How AI & AMC Drove 22% New Product Growth Without Cannibalization

Key Summary This case study highlights how Amazon Ads partners leveraged AI-powered optimization and Amazon Marketing Cloud (AMC) to successfully launch a new product, achieving a 22% increase in overall sales without cannibalizing existing product lines.

Details of This Case Food brand Bumble Bee Foods launched 'Snackers,' a new single-serve tuna product aimed at younger consumers. They faced the complex challenge of growing overall revenue without cannibalizing sales from their 10+ existing product lines already well-established on the Amazon store.

To tackle this challenge, CA Fortune, a full-service advertising and CPG (Consumer Packaged Goods) retail operations specialist partner, collaborated with Xnurta, an AI-powered optimization and advanced measurement expert. By combining Xnurta's AI-driven optimization with the audience capabilities of Amazon Marketing Cloud (AMC), they achieved $30 million in Snackers sales within nine months, exceeding their target of $24.5 million by 22%.

Key achievements include: Sales Growth: Achieved $30 million in sales, exceeding the $24.5 million target by 22% through AI optimization. Ad Efficiency: Achieved a TACOS (Total Advertising Cost of Sales) of 5.51% against a 10% target, thanks to AI-powered bidding. Customer Loyalty: Achieved a repeat purchase rate of 12.5% (exceeding the 10% target). Notably, New-to-Brand customers acquired through AMC custom audiences showed a 22% repeat purchase rate. Key Insight: AMC's cross-product association modeling confirmed zero cannibalization of existing product sales. Snackers buyers were adding the new product to their carts rather than replacing existing ones.

This campaign, utilizing solutions like Amazon Marketing Cloud (AMC), Sponsored Products, and Amazon DSP, presented a repeatable methodology for successfully launching new products within a complex product portfolio and generating incremental sales.

How Sellers Can Apply This 1. Develop Keyword/Targeting Strategies for New Product Launches: It's crucial to identify unique keywords and use cases to ensure your new product doesn't overlap with existing product lines. In the Bumble Bee Foods case, they used keywords that clearly highlighted the new product's features, such as 'single-serve' and 'on-the-go snacking.' Action: Research keywords that emphasize your new product's unique selling points and apply them to your Sponsored Products and Sponsored Brands campaigns. For keywords similar to existing products but unsuitable for the new one, set them as Negative Keywords to prevent cannibalization. Path: Amazon Ads console Campaign Manager Create/Edit Campaign Keyword Targeting or Negative Keywords tab.

2. Leverage AI-Powered Bidding and Customer Segmentation: Bumble Bee Foods identified high-probability conversion customers and built custom audiences through AI-powered optimization and AMC. While direct access to AMC may be challenging for all sellers, you can still utilize AI-powered features within the Amazon Ads console. Action: Actively use Amazon Ads' Dynamic Bids strategy to allow AI to optimize bids in real-time. Additionally, you can run Retargeting campaigns via Amazon DSP or target New-to-Brand metrics to drive incremental sales. Consistently monitor repeat purchase rates and New-to-Brand metrics to focus on increasing customer loyalty. Path: Amazon Ads console Campaign Manager Campaign Settings Bidding Strategy. Amazon DSP requires separate access. Metrics to Watch: TACOS, New-to-Brand sales/orders, Repeat Purchase Rate.

3. Implement a Comprehensive Full-Funnel Advertising Strategy: It's crucial to maximize exposure across the entire customer journey, from awareness to conversion, by combining various ad products. Bumble Bee Foods utilized Sponsored Products, Sponsored Brands, Display Ads, Amazon DSP, and Prime Video. Action: Drive conversions with Sponsored Products, and boost brand awareness with Sponsored Brands and Sponsored Brands Video. Use Sponsored Display to remarket to customers browsing related products, or expand your reach beyond Amazon channels via Amazon DSP to discover potential customers. Evaluate all ad spend from an incrementality perspective to ensure it contributes to new customer acquisition and repeat purchases. Path: Amazon Ads console Create Campaign Select Ad Product. Metrics to Watch: Impressions, Click-Through Rate (CTR), Conversion Rate, Return on Ad Spend (ROAS).

Things to Note 💡 Amazon Marketing Cloud (AMC) and Amazon DSP are not currently direct-access features for all sellers and can typically be accessed through Amazon Ads partners or your Amazon account representative. However, AI-powered bidding strategies and New-to-Brand metrics are directly available within the Amazon Ads console.

📰 Source: https://advertising.amazon.com/library/case-studies/xnurta-ca-fortune-bumble-bee-foods