we can make much different advertising decisions. And so this is where some Amazon sellers and brands will pull their hair out and they'll say man, how are they able to, like, afford these cost per click? And the way that they're able to do that is they're not making profit on that first sale, but they're making sales after the fact to really drive the profitability and increase that lifetime value, and so this is one way that we've really looked at especially when we have products that are consumables is tracking lifetime value, comparing that to cost per acquisition and not leaning so hard on Acos or Roez as our key driver for our advertising strategy.

Speaker 1: 42:48

So for brands that are listening out there, that understand this concept of lifetime value but don't really know how to implement that on Amazon, like, what recommendations you have for them in order to figure out what their lifetime value is accurately?

Speaker 2: 43:02

Yeah, yeah. So lifetime value it's tricky to track on Amazon. We can do it within Amazon Marketing Cloud, and again, you need DSP spend to be able to pull this up. The other difficulty is that Amazon Marketing Cloud data doesn't go back in time extremely far. Right now they're looking to expand that, so once we're running it for a while for our clients, we can then use Amazon Marketing Cloud to calculate lifetime value. There's another tool, so a third party, that we use. It's called Nozzle. They can actually tap into, like previous, purchase history within Amazon and they can calculate a pretty solid lifetime value there. It's a key metric that we're continually asking from the Amazon ads team, too. Can we get more lifetime value metrics, because that's gonna help us make much better decisions on Amazon as a whole, and so right now, the best way is our Amazon Marketing Cloud. Unfortunately, you need DSP access and you need to give it a little bit of time to get that data. Or there's other third party providers like. We've used Nozzle and that's been really helpful.

Speaker 1: 44:06

And what about the other?

Speaker 3: 44:08

There's kind of a piece here that we should probably put a pin in, and that is if you are a seller that has a fairly short list of products, then to some degree you are likely shooting yourself in the foot in terms of that potential for lifetime value and therefore it makes it that much harder on you on the front end in terms of your advertising expenditures and how much you can actually put into that If you don't even have other products really to sell them. You know, like if I'm one hit wonder, I've got two products but I don't even really know how to market the second product to the people who bought the first, then I'm very limited. So if you're not taking that into account and paying attention to it and expanding your product line and finding ways to be able to market those additional products, then you really are in a top spot in terms of advertising.

Speaker 2: 45:06

Yep, totally agree. Yeah, it makes it a lot harder and, like Mike, when we started on Amazon it was like find any products that work don't have to be related like profit margins and everything were great. Now it's really trying to build like that solid brand with these products that tap into each other and that you can cross sell or try to drive repeat purchases. That really helps overall.

Speaker 4: 45:29

One of the core things that we teach and we have some resources for in brand fortress. And Mike doesn't have a consumable mostly most of his products are not consumable, but what he's done is he? First of all, he launches a lot of products, but he also has an after purchase funnel that collects data. So I mean, because of how Amazon is set up and it's their customer. Like if you are just, even if you launch a lot of products, if you're not in some kind of a way trying to build an audience from those people, then you know, like that data isn't really as effective. So, like that's the other thing for Mike, where it's not necessarily a consumable product, it's just how you build at the audience, how you build great products for them and then get in touch with them to let you know that you're launching a new one. So that's one of the things that Mike does really well. Even though it's not consumable, still valuable.

Speaker 1: 46:17

That's awesome. So I do want to get back to this because I think lifetime value is incredibly important. But the other thing you mentioned was cost per acquisition. We're looking at a customer. Walk me through some of the recommendations you'd have, for brands are listening on that end as well, Because I think that that's super important to know. You know how much am I paying to bring a new customer in and where can they find those metrics on Amazon.

Speaker 2: 46:43

Yeah. So if you're not using DSP, I think it's harder. So I keep going back to Amazon Marketing Cloud and I apologize for this. Like what's really cool with that is we can tap it together and then look at overall customer journeys and say, okay, our cost per acquisition when we show this ad here and then they go here and here, is a lot lower driving new to brand customers, and so we can filter the reports to get that specific information. So if you aren't using DSP and you're using sponsored ads, you know you can still use advertising spend to kind of get that cost per acquisition. They're starting to expand new to brand metrics, which definitely helps, especially if you have more of a consumable product than you want to focus on new to brand versus just overall sales. But overall cost per acquisition is going to cut kind of tie to like advertising spend if you've got a more simple funnel, if you've got like upper funnel all the way down. That's when tools like Amazon Marketing Cloud kind of come into account.

Speaker 1: 47:47

So do you think it's useful for brands? Because, like you said, you have, I think, within the console now they do have some pretty good numbers on like new to brand. So if you know, hey, I spent 10,000 in ads. 90% of my customers are new to brand. Now I've got an idea, at least a ballpark, of what that cost per acquisition is. Do you feel like that's accurate enough to at least get brand pointed in the right direction?

Speaker 2: 48:12

Yeah, yeah, and I think the key distinction is if your product is typically like a one purchase product, then the typical like ACOS or ROAS analysis is going to be very similar to cost per acquisition and new to brand and everything. It doesn't really matter as much if they're new to brand if I don't drive many repeat purchases, because everybody is essentially going to be new to brand. So if you have a product that gets a lot of repeat purchases or a lot of cross purchases, that's where it makes a lot more sense to dig into, like more of a cost per acquisition, lifetime value, new to brand analysis. If it's a single purchase product, then the typical ACOS, roas, spend sales is going to give you a really good representation overall.

