Marketing
06 May 2022
Product placement is coming to streaming platforms
Check out what streaming and social media platforms pitched advertisers at NewFronts.
Spot the M&Ms. (Photo courtesy of Amazon)
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Thanks to the magic of CGI, your brand could soon be edited into a streaming platform’s original programming.
Product placement was among the most-talked-about trends in presentations at the Interactive Advertising Bureau’s NewFronts this week. Similar to Upfronts for the TV industry, the event offers streaming and social media platforms a chance to pitch brands on their latest advertising offerings.
NewFronts featured a range of announcements around content and advertising. This included options for brands and retailers, including new options to bring visibility to products, and bringing shopping directly into the content.
Here’s a look at the ecommerce and creator-focused announcements from the weeklong event:
Amazon
Product placement in post? It’s coming to Amazon. The tech company’s NewFronts presentation included an intro to a Virtual Product Placement (VPP) open beta program that will enable products to be added via CGI to Prime Video and Amazon Freevee shows. Added to designated shots, the products will be added after filming is complete. Elsewhere, billboards and signs will be able to display different messages.
Amazon said VPP is already available on Amazon original shows like Reacher, Tom Clancy’s Jack Ryan, the Bosch franchise, Making the Cut, and Leverage: Redemption.
Amazon shared the example of a still from Bosch where M&Ms were added to a bowl.
“Virtual Product Placement is a game changer,” said Henrik Bastin, CEO of Fabel Entertainment and executive producer of Bosch: Legacy, in a statement shared by Amazon. “It creates the ability to film your series without thinking about all that is required with traditional placements during production. Instead, you can sit with the final cut and see where a product could be seamlessly and naturally integrated into the storytelling.”
In testing, a CPG brand reported a 6.9% increase in brand favorability and a 14.7% increase in purchase intent for their campaign, per Amazon.
fuboTV
The sports-focused streaming platform has additional targeting capabilities for brands. Dubbed “Follow the Audience,” this feature uses first-party data to create customized audience segments, which can in turn be used to target viewers. For instance, this could be used to reach football fans with specific ads, even if they aren’t watching football content.
“Not only can we target contextually and demographically, but we can also identify audiences based on viewership behavior and preferences to tailor campaigns to specific fans, no matter what type of content they’re watching,” said Diana Horowitz, SVP of advertising sales at fuboTV, in a statement.
Meta
The Facebook and Instagram parent put a focus on creators with its new offerings. It announced a change to payouts for Reels content on Facebook that will mean more money for some creators (Others will receive less). Additionally, it is creating a new initiative called Challenges on Facebook that is designed to incentivize content creation. It is also rolling out additional insight tools for Reels Play creators.
Peacock
NBCUniversal’s streaming service had a pair of new ad offerings to unfurl.
A new feature called a Frame Ad will feature a brand message in a border around a show that is playing on the platform. This could include interactive elements that make the ad shoppable. For brands, NBCUniversal also pointed out that it has access to first-party data and a partnership with quick commerce service Gopuff.
Product placement within a show is the focus of a second tool called the Peacock In-Scene Ad. Currently in exploratory mode, this will offer a custom solution for brands to identify the right moments in shows to deliver personalized messaging for a viewer. Then, Peacock will integrate a brand’s product into the show in post-production.
"The majority of Peacock customers are opting for our ad-supported experience and we remain focused on collaborating with our brand partners to develop innovative, personalized ad experiences that continue to enhance the customer experience,” said John Jelley, Peacock Senior VP of product and user experience, in a statement.
Roku
Social media is getting more shoppable. Roku offered a look at how streaming services are adding the ability to browse and buy products, too. The platform now has original content. With that comes advertising. Roku said it will be adding a new program for retailers that pairs shoppable ads with its Roku Pay. This is designed to allow products to be sold directly from ads.
Additionally, Roku is partnering with Microsoft to explore how TV advertising, both linear and streaming, impacts search.
Snap
The celebrity endorsement just got easier. The Snap x Cameo Advertiser Program offers brands that advertise on Snapchat access to the 45,000 actors, athletes, musicians, reality stars and influencers in Cameo’s talent pool for custom video ads. Brands also get access to ideation and editing services, as well as other benefits. Already, Mattress Firm, 37Games, Kraft, and Molson Coors have used the program.
TIkTok
TikTok’s latest advertising product is allowing brands to appear next to the platform’s most popular videos.
Called TikTok Pulse, the contextual service is offering space for brands among the top 4% of videos. They will appear in the For You Feed, the algorithm-powered feature that curates and recommends TikToks specific to a user's interests. Initially, this capability is being offered in 12 categories, including beauty, fashion, cooking and gaming. To ensure brands appear next to content they deem appropriate, TikTok is also applying an inventory filter and making third party tools available for suitability and viewability verification.
Alongside providing access for brands, TikTok is also testing a revenue share for creators. Initially, those with more than 100,000 followers will be eligible.
Twitch
On Amazon-owned Twitch, a new program called For Twitch, With Twitch is set to curate creator-driven content for brands. Another feature called Co-Op Drops offers brands a chance to integrate themselves into in-game rewards offered during video game livestreams.
