Nespresso uses Amazon DSP to build long-term customer relationships
The coffee pioneer beat CPA goals by 70% and drove sales three times higher on Amazon compared to its projected goals.
Known for its innovative machines that help millions enjoy premium coffees in portioned capsules, Nespresso applies the same commitment to quality in its advertising.
Merkle, one of its marketing agencies, tested Amazon DSP to programmatically reach Amazon shoppers on Amazon.com and across the web.
After the initial campaign, data analysis revealed an insight that encouraged Nespresso to try again, but with a different strategy that exceeded key performance indicators.
Test and learn
In October 2014, Merkle teamed with Amazon Advertising to advertise to Amazon shoppers. Its goals were to drive sales of Nespresso coffee machines at Nespresso.com and stay within a cost-per-acquisition (CPA) budget. The approach included:
- Using the Amazon DSP to engage shoppers at Amazon.com and across the web.
- Offering a credit with machine purchase from Nespresso.
- Performing an analysis of Nespresso.com visitors.
- Participating in an expanded Amazon campaign reporting beta test.
After the campaign launched, the teams learnt that machine sales on Nespresso.com were above the CPA budget requirement. For deeper understanding, the teams turned to Amazon’s campaign reporting, which included 15 new metrics available to beta testers.
They observed a significant lift in ad-attributed sales at Amazon. While the campaign was directing customers to Nespresso.com, Amazon shoppers exposed to the campaign were also buying Nespresso machines at Amazon. When sales of Nespresso machines at Amazon were combined with machine sales at Nespresso.com, the campaign beat the CPA goal by over 70% for certain SKUs and sales were three times higher on Amazon vs projected goals.
Continuous innovation drives sustainable growth
This insight led the team to continue the test until December. In addition to the campaign staying well below the CPA goal, shoppers continued buying machines at Amazon.
Upon learning this, for the first time, the team purchased ads that linked to Nespresso machines at Amazon, while other ads continued driving shoppers to Nespresso.com.
In February, the team tested two more offerings for the first time: Amazon’s Product Display Ads* and its mobile placements. Nespresso integrated the power of unique and familiar Amazon customer reviews of its machines directly into its ad units to help customers make smarter purchasing decisions.
The mobile placements helped drive awareness and visits to Nespresso’s product detail pages at Amazon, producing more machine sales at Amazon and a return on ad spend (ROAS) above Amazon’s category benchmark.
Nespresso and Merkle continue innovating with Amazon to start new customer relationships. In spring 2015, they began to transition from leveraging Amazon’s campaign management services on an insertion order basis, to directly create and manage Amazon DSP campaigns on their own.
*Product Display Ads audience and product targeting features are now accessed within Sponsored Display.