In today’s data-driven marketing landscape, the ability to ask the right questions is paramount. Amazon Marketing Cloud (AMC) emerges as the magic 8-ball of advertising solutions, offering advertisers a robust platform for precise analytics and strategic decision-making. If you’re new to AMC, it’s a secure, privacy-friendly, dedicated cloud-based measurement and analytics solution introduced in 2021.
Understanding the Value of Amazon Marketing Cloud
Built on Amazon Web Services (AWS), AMC provides a flexible environment that empowers advertisers with customizable reporting capabilities based on event-level data across various data sets. These data sets can encompass both advertiser data and Amazon Advertising data, granting advertisers a comprehensive view of campaign performance. In essence, AMC equips advertisers with transparent, cross-channel data essential for making informed marketing decisions, a necessity in today’s marketing landscape.
For a comprehensive understanding of AMC basics, Tinuiti’s AMC overview provides all the essential information about the Amazon Marketing Cloud.
This article is part of a series where we dive into specific AMC use cases. In this installment, we focus on the Path to Purchase analysis, guiding you through utilizing this report to address critical business questions, pinpoint key metrics, and strategically apply derived insights. View another entry in this series here.
What is the Path to Purchase Analysis?
The Path to Purchase report enables you to identify the most popular ad paths your customers took before purchasing your products on Amazon. This Instructional Query (IQ), part of the AMC Instructional Query Library (IQL), compares unique combinations of these ad activations across:
- Efficiency (ROAS)
- Awareness (Impressions)
- Consideration (Detail Page View Rate)
- Conversion (Purchase Rate)
- Growth (New-to-Brand Rate)
The metrics provided by this report analyze reach and performance across a full-funnel strategy, including DSP Display, Streaming TV, and Sponsored Ads.
To utilize this report, it is required to have data from multiple DSP and Sponsored Ads campaigns. If you only have one campaign, the query will return results, but they will be limited to the single campaign and the path journey insights will not be available. This use case is designed to help answer business questions surrounding how to best leverage the array of Amazon Ad products.
Here are a few examples of the types of questions the Path to Purchase analysis addresses:
- What ad types frequently lead to the highest purchase rate? Should we increase investment in certain channels that show purchase rate improvement?
- What are the best channels/campaigns to be a first touchpoint to a customer to help them convert? What is the best last touchpoint? What are campaigns or ad types that are commonly featured in customers conversion paths?
- How do different attribution models affect the ROAS of campaigns? Does last touch attribution overweight the importance of certain campaigns?
- What is the most common campaign path that leads to the most customer conversions?
The following metrics tend to be the most useful in addressing the business questions above:
- Path Occurrences: Number of unique users who were exposed to the ad campaigns in their conversion path
- To calculate the following KPIs:
- Conversion Rate: pull orders and impressions
- ROAS: pull spend and product sales
- ACOS: pull product sales and spend
- NTB: if advertising goals are focused around growth, pull the analysis to look at the NTB path to conversion vs. the path to conversion for existing customers
Below is a sample case study used to address the following question: When shoppers are exposed to Display Ads, what is the impact on conversion rates?
Here is an example of what a finalized report looks like:
To answer the original question, the key metric to review here is the Purchase Rate (PR). When display is the first touch point in a customer’s path to purchase, they are more likely to convert. The top two highest converting ad paths start with Display, demonstrating the correlation between the inclusion of Display in the media mix and an increased Purchase Rate.
As a result of these findings, this advertiser should maintain, or increase, spend in Display placements even if it’s not delivering as high a ROAS as Sponsored Ads. This data shows Display is the most effective first touchpoint in leading a customer to convert.
AMC’s Path to Purchase Analysis: Key Takeaways and Next Steps for Enhanced Conversions
AMC’s Path to Purchase analysis highlights the impact of middle and upper funnel ads on conversion rates. Tinuiti’s teams observe many brands prioritizing Sponsored Products due to their perceived low risk and high returns under Amazon’s last-touch attribution model. However, this approach overlooks the influence of other ad types. Data from this analysis underscores the effectiveness of a holistic strategy. While a Sponsored Products ad may lead to a sale, it doesn’t consider other ad exposures that shape purchase decisions.
The table below shows how last-touch attribution doesn’t fully capture the impact of an ad type. If we look at first-touch attribution, the ROAS may be much higher for those same ad types.
The Path to Purchase analysis underscores the value of a full-funnel strategy and the impact of DSP media on overall performance. Based on these insights, advertisers should consider adjusting budget allocations to DSP.
This use case also uncovers trends in customer behavior such as which conversion path attracts the most repeat customers compared to NTB or which conversion path attracts the most impressions compared to the most conversions.
One disclaimer to be aware of with the Path to Purchase query in the Instructional Query Library (IQL). The IQL queries promoted-ASIN sales for ADSP conversions, and Brand Halo sales Sponsored Ads conversions. This creates a variation in the conversion metrics for analyses pulled across ADSP and Sponsored Ads campaigns. That said, it is possible to customize this query to pull promoted-ASIN sales, or brand halo sales, across both ADSP and Sponsored Ads, which would eliminate this variation.
If you need help making those custom changes to the IQL or you have questions about Path to Purchase or any other AMC use cases, reach out to Tinuiti today.