Alongside a host of new content partnerships and plenty of chatter about Elon Musk's impending takeover, Twitter announced a pilot program that is focused on highlights of big global events. Advertisers will be able to promote and run pre-roll on live event pages where the highlights will be shown. This will make content appear in a user’s timeline, as well as place it prominently in the Explore tab, Twitter said.
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Operations
31 May
5 strategies for optimal inventory management on Amazon
Accurate inventory is now essential for Amazon FBA sellers, writes Emplicit's Evan Sherman.
Amazon used to be a lot more laissez faire about how Fulfilled By Amazon (FBA) sellers used their fulfillment centers. Sellers could send in inventory, and, while the space wasn’t unlimited, if their sales were not as forecasted they would simply pay long-term storage fees. Sure, if a seller’s inventory management was poor enough they would have their inventory storage limits reduced and pay higher storage fees, but this was just an incentive not to let things slide too much.
However, in 2022 Amazon reduced storage limits overall to the point where some FBA sellers had sales and catalog size impacted, and in March 2023 Amazon revised their inventory system. There is now an incentive for FBA sellers to be highly accurate with inventory management because Amazon will reward them with increased storage limits. Precision is a carrot now, rather than a stick.
In this article, we provide five strategic methods that sellers can utilize to optimize inventory management on Amazon.
1. Leverage data to anticipate demand, and regularly monitor and adapt
Achieving successful inventory management on Amazon requires a profound understanding of past demand patterns and the capacity to accurately forecast future demand. Seasonality, market trends, historical sales figures, competitor activity and planned promotions all play a crucial role in determining the trajectory of sales.
At Emplicit, we advocate for the analysis of multiple historical data points, encompassing previous 7, 30, 60, and 90-day sales figures. Our logistics experts factor in internal factors such as stock availability, marketing spend, promotions, and sales and margin targets, and external factors such as seasonality, Amazon trends, new category restrictions and market entrants. A comprehensive review of shipments in working, shipped, or receiving status is also beneficial. Striking a balance between what has been sold, what is available, and what's en route to an Amazon fulfillment center is key to precise forecasting.
Inventory management isn’t a static task; it requires constant vigilance and flexibility. FBA sellers should regularly review and modify their demand forecasts, adjust their replenishment suggestions based on demand shifts, and update their minimum reorder points as required.
Sellers should review sales daily, plan replenishment frequencies to suit their needs, and maintain appropriate inventory levels at Amazon. Weekly replenishments can help keep a seller’s inbound pipeline full, minimize out-of-stock instances, and account for unforeseen supply chain disruptions.
2. Prioritize items based on sales and profitability
Amazon’s organic and paid algorithms prioritize products with high sell-through rates. This means best selling products end up selling better. Focusing on high-performing items allows FBA sellers to reduce monthly storage costs, avoid aged inventory and the associated fees that Amazon imposes, and curtail the need for costly removal orders. And sales velocity is the quickest way to get Amazon to increase your storage limits. Concentrate on the 20% of items that generate 80% of sales.
At the same time, sellers should prune their catalogs by removing slow-selling items. These items negatively affect Amazon’s Inventory Performance Index (IPI) score, which directly influences the space Amazon allocates to a seller’s inventory in their fulfillment centers.
If sellers are tight on inventory space, as well as the best-selling products, they should prioritize products with higher margins until Amazon provides additional storage, and they should reduce marketing spend accordingly – something which necessitates a close relationship between inventory and marketing.
Ranking products by sales and margins, and calculating the storage space each product takes up will go a long way towards understanding and anticipating demand on Amazon.
3. Capitalize on Amazon's capacity monitor for space management
Amazon’s capacity management system is a new system for allocating inventory limits to FBA sellers and allowing sellers to gauge their inventory capacity at Amazon’s fulfillment centers. It also enables sellers to bid on increases to their inventory limits.
Previously, Amazon had restock limits which were updated weekly based on the seller’s previous 90-day sales. Restock limits were determined by Inventory Performance Index (IPI) metrics such as sell-through, excess inventory, and stranded inventory. However, because the restock limits were updated weekly, it was challenging to plan accordingly, especially heading into a peak season or if a seller was about to run a promotion.
With Amazon’s Capacity Monitor program, sellers are given a monthly capacity outlook based on the cubic feet of space occupied by their products in Amazon’s fulfillment centers and their IPI metrics. Amazon not only provides a current month outlook on available space; they provide an estimate for the next three months which can aid in the inventory planning process.
To take advantage of the new system, it’s imperative FBA sellers understand their product's physical footprint in relation to the allotted space Amazon provides (Amazon does still provide unit estimates). Knowing a product’s cubic feet and the product tier designation allows for effective planning of inventory replenishment. Exceeding space limits means overage fees from Amazon, however, if a seller knows they have a peak in sales coming up they can bid for additional capacity (in cubic feet). However, selling-through this additional inventory means Amazon waives those fees, so it’s a win-win.
At Emplicit, we have seen the capacity monitor program benefit our