Situation: Maximizing ROAS Through Amazon's Advertising Solutions

A leading international household goods brand has effectively employed Amazon's diversified advertising solutions, such as Sponsored Ads (SA) and Amazon Demand Side Platform (DSP), to carve outa significant market space in their respective category. However, to further refine and optimize their advertising strategy, they aimed to dissect the incremental sales impact generated by DSP ad investments. The ultimate goal was to fine-tune the balance of budget allocation between DSP and Sponsored Ads in a manner that would maximize the return on advertising spend (ROAS).

Approach:  Advanced Analysis Models to Evaluate Advertising Impact

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Our strategy employed Amazon Marketing Cloud's (AMC) pre-constructed overlap analysis model, an essential tool for deciphering audience overlap between DSP and Sponsored Products (SP).This approach facilitated a thorough analysis of conversion efficiency, enabling a better understanding of the sales funnel.

Moreover, to understand the intricate customer journey and the impact of different touchpoints on the final purchase, we leveraged a "Markov Chain" model. This technique allowed us to conduct a sophisticated multi-touch analysis (MTA) that helped pinpoint the individual contribution of each advertising format to the total purchase conversions.

Results: Optimizing Conversion Through Strategic Budget Reallocations

Through this strategic and data-driven approach, we unveiled a substantial 16.7% uptick in conversion rates when audiences were targeted by both DSP and SP ads, as compared to SP-only audiences. This valuable insight led to the calibration of bidding strategies and a reassessment of budget allocations for on and off-Amazon advertising efforts. This fine-tuning process also allowed us to establish an optimal frequency cap, ensuring that our ads were not over-saturating our target audience.

Furthermore, the multi-touch analysis (MTA) model demonstrated its worth by directing a strategic budget reallocation between SA and DSP. This reshuffling was driven by data on the differentiated impact of each ad type on the customer's path to purchase. The end result was an impressive 15.9% surge in conversion rates, reflecting the efficacy of our strategic approach and data-driven decision-making process.

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This comprehensive analysis and optimization process using advanced tools like AMC and the "Markov Chain" model brought about measurable improvements in conversion rates, proving the value of a meticulous, data-based approach to digital advertising strategy. The household goods brand not only improved its ROAS but also gained valuable insights for future strategic planning and budget allocations.

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