​​Ad Spending Surged for Amazon in Q1 as Shoppers Stocked Up
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Advertising on Amazon has been volatile, as concerns over the coronavirus pandemic created a shopping frenzy for supplies. This drove many products out of stock, which, along with Amazon's deprioritization of nonneccessities, caused advertising competition in multiple categories to dry up.
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Still, consumers’ appetite for goods on the ecommerce marketplace drove an ad spending surge for Amazon in Q1 2020. According to performance marketing agency Merkle, client spending was up 67.3% on Sponsored Product ads and 118.3% on Sponsored Brand ads compared with Q1 2019. Tinuiti reported a 47% increase in client spending on Sponsored Brand ads, with Sponsored Product ad spending growing 24%. Yesterday, Amazon reported 44% growth in Q1 2020 in its "other" sales line item, which primarily includes advertising revenues.
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Merkle and Tinuiti also found that prices were rising on Sponsored Brand ads—but by dramatically different amounts. Tinuiti reported that the costs per click (CPCs) for US Sponsored Brand ads rose just 1% year over year in Q1 2020, while CPCs for Merkle's clients increased 52.4%. Amazon ad buying technology provider Pacvue reported relatively low growth in Sponsored Brand CPCs, at 5%.
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