DTC Podcast Episode 462: Black Friday Insights: Amazon’s Changing Ad Strategies with Pilothouse | AKNF
Release Date: December 6, 2024
Host/Author: DTC Newsletter and Podcast
Title: Black Friday Insights: Amazon’s Changing Ad Strategies with Pilothouse | AKNF
1. Early Black Friday Returns and Turkey 12
As the DTC Podcast gears up for the Black Friday rush, hosts Eric, Clifford, and Rob delve into the preliminary performance indicators within the Amazon ecosystem, specifically focusing on "Turkey 12" (T12), Amazon's extended sales period leading up to Black Friday.
Rob Highlights Early Performance:
"[...] We saw some brands really pick up on the first few days of Turkey 12 and that's been really exciting."
— Rob (01:25)
Clifford Adds Nuances:
"[...] customers shouldn't have known that sales were starting. I mean, I guess they've just been starting earlier every year."
— Clifford (02:01)
The team discusses how early sales impacted overall revenue growth, noting that while T12 brought a significant revenue spike, the initial weeks of November saw softer sales compared to previous years. Clifford attributes part of this slowdown to the distractions of the election year, impacting consumer shopping behavior.
Eric’s Insight on Time Allocation:
"It's all a zero-sum game. You can only do really one thing at a time and fret about the election or cheer about the election."
— Eric (03:08)
2. Amazon Marketing Cloud and Ad Strategy Shifts
A substantial portion of the discussion centers around Amazon Marketing Cloud (AMC), its expanded data access for agencies, and the implications of increased data granularity on advertising strategies.
Clifford Raises Critical Questions:
"[...] Amazon is doing weird broad match things with some of these sponsored brand ads where they're going to show you to the word blue running shoes or running shoes or the word Nike."
— Clifford (03:55)
The hosts explore whether the additional data provided by AMC genuinely aids decision-making or serves as a mechanism for Amazon to encourage increased ad spending. Clifford expresses skepticism about the trustworthiness of AMC data, suggesting that broader targeting may not align with advertisers' specific campaign goals.
Eric on Targeting and Costs:
"The more you target, the more the price goes up."
— Eric (05:50)
Rob emphasizes the challenges of data specificity, noting that broader match types can obscure the effectiveness of campaigns by blending branded and generic term performances.
Rob on Data Specificity:
"[...] you have these branded terms. For example, mixing with a generic campaign, once that does, you now have a blended generic and branded ROAS on that campaign."
— Rob (08:17)
3. Introduction to Amazon Hall
The conversation shifts to Amazon Hall, Amazon's venture into the low-cost merchandise market, positioning it as a competitor to platforms like Temu and Shein.
Rob Explains Amazon Hall:
"It's primarily fulfilled from like direct from China I believe and it's mostly low cost items."
— Rob (10:21)
Clifford discusses the potential impact of Amazon Hall on brand perception, with concerns that it may dilute Amazon's premium image by associating it with lower-quality, budget-friendly products.
Clifford on Brand Impact:
"[...] there's a lot of people who had advised and said like you'll see a lot of conversation about Amazon shouldn't have done this because it cheapens their brand as a whole."
— Clifford (10:49)
4. AI in Amazon Advertising Tools
A critical examination of AI-driven tools in Amazon's advertising ecosystem features prominently, with Clifford and Eric expressing doubts about their efficacy.
Rob on AI Tool Scams:
"They were running like they were basically taking money, promising that they would launch your brand on Amazon, like help you find a product, help you to launch."
— Rob (16:22)
Clifford elaborates on the limitations of AI in managing Amazon PPC campaigns, arguing that much of the touted AI functionality is either misleading or unnecessary for effective campaign management.
Clifford on AI Limitations:
"[...] it's basic algebra, not even basic arithmetic. There's a little bit of human intuition that helps and looking at what keywords are important or less important..."
— Clifford (17:17)
Eric concurs, emphasizing the value of human oversight over reliance on purported AI solutions.
Eric’s Take on AI Hype:
"Human intelligence over artificial intelligence for now."
— Eric (19:56)
5. Black Friday and Cyber Monday Predictions
Concluding the episode, the hosts share their perspectives on the upcoming Black Friday and Cyber Monday events, considering factors like affordability pressures and Amazon's consistent performance.
Rob’s Optimism:
"I think it's going to do well. I think when you do have affordability pressure, you put pressure on, like, actually shopping bigger discounts and bigger sales days."
— Rob (20:39)
Clifford’s Confidence in Amazon:
"Amazon always comes through on Black Friday. [...] I have faith in their insane amount of marketing spend."
— Clifford (21:05)
They acknowledge the challenge of maintaining profitability while offering significant discounts but remain bullish on Amazon's ability to drive substantial sales through its extensive marketing strategies.
6. Additional Insights and Closing Remarks
The hosts touch upon recent developments, such as Amazon's announcement of no new fees in 2025, which they approach with cautious optimism, referencing historical precedents like political promises.
Rob on Amazon’s Fee Announcement:
"They did so many fee changes and increases and a few decreases last year that they're just saying no new fees this year."
— Rob (15:39)
Finally, they discuss the Ascend E-Commerce scam, highlighting the importance of vigilance against fraudulent platforms that exploit the promise of AI and Amazon expertise to defraud sellers.
Rob on E-Com Scam:
"[...] they're using cutting edge AI powered tools that would help consumers earn quickly thousands of dollars in passive income. They did none of that. They just took people's money and ran away with it."
— Rob (16:22)
Conclusion
Episode 462 of the DTC Podcast offers an in-depth analysis of Amazon's evolving advertising strategies in the lead-up to Black Friday, the implications of expanded data access through Amazon Marketing Cloud, and the introduction of Amazon Hall. The hosts provide critical insights into the challenges and opportunities facing direct-to-consumer brands on Amazon, particularly concerning ad spend optimization and the integration of AI tools. Their optimistic outlook on Amazon's Black Friday performance is tempered with cautionary notes on market dynamics and the importance of maintaining data specificity for effective marketing campaigns.
Listeners gain valuable perspectives on navigating Amazon's complex advertising landscape, preparing for major sales events, and safeguarding their brands against emerging challenges in the e-commerce space.