This article is part of Glossy’s Beauty and Wellness Briefing, which features exclusive news, interviews with industry change makers and behind-the-scenes looks at what actually matters. To receive the Beauty and Wellness Briefing and read for free, please subscribe.
Between March and August of this year, Amazon debuted its first private-label skin-care line, Belei; launched the Amazon Professional Beauty Store; and became the exclusive distributor of Lady Gaga’s Haus Laboratories. These rapid and feverish moves within the beauty category displayed one thing: Amazon was here to play.
The Amazon holdouts in beauty have been well-documented, but does that really matter anymore when convenience is king? Whether or not beauty companies want Amazon to account for the majority of their annual sales, more are regarding the platform as integral for search, as well as ratings and reviews.
This has been lip balm brand Eos’ positioning.
For Eos, the vast majority of sales are done in brick-and-mortar stores, at retail partners like Target and Ulta. Amazon accounts for less than 10% of sales, said Soyoung Kang, Eos chief marketing officer. The company began selling on Amazon in 2017. However, strong relationships with other retailers doesn’t mean Eos isn’t taking Amazon marketing seriously. This is taking shape in two ways: making its Amazon strategy mirror what it does on other social media platforms like Instagram or YouTube (through paid display and video advertising) and secondly, paid search. Kang said Eos is investing the bulk of its dollars into the latter, which it first began in September 2018.
“The unique thing about Amazon is that if you aren’t in a place to build out your own DTC or have the resources, Amazon is an interesting way to create your e-commerce presence. It makes conversion really easy for the end consumer,” said Kang. “It’s been such a popular place to research products, so if a user types in ‘Eos lipbalm’ or more broadly, ‘lipbalm,’ we want to show up.”
Key words have also been the way forward for Virtue Labs, which took the Amazon plunge via Luxury Beauty in July.
“Our age and immaturity has been an advantage. We’ve been able to pulse and see what is working,” said Virtue Labs founder and CEO Melisse Shaban of Amazon ad levers like its Daily Deals. “We don’t want Amazon to outpace our other businesses; we want every [channel] to have a chance and experience growth incrementally at this point.”
Since Virtue Labs is new to Amazon, Shaban said Amazon sales are currently a small single-digit percentage of the brand’s total sales. She estimates that, next year, the platform will account for 8% of total sales. Leveraging paid search on Amazon will remain its only advertising lever into early 2020.
But waiting to market on Amazon could negatively impact those still weighing the platform’s seduction attempts, especially in light of what has happened to customer acquisition costs on Facebook and Instagram. When more brands run to a marketing channel, costs skyrocket.
“Its pay to play; the opportunities for organic reach years ago don’t exist today,” said Mark Power, founder and CEO of Podean Marketplace Marketing.
According to an internal analysis of Amazon account averages by Bobsled Marketing, sponsored ads, sponsored display units and sponsored products in beauty have risen. In January 2016, those costs-per-click were just $0.36, $0.90 and $0.76, respectively. By August 2018, CPCs increased or stayed the same — sponsored ads clocked in at $1.66 and sponsored product ads jumped to $1.51; only sponsored display ads decreased marginally. As of November 2019, Bobsled Marketing found that CPC for sponsored brand ads had spiked again to $1.79.
“The cost-per-click has been growing steadily for two-and-a-half years for sponsored product and sponsored brand ads on Amazon, and with it RoAS [return on Amazon ad spend] has been decreasing,” said Stefan Jordev, advertising director at Bobsled Marketing. He said sponsored products saw 75% more return on Amazon ad spend than sponsored brands (the RoAS were a multiplier of 3.33 compared to 2.51).
“Compared to 11 other categories we’ve analyzed over the year, it shows that beauty is among the most expensive categories to advertise in [on Amazon],” he said. Jordev compared the beauty segment to the other consumer segments like apparel, jewelry, kitchen goods, outdoor products and, even, furniture.
John Ghiorso, founder and CEO of Amazon marketing agency Orcapac, said while some categories like kitchen appliances have found equilibrium in advertising on Amazon, beauty will continue to see rising CPCs across mass, indie and luxury because so many of the big guns haven’t taken the platform seriously. Across all three segments in beauty, major players like Chanel refuse to consider selling on Amazon.
This is a clearly something to think about.
“With any platform with a biddable buying process, the cost is driven by demand. What we’ve experienced is, as more existing and niche, entrepreneurial brands are using Amazon as a legitimate distribution partner, the prices are rising,” said Kang of paid search opportunities. Still, she said 2019 search spend has “paid off” for Eos.
Shaban agreed. “It’s getting more expensive across the board, and if Amazon is anything like Facebook, that reliance could be scary. I spent millions of dollars on Facebook and Instagram this year, and it is less productive this year than it was last year.”
Thus, Eos is in the early stages of researching other Amazon ad opportunities including OTT video, like it has done with Hulu and Roku, and inner and outer box wrapping (which replace standard Amazon materials, like those with Amazon Prime branding) as a form of out-of-home advertising. Inner and outer box wrapping, while compelling, costs top dollar. Power estimated that this costs somewhere between $3 to $4 a box, and at a minimum of 100,000 boxes, it would add up to single-digit millions for a brand to participate.
“Amazon is a customer and marketing platform in one, which is why we are considering a higher investment in Amazon marketing despite our sales volume,” said Kang. “It provides brand marketing and performance marketing in one.”
Shaban said OTT ads and packaging marketing are not quite yet in the cards for Virtue Labs; though it is exploring how-to tutorial video ads to tell its patented-technology innovation story and how that can repair a customer’s hair.
Creative advertising opportunities will likely be a draw for bigger beauty companies like Maybelline and Calvin Klein perfume, now that Amazon announced the end of its product sampling program last month.
However, Ghiorso said Amazon requires a simpler execution strategy that some beauty brands don’t yet understand.
“It’s about blocking and tackling,” he said.”Some things are worth looking into when it comes to storytelling and incorporating video because a 15-second video is better than a thumbnail in beauty, but product search needs to be aggressive. Amazon has always been about science and math more than it has been about art, so content isn’t a brand’s best asset to play with here. It is utilizing Amazon for it what it is known for — it’s the most important website on the internet, not Google, not Sephora.”
"Beauty" - Google News
December 12, 2019 at 02:19AM
https://ift.tt/2EcIO4Q
Why beauty brands need to ‘block and tackle’ on Amazon - Glossy
"Beauty" - Google News
https://ift.tt/34EsyFy
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update
Bagikan Berita Ini
0 Response to "Why beauty brands need to ‘block and tackle’ on Amazon - Glossy"
Post a Comment