New-to-Brand Metrics: How to Measure Customer Acquisition Cost on Amazon
In early 2019, Amazon Advertising launched new-to-brand metrics to help advertisers better measure and optimize their campaigns. The suite of metrics is designed to provide more insight into how profitable a brand's advertising dollars are. These metrics also allow brands to estimate how much it costs to acquire a new customer (customer acquisition cost, or CAC). We’re here to break down exactly what these metrics are, how they work, and how brands can use them to measure CAC on Amazon.
What are New-to-Brand Metrics?
Amazon continues to put useful tools into the hands of brands to help them better succeed on its platform. The ultimate goal of its new-to-brand metrics suite is to give brands better tools to grow their customer base.
Here is a diagram from Amazon to help illustrate how the metrics work:
New-to-brand metrics help brands determine whether an ad-attributed purchase was made by a repeat customer or a first-time buyer. Continue reading to learn more about how these metrics work and why they’re important.
More About New-to-Brand Metrics
Brands use these metrics to understand whether advertising dollars result in repeat or new customers. These metrics give access to total new-to-brand sales/purchases, new purchase rate, and cost per new customer.
Since these metrics were released, Amazon Advertising has continued to add to the offering. They’re now available to brands that choose display, video, and Sponsored Brand advertising options.
For now, these metrics aren’t tied to Sponsored Product Ads, but this could change as Amazon Advertising evolves.
Why are the New-to-Brand Metrics Important?
With visibility into how its advertising brings in new customers, brands can estimate its customer acquisition cost (CAC). The ability to measure CAC on Amazon is extremely valuable by allowing brands to better evaluate their advertising efforts and better allocate budgets.
Aside from making it possible to measure CAC on Amazon, new-to-brand metrics also make it clear which products are specifically most popular with repeat customers.
Lead Amazon Advertising Strategist Ashley Long and advertising strategists at Marketplace Strategy use new-to-brand metrics to show clients the impact of their advertising spend.
“Almost all of our clients are focused on driving net new customers on Amazon. We target non-brand keywords, categories, and competitive search terms/ASINs to get in from of shoppers that aren’t searching for the brand specifically. This helps our clients increase sales for what we can only assume to be new customers,” Ashley said, “However, that’s not a definitive way to ensure the shoppers we’re helping our clients reach are actually new to the brand. New-to-brand metrics are a more definitive way for us to show our clients the impact their ad dollars make in reaching new customer goals.”
Make sure your brand uses the new-to-brand metrics to make informed decisions. Use them to adjust strategies as needed. They provide a new level of insight to brands making advertising even more effective. If your brand needs advertisings support or could use a strategic partner, schedule a free consultation.
SIGN UP FOR OUR WEEKLY NEWSLETTER
News, Views, and Valuable Resources
Delivered to Your Inbox Each Week