Amazon PPC

Behind the Benchmarks: Amazon PPC

Quartile broke out analysis for sellers—businesses that sell to customers through the Amazon marketplace—and vendors—manufacturers or distributors who sell directly to Amazon at a wholesale price. The performance metrics for these groups varies, so we hope this will provide a clearer picture of how different kinds of advertisers are performing on Amazon.

Notably, CPC for sellers declined -4% year over year, contributing to a 12% increase in ROAS. For vendors, CPCs increased 9%, but because both conversion rates and AOV tend to be higher for Amazon PPC vendors, ROAS also increased 11% year over year. New this year, Quartile analyzed total advertising cost of sales (TACoS)—a metric that indicates how much sales (organic and ad sales) a seller earns relative to ad spend—reflecting that paid advertising on Amazon improves both ad sales and organic sales.

Amazon DSP

Behind the Benchmarks: Amazon DSP

Amazon DSP, which delivers display ads across Amazon’s websites and external media sites, was the top advertising channels when it came ROAS growth year over year, up 26% since 2022. That was helped by one of the most significant declines in CPC, down 17% year over year.

Another key driver of this channel’s success is its high average conversion rates, which contributed to its success during the holiday shopping season in November and December. High returns during the holiday were boosted by relatively small increases in cost per acquisition (CPA). In a crowded and highly competitive shopping season, Amazon DSP is particularly attractive to lock in high-converting holiday shoppers.

Google

Behind the Benchmarks: Google

Combining results from Google Search, Google Shopping, and Google Performance metrics, Quartile saw relatively stable CPCs on Google throughout 2023, increasing just 1% year over year. This stability, paired with consistently high AOV helped sellers maximize returns on Google, averaging 9.20 a 22% increase over 2023.

Shoppers on Google are among the most engaged, averaging a clickthrough rate (CTR) of 1.46% and a conversion rate of 11.49%, both of which increased 11% and 29% year over year, respectively. This may be in part due to the maturity of the platform and the significant investment Google has made in its automation tools. Features like Performance Max Campaigns leverage machine learning to enhance campaign performance over time.

Client Case Study

DTLR is a premier urban lifestyle retailer that offers a diverse selection of footwear and apparel while fusing passion for fashion, entertainment, sports, and community empowerment.

Amid heightened competition during Cyber 5 2023, DTLR achieved remarkable results, increasing revenue volume by 44% while reducing CPCs by 17% YoY. This success was driven by enhanced campaign segmentation and strategic budget allocation. By improving campaign structure, DTLR realized a notable 37% improvement in ROAS performance by maximizing ad spend for top-performing Brands at a greater efficiency.

Walmart

Behind the Benchmarks: Walmart

Walmart is the newest channel tracked in Quartile’s annual benchmark report. It continues to mature as an advertising channel with indications of growing competition. CPC increase 12% for Walmart advertisers, although the cost remains quite low compared to other channels, averaging $0.46 CPC. Conversion rates are quite high on Walmart, averaging 16.8%, but consumer spend on this channel is relatively low with AOV at $11.08.

That trend seems to be shifting as ad sales ticked up significantly on Walmart throughout 2023, increasing nearly 1.5X from the first half to the second half of 2023. As sellers increasingly invest in this channel, it will be interesting to see how much they can improve their efficiency and boost returns.

Bing

Behind the Benchmarks: Bing

Like Google, Quartile has combined performance for Bing Search and Bing Shopping campaigns. Bing earned the second highest AOV of all platforms tracked in this report, averaging $138.98. Despite this, ROAS declined year over year, as CPC increased 18% on the platform.

While Bing attracts a lower volume of impressions and conversions, when compared to rival search platform Google, it’s still worth testing ads on this channel. Particularly in its peak sales months of January and March, Bing may be an attractive platform to advertise for sellers looking to expand their reach to new customers.

Meta

Behind the Benchmarks: Meta

Meta, which includes Facebook and Instagram advertising platforms, experienced significant growth in 2023. ROAS increased 9% year over year, averaging 10.26. That is the highest average ROAS of any channel tracked in this report. Driving that success was a significant decline in CPC, down -24% year over year and a high average order value of $154.29.

The CPC decline may indicate that Meta is becoming a less competitive platform as new social commerce channels like TikTok emerge. That decreased competition could create new opportunities for sellers as Meta remains a lucrative channel where high-value shoppers are discovering their next purchases.

Instacart

Behind the Benchmarks: Instacart

Instacart, like marketplace platform Walmart, had relatively low average ROAS in 2023 at 3.77, despite incredibly high conversion rates. Part of that low return may be due the channel’s high average CPC of $1.16. Although sellers were able to sell more on Instacart compared to Walmart in 2023, the advertising cost was significantly higher.

As Instacart matures as an advertising platform and introduces greater targeting and automation features, sellers may be able to drive down these costs and recognize greater returns in the year ahead.