Speaker 1: 48:55

Okay, yeah, and I think that's really helpful for folks. Mike or Matt, do you have any more Amazon questions before we spend a couple of minutes talking about Walmart? Okay, so I do want to spend a couple of minutes talking about Walmart because one of the things that I think is important for folks to know is that, yeah, you may not get the same amount of volume that you do on Amazon, but it's also not nearly as competitive, so there's still a lot of opportunity on Walmart and expanding into other channels as well. So, based on what you see on Walmart, what recommendations do you have for brands that are either deciding to dip their toe in the water or looking for some sort of metrics to know hey, am I getting the return I should off of Walmart compared to Amazon?

Speaker 2: 49:49

Yeah, yeah. So Walmart gets me pumped up. I remember it makes me feel more like the earlier days of Amazon. Honestly, like you know, competition is a lot lower, like there's a lot less features, which means it's a lot easier to get in right now and there's a lot of people who are still working to establish themselves. So while many brands have been selling on Walmart for quite a while, like competition, cost per click, all those items are quite a bit lower. If you look at your products overall, like I would just not assume that if something's doing really well on Amazon, that it's going to translate directly to Walmart, and so when people go to Amazon, they're shopping with certain, you know, looking for certain products. When I go to Walmart, I'm searching for a little bit different products. Like I'm now a Walmart plus member. I got roped into a good like Black Friday deal and it got me as a membership, but up here in Duluth, like we don't have an Amazon warehouse very close by. I've got all these Walmart stores and so like I can get same day delivery with Walmart where I can't with Amazon, and so where I tend to go to Walmart is those everyday items that I need, and so we've seen success with products that are selling more like say like kitchen type items or like. You know, if I look at like something say like garbage banks, coffee filters, different things like that that are more like home basics, like Walmart is kind of a go to spot for that, and so I would look at your products and see like, okay, do I feel like this would kind of like would it make sense to be in a Walmart store? But I will say that I'm starting to shop more and more in Walmart and I'm expanding what I'm looking for there too as I use it more. There's a lot of like in app usage when you're currently in Walmart, so you know, if I'm looking at products in store, a lot of people have the app out there searching for other alternatives. Overall, we've been really impressed with the Walmart team. They're making great strides on the advertising side, for sure. Competition is a lot lower. Yes, volume is a lot lower, but I think, if you can get yourself established like we are extremely bullish on what Walmart can do on the e-commerce side. So we've been having a lot of fun and honestly, it just reminds me like the earlier days of Amazon.

Speaker 1: 52:05

Okay, yeah, so I think that's a great perspective on Walmart for the brands that you know fit well into that. Like you said, kind of those basics and kind of as Walmart expands and we expect to see a lot more opportunity over the next couple of years there. So we've covered a lot of Amazon, we've covered a little bit of Walmart. What is, you know, maybe one takeaway that you would have, for you know, brands that are listening to this that they can, that they should look at right away in order to have an impact on their business.

Speaker 2: 52:37

Yeah, and that was on Walmart itself.

Speaker 1: 52:39

Well, let's, we talked a lot about Amazon, so maybe let's focus that towards Amazon.

Speaker 2: 52:46

Yeah, yeah. So for Amazon, for the key takeaways for your business to have success, I think it's always looking at the initial foundation first, and so we always love to focus on all the new advertising features and everything else like that, but it's not forgetting about the things that we've done to help build us up to where we're at. And so if I look at my advertising, like sponsor products is typically going to be like 80 to 85% of ad spend Usually 80. And so making sure that I've got that fully tuned up, that I've got the right bid structure, that I'm utilizing items like top of search placement adjustments and all the different fine tuning there, I think that's key. And so it's always starting with the foundation making sure that you have a solid foundation and then slowly testing and building up as you go. And probably my biggest thing is an advertising guys. It all comes back to the product and the product detail page and the conversion rate and everything else like that. So while we talked about advertising quite a bit, there's a key focus area on what your competitive conversion rate is compared to other listings that are out there. If your listing doesn't convert as well, your ads are never going to perform as well as they should, and so it always starts with the product, starts with the product detail page. We didn't talk about that much, but then the advertising strategy comes next. So never just jump to ads. Always start with those two items first, make sure you feel really solid, then start building that advertising foundation.

Speaker 1: 54:20

Yeah, I think that's where I kind of the top of our conversation about. The search query performance report is a great place for people to find that data if they're ever like, hey, how do I compare to my competitors? There's so much data on how you do compare as a brand, as an individual product, all the way down to the keyword level. And then I know one of my takeaways is for folks that are interested in the Amazon marketing stream, that free audit that you guys offer for performance to really get that hour by hour data and looking at what they can do for bids there. And then for folks that are interested in kind of really diving into the more advanced level of ads. You also do a podcast as well, called ad project, where I'm sure you guys have a bunch of great information for people that really want to roll up their sleeves on the ad side. Also, any other place that people that are interested in connecting with you, joe, we're learning more about you should reach out.

Speaker 2: 55:17

Yeah, I think you covered them. Connect with me on LinkedIn. Send me a message. Love to connect with everybody. Youtube we're going to be putting out a lot more educational videos coming up to this year too, so make sure you make sure you find the ad advanced there.

Speaker 1: 55:30

Awesome. Well, thank you so much, Joe, for being on the podcast. We really appreciate it.

Speaker 2: 55:35

Yeah, yeah, great to talk with you guys, I really appreciate it. You've been having me on.