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3 key reports to manage Amazon ads for profitability

Frederic CLEMENT
January 23, 2024
20
min read
Amazon ads ROI

As ad costs rise and budgets tighten, it’s more important than ever to connect media spend with sales data to maximize Amazon advertising ROI. With its significant market share in digital advertising, Amazon Ads is a pillar of numerous retail media strategies. But getting the most out of your spend requires harnessing the wealth of sales and advertising performance data available from Amazon’s Selling Partner API (SP-API).

In this post, we’ll explore 3 critical Amazon reports that provide the insights you need to optimize listings, campaigns, budgets, and bids to drive sales.

Why mimbi connects Amazon ads with orders data

Taken together, these reports illuminate the end-to-end customer journey from discovery to purchase to the post-sales experience. By aligning listings, inventory, logistics, and ads to this purchase behavior data, brands can create a seamless, frictionless buying experience.

mimbi : breaking data silos

A comprehensive view across these reports is essential for successful retail media advertising, enabling brands to connect product (when integrating product catalogs) and service improvements to media spend for superior ROI.

Let’s dive into the Amazon reports that make it all possible!

Brand analytics reports

The Brand Analytics reports provide actionable data to brands on Amazon about customer search behavior, buying patterns, and loyalty so they can make data-driven decisions to optimize their product listings, advertising, and customer retention strategies. The reports give brands valuable insights into both new customer acquisition and existing customer retention on Amazon, which enable them to:

  • Analyze market basket behavior to see what products customers frequently purchase together with their products, as well as the percentage of times those products are purchased together.
  • Identify top search terms that resulted in clicks and conversions for their products. This enables brands to optimize their Amazon product listings and advertising campaigns around the highest value search terms.
  • Track repeat purchase metrics to see their loyal customer base and revenue driven by repeat purchases. This helps brands quantify brand loyalty and focus retention marketing efforts on their best customers.

Inventory reports

The inventory reports provide actionable intelligence for brands to optimize their Amazon product catalog, resolve listing issues, accurately forecast costs and sales.

  • Get a complete snapshot of their product catalog including live listings, inactive listings, and canceled listings. This enables brands to audit their catalog and ensure listings accuracy.
  • Review listing details like price, quantity, SKU information to optimize their listings for greater visibility and higher sales.
  • Preview referral fees for new products to accurately calculate margins and potential ROI.
  • Monitor FBA inventory levels and storage limits to avoid overstocking or understocking products. This helps brands match supply to demand.

Returns reports

The returns reports provide actionable data for brands to understand reasons for returns, identify product or listing issues driving returns, optimize reverse logistics, and detect potential abuse — enabling lower return rates and costs.

  • Analyze return rates by SKU to pinpoint problematic products. Brands can then troubleshoot or discontinue high return rate SKUs.
  • Identify top reasons for returns to understand product quality or listing content issues. This enables brands to proactively improve products and listing details to reduce returns.
  • Separate Prime vs non-Prime returns to understand how premium customers perceive product quality. This provides insights to focus improvements.

As an example, we evaluated a product that was originally high quality but was replaced with a lower quality version to reduce the price and try to increase sales volume.

Taking into account the Return rates by SKU was a game changer in the ROI/ ROAS calculation. Although the new lower priced product did sell more units, the return rate increased significantly which lowered the net sales revenue.

Consequently, the return on ad spend (ROAS) for the lower quality product was less than for the original higher quality product.

ROAS calculation taking into account COGS & return rates

More than ever, brands need to break down data silos

As we’ve explored, these three critical Amazon reports — Brand Analytics, Inventory, and Returns — provide tremendous insights into customer behavior throughout the purchasing journey. But deriving value from siloed datasets has limitations. To fully optimize retail media and connect ads to sales, brands need to break down data silos and achieve a unified view of their ecommerce activities.

This requires importing key Amazon data sets into a central data warehouse and harmonizing with first-party sales, product catalog, and advertising data (more about retail media data collection). With a unified data foundation, brands can run cross-channel analytics to uncover strategic insights that would be impossible within channel-specific reports.

Data harmonization enables brands to connect the dots between ads served, product details, inventory availability, pricing, customer loyalty, returns, and more. By tying all these data points together, they can identify precise levers to increase sales and margin through retail media.

The more unified your data, the more strategic your Amazon advertising. Use data harmonization to transform retail media analytics into a core competitive advantage.

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