Introduction
Coop Home Goods, a leading seller of high-quality bedding products on Amazon, faced the challenge of elevating brand visibility and driving sales in a highly competitive market.
In response, the company embarked on a strategic Amazon Demand Side Platform (DSP) advertising campaign. This case study explores the relationship between DSP advertising spend and its impact on brand awareness, as measured by branded searches, and the subsequent increase in revenue, employing linear regression models to quantify these effects.
Methodology
Using data collected from March 2023 to February 2024, we conducted a detailed analysis to understand the impact of DSP spend on brand awareness and revenue.
Two linear regression models were developed:
one to explore the relationship between advertising spend and branded searches, and another to examine the impact of spend on revenue.
1. Branded Searches:
Representing brand awareness, the number of branded searches on Amazon serves as a direct indicator of consumer interest and recognition.
2. Revenue:
Measured by total sales in USD, providing a clear picture of the financial outcomes resulting from advertising efforts.
Findings
Impact on Brand Awareness
The analysis revealed a strong positive correlation (r ≈ 0.82) between DSP spend and branded searches, indicating a significant lift in brand awareness with increased advertising investment.
The linear regression model showed that for every dollar spent on DSP advertising, branded searches increased by approximately 0.067. This model predicts that a hypothetical $15,000 spend would result in around 1,283 branded searches, highlighting the effectiveness of DSP ads in boosting brand visibility.
Impact on revenue
Further analysis quantified the relationship between DSP spend and revenue, demonstrating an impressive return on investment.
For every additional dollar spent on advertising, revenue increased by approximately $10.73. Based on our model, a $15,000 advertising investment is predicted to generate an estimated $158,513 in revenue.
This substantial increase underscores the direct financial benefits of strategic DSP advertising.
Conclusion
The strategic use of Amazon DSP advertising by Coop Home Goods has significantly enhanced brand awareness and driven revenue growth. The data-backed analysis, utilizing linear regression models, provides compelling evidence of the effectiveness of targeted advertising spend.
A $15,000 investment in DSP ads not only predicted a substantial lift in branded searches by approximately 1,283 but also a remarkable increase in revenue to an estimated $158,513.
The strategic use of Amazon DSP advertising by Coop Home Goods has significantly enhanced brand awareness and driven revenue growth. The data-backed analysis, utilizing linear regression models, provides compelling evidence of the effectiveness of targeted advertising spend.
Future Directions
Building on this success, Coop Home Goods plans to further refine its advertising strategy, exploring new targeting options and seasonal campaigns to maximize brand visibility and revenue growth.
The insights gained through this analysis will inform future marketing efforts, enabling Coop Home Goods to maintain its competitive edge and foster long-term customer engagement.
