For this interview, E-Commerce Nation contacted the Head of Europe at Perpetua: Mark James to discuss pricing strategy on marketplaces. Specifically, we talked about Amazon.
Perpetua is a company that specialises in the development and monitoring of advertising campaigns on marketplaces, as well as on other promising channels for online sellers.
This interview was held as part of #AmafestUK, an event for Amazon professionals in Manchester.
Can you introduce yourself and your background?
Hi! I’m Mark and I lead Perpetua’s growth strategy in Europe. I’ve spent 11 years in Ad Tech working in both large companies like Google and Adobe, and most recently smaller companies like IAS and ROI Hunter.
Perpetua has grown phenomenally quickly over the last couple of years, and I’m excited to bring our product to sellers, agencies and brands across Europe and to continue our growth and expansion.
Can you introduce Perpetua and its activity?
We’re experts in marketplace advertising, in particular Amazon advertising. We’ve built an extremely successful business on the foundations of in the early days Amazon PPC / Sponsored Product ads, and rapidly expanded into Sponsored Brands + Sponsored Display and also Amazon’s DSP. Our particular area of expertise is in building software for sellers and agencies to automate manual tasks that waste the time of humans, such as campaign creation and bid optimization.
What are the opportunities that marketplaces present to e-retailers?
According to many industry experts, Retail Media (which is what we in advertising call advertising on marketplaces) is Digital Media’s ‘third big wave’ following on from the growth and now domination of Google and Facebook.
Marketplaces present an unmatched opportunity for brands to get their products in front of highly relevant audiences, often at the time they are ready to make a purchase. This is already a $31bn industry growing 53.4% YoY.
Amazon is now the default product search engine. 60% of shoppers in the US say that when they’re looking for a product online, they start their search on Amazon. Amazon is a great example but there are many others. If an e-retailer can get their products in front of those eyes with highly relevant products that are available at a good price point, there is a big opportunity to exploit.
We know that competition is strong on these platforms. What is the optimization process for advertising campaigns on these platforms?
Competition is strong, and getting stronger. We just released our Q4 Amazon Benchmarks report and for Sponsored Products, we saw an average increase of around 3% in CPCs across Europe QoQ, and in some markets CPAs increased as much as 28%!
How to optimize this is a question I could spend hours answering, to be honest. But my one piece of advice, albeit a slightly biased piece of advice, would be that there exists lots of great technology that can automate a lot of the hard work that’s required to optimize the management and optimization of campaigns which I would highly recommend exploring and leveraging. It’s going to take you so long to learn how to run Amazon ads efficiently yourself, and by time you learn it the system will have probably changed again! So just invest in technology and find good people to operate it. We say ‘spend time on strategy, not manual campaign management’.
What advice would you give to enter new markets via marketplaces?
I would firstly start by marketing your best performing products in other markets to increase your likelihood of getting a positive response to your business in new markets. And secondly I would keep a close eye on search term reports to understand what people are looking for in these new markets, as they might well be different to your home market. You can use this to define both your product and advertising strategy.
What are the differences between the advertising platforms of the marketplaces?
I would look at this as Amazon vs. everyone else when thinking about this one. The reason is that in simple terms, Amazon is very far ahead of everyone else and everyone else has relatively similar capabilities right now. The only competitor we see building something close to what Amazon has is Walmart who are even launching their own DSP solution which will give them almost a like-for-like advertising proposition.
Most other marketplaces have a simple proposition now in the form of paid product placements (similar to Amazon Sponsored Products) which can typically be bought on an auction or reserved basis. Many retailers are leveraging third parties such as Criteo and Citrue Ad and using their retail media technology to power their ad buying systems which should mean we see more retailers building a closer proposition to what Amazon offers in the near future, which is an exciting prospect if you’re an e-retailer ready to scale.
What advertising strategy should you adopt during peak traffic periods, such as the end-of-year holidays?
I would focus on three things.
Firstly, try to stand out from the crowd. We already know these times will be the most competitive of the year which means it’s easy to get lost in the noise. One great way to stand out is using Amazon’s Sponsored Brand and Sponsored Display ads. These provide additional placements for your ads to appear as well as the chance to get creative with imagery and messaging.
Secondly, it’s important to ensure that you stay as relevant as possible. So for example, make sure you have specific Black Friday campaigns running which advertise your Black Friday deals, ideally complimented across multiple channels and the message is consistent.
And finally, be prepared! Think about how early you need to start building interest in your products, how early your audience starts buying and adjust your strategy accordingly. For example, a couple of months before the peak you might like to focus more on brand awareness / interest generating ads, whereas in the week of Black Friday you’ll likely focus more on converting at a high rate at the bottom of the funnel through conversion-led ads such as Sponsored Products. Ideally, you’ve got this planned out and even better if you can pre-schedule your campaign changes as you can in Perpetua.
What advice would you give to merchants wishing to differentiate themselves on marketplaces?
Make sure you’re building interest with ‘upper funnel’ advertising. This means building awareness of your brand and products so that when the time is right for someone to purchase, your brand name and product is top of mind. Amazon makes it easy to do this with Sponsored Brands and they have options for incredibly creative and immersive formats like Video. You can also take this to the next level with Amazon’s DSP (quick plug for my talk at Amafest where I’ll cover best practices on this!) which allows you to target these potential customers on AND OFF Amazon.
You are participating this year to #AmafestUK, is it the first time you come? (if yes, what did you think of it? if no, what do you expect from this event?)
Yes, it is our first time. We’re always looking for ways to connect with sellers and share our expertise!
What do you think is the added value of an event on marketplaces professionals?
It’s a great chance to connect with other sellers and hear from experts from across different parts of the industry. At minimum, everyone should leave the event with new ideas and inspiration.