Advertising during Amazon events can attract customers

By: Koen Pauwels, Principal Research Scientist

Advertisers often ask how to make the most of major shopping events like Prime Day and Black Friday/Cyber Monday in order to strengthen their Amazon marketing strategy.

Story highlights:

In a 2019 study of the top 15 single-serve coffee brands, we observed a significant increase in both the volume and proportion of new-to-brand customer purchases during Prime Day, Black Friday/Cyber Monday. During the year after their first purchase, this group of customers went on to make repeat purchases of the items they first purchased during the events.

1. Amazon events like Prime Day and Black Friday/Cyber Monday can be especially effective at attracting new-to-brand customers for advertisers

Prime Day and Black Friday/Cyber Monday are key shopping events that can attract new-to-brand (NTB) customers (first time purchasers of an advertised product over the prior year) at a significantly higher rate than normal. In 2019, the daily average number of new-to-brand customers based on Prime Day purchases was 2.1x higher than during the rest of the year, and the daily average number of new-to-brand customers during Black Friday/Cyber Monday was 1.5x higher than the rest of the year.

The ratio of new to existing customers (as a whole) was also higher than the average of 32%. On Prime Day, new-to-brand customers made up 40% of purchases, and during Black Friday/Cyber Monday, they made up 76%.

2. Brands saw increased sales benefit when customers made their first purchase of single-serve coffee during Amazon events

The collective annual spend of customers that made their first purchase during Prime Day and Black Friday/Cyber Monday was more than 1.9x and 1.2x, respectively, the total annual spend for new to brand customers during the average non-Amazon day.

NTB customers purchasing during Amazon events spent less over the following year than other NTB customers, indexing 0.9x and 0.8x baseline NTB spend per customer. However, the numbers of NTB customers during these two Amazon periods were high enough, at 2.1x and 1.5x, respectively, that the volume of NTB customers made up for the lower average per-customer spend. As a result, the sales value of NTB customers purchasing during Amazon events remains relatively high against other days of the year, and advertisers should expect that customers who make their first purchase during Amazon events will contribute additional sales to their brand over the following year.

New To Brand (NTB) Customers Spend by Amazon Event

Total NTB First-Year Spend Indexed vs. BaselineBaselinePrime DayBlack Friday/ Cyber Monday
Average NTB First-Year Spend Indexed vs. Baseline10.0.8
Daily Number of NTB Customers Indexed vs. Baseline12.11.5
Total NTB First-Year Spend Indexed vs. Baseline11.91.2

3. Display advertising help increase the effectiveness of discounts in driving new-to-brand purchases

Advertisers that offered a discount during Prime Day and Black Friday/Cyber Monday attracted more NTB customers than the average non-Amazon event day. Moreover, those who also ran display advertising saw an even greater increase their total NTB customers that those offering a discount alone.

During Prime Day, brands that offered a discount and used display advertising had 57% more NTB customers than brands that offered a discount alone. During Black Friday/Cyber Monday, brands that offered a discount and used display advertising had 13% more new NTB customers than brands that offered a discount alone. The data shows offering a discount and complementing it with display advertising can help advertisers reach more customers during Prime Day and Black Friday/Cyber Monday.

New To Brand (NTB) customers by promotion type

Prime Day

Discount only (Group 1): 2.1 and Display and discount (Group 2): 3.3

Black Friday/ Cyber Monday

Discount only (Group 1): 1.5 and Display and discount (Group 2): 1.7

Discount only (Group 1)

Display and discount (Group 2)

Methodology

Advertiser selection

The top 15 brands in the single-serve coffee pods and capsules category were selected for this study. Each Amazon event and the following 12 months was included in the study for a total period of just over 2 years.

Key Metrics/indices

Custom metrics were assigned to these brands based on new-to-brand acquisition.

  • New-to-brand customer acquisition metrics
    • Daily average number of new-to-brand customers during Amazon events vs. rest of year
    • Total new-to-brand first year spend of customers acquired during Amazon events vs. all other new-to-brand customers
    • Ratio of new-to-brand customers vs. existing or repeat customers
    • Average new-to-brand first year spend vs. existing customer spend.

How did we determine these results were significant?

We applied ANOVA tests to determine if the differences observed among our 15 advertisers were significant. We used a Gradient Boosting model to explore the importance of display advertising, and discounts. The gradient boosting model provided additional evidence that the combination of offering a discount and advertising was more likely to drive incremental new customers than advertising or offering a discount alone.