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19 July 2021
Why e-commerce marketers must look beyond ROI
E-commerce & mobile retailDigital media planning & buying
Traditional metrics like return on investment (ROI) and return on advertising spend (ROAS) may no longer be sufficient to determine the success of campaigns, as retail and e-commerce marketers have to consider factors beyond their normal sphere of influence.
Why it matters
Supply chain data has become “an unavoidable metric for e-commerce marketers”, AdExchanger states, as an advertising campaign has a much wider impact than just the sales figures, now potentially affecting everything from product development and manufacturing to shipping and fulfillment.
Many consumer packaged goods (CPG) manufacturers are accustomed to shipping pallets containing multiple items to retailers – they’re not geared for one-off sales and deliveries direct to consumers.
CPG marketers can sell through Amazon, but need to manage a brand’s Inventory Performance Index (IPI) score – which determines where their product appears in organic search results and how much warehouse space is allocated to it.
As Amazon places more weight on IPI scores, that has a knock-on effect on how brands can use the platform’s advertising services.
Amazon will direct ad inventory to those brands that have a high IPI rating, says AdExchanger.
The big idea
Amazon is no longer just about ‘pay and play’ as the growing emphasis on IPI requires brands to improve their manufacturing and fulfillment supply chains.