CASE STUDY: Show me the money! A year in a marketplace Sponsored Product Ads Program
Sponsored Products ads are one of Amazon’s fastest growing source of revenue.
This is not really surprising.
When you are selling your products or brands in a crowded marketplace, the marketplace becomes your competitive arena and in order to win the in-store battle you need to make sure you appear better.
How do you do it? You buy better shelf space. You bid for placing your products in front of your potential buyers.
Well, you buy Sponsored Product ads.
But this is not only the case for Amazon.
Every big crowded marketplace can find Sponsored Product Ads a meaningful tool for generating incremental revenues and a must have tool for its sellers.
Here is one case study of a big marketplace using Mabaya’s sponsored product ads platform:
as you can see within one year (from May 2016 till today) the revenues generated by the store increased by 300% from less than $30K to more than $100K a month.
The products sales that are attributed to the sponsored product ads also jumped from $300K to more than $1M a month.
The average ACoS for the sellers did not surpass the 10% and the Average CPM was between $1-$2.
These results demonstrate the potential of Sponsored Product Ads for both sellers and marketplaces. If you are running a marketplace and want to know what kind of revenues you can generate from these ads you can use our calculator here.
Same purpose – Different customers – Different product
Offering and Running Sponsored Product ads programs are far from being a plug and play platform. Especially when it comes to marketplace sellers.
There is a big deference between on-boarding advertisers and sellers to a Sponsored Products Ads programs.
While advertisers and agencies are familiar with sophisticated bidding systems from their different online advertising activities, many of the sellers in the marketplace are less comfortable with this concept.
Therefor when offering sponsored product ad programs to sellers the marketplace should offer simpler automatic plans and packages as well as customized manual sophisticated campaigns.
The on-boarding procedure should also be different and very welcoming and intuitive for online sellers and in order to prevent churn you need to constantly stay in touch with them and encourage them to improve their campaigns.
This can be done by automatic email alerts and notifications that can help and encourage the sellers and by all kinds of educational methods.
Mabaya is running sponsored product ad platforms in several leading online retailers (focusing on marketplaces) around the world and developed tools and methods for on-boarding and retaining marketplace sellers.
If you want to hear more about our solution feel free to drop us an email or give us a call.
We will be at IRCE on June so if you are around we would love to meet you there.