Amazon Prime Day 2023: Record-Breaking Ad Spending Boosts Sales by 486%

Once again, Amazon Prime Day was a boon for brands advertising online as they looked to convert the influx of deal-seeking, ready-to-spend shoppers into actual customers.

Coming off of a year when both those brands and their potential customers may have been exercising caution in the face of rising inflation, a more favorable economy appears to have opened the floodgates for the annual sales event.

Methodology: The following analysis is based on Amazon Marketing Services spending hosted on the Skai platform. For year-over-year analysis, only named Skai accounts with spending across Prime Day and the 30 days running up to Prime Day in both years are included. All other analysis includes all accounts.

Advertisers bet big on Prime Day 2023—and were rewarded

Over the two days of the Prime Day 2023 event—July 11 and July 12—ad spending increased by 409% (5.1X) over the average of the previous 30 days. By comparison, spending increased last year by 300% (4.0X).

Spending increases occur when at least one of two things happens: Shoppers are clicking on more ads, and/or those ads cost more to advertisers. In the case of Prime Day, it’s definitely a combination of the two. Clicks rose 226% (3.3X), while CPC increased 58% (1.6X). Both of these increases were greater than last year (167% and 50%, respectively).

Year-over-year (YoY), Prime Day spending rose 65% over 2022 levels, although it should be noted that the 30 days before Prime Day this year were already up 30% over the same period last year. So it’s perhaps more accurate to say that Prime Day contributed to just over half of the YoY spending growth.

The average CPC for 2023 was up 22% YoY for the two days of the event and 14% for the 30 days leading up to it. It should be noted that last year, YoY CPC was down, which in hindsight, looks like a reflection of the economic uncertainty that was beginning to unfold around gas prices and inflation.

The growth is more robust than last year when we look at the resulting sales from this increased ad spending. Simply put, consumers bought more stuff.

The average size of a shopping cart grew 76%, from $36 on average for the 30 days before Prime Day to $61. This results in ad-attributed sales revenue growing by 486% (5.9X) compared to the previous 30 days, and with revenue growing faster than ad spending, that means that, even with all of the additional volume, Return on Ad Spend (ROAS) grew 14%.

As with spending, when we look at YoY changes, we get a “floor” of +19% for the pre-Prime Day period, then another 20% for Prime Day itself, bringing the total YoY growth for the two days to +39%.

As with previous Prime Day events, the top categories in terms of ad spending and ad-attributed sales were Beauty & Personal Care, Computers & Consumer Electronics, and Home & Garden. The tech category saw a massive increase in sales dollars of +1114% (12.1X), mostly due to the average order value doubling from the average of the previous 30 days.

Several categories, such as Apparel, Family & Community (which includes baby products), Hobbies & Leisure, and Food & Groceries saw spending increase more than sales, which means ROAS would have been lower for Prime Day than for the period immediately before.

This doesn’t mean Prime Day wasn’t a success in those categories, as customer acquisition can be its own reward, even if the cost of that acquisition is higher for the event.

Ultimately, Prime Day continues to demonstrate major value for brands as they grew their customer base and move products at an accelerated rate, sometimes at a higher return on their advertising dollar. And the data suggest that In a year where overall shopping behavior is picking up as the economy improves, that acceleration itself has picked up steam.

The State of Retail Media 2023 provides a valuable snapshot of the current thinking and challenges that are on the minds of today’s marketing decision-makers.
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Skai helps you maximize Prime Day and beyond

Skai’s Retail Media solution empowers marketers to plan, execute, and measure digital campaigns that meet consumers when and where they shop. As part of our omnichannel platform, connect the walled gardens and manage campaigns on 100+ retailers, including Amazon, Walmart, Target, and Instacart, alongside major publishers across paid search, paid social, and apps. Client results include:

• 461% increase in Amazon Ads ROAS and 57% increase in page traffic for Bondi Sands
• 92% increase in share of voice on Amazon for a Fortune 500 CPG brand
• 72% increase in revenue for VTech
• 1,390% year-over-year sales growth for Kamado Joe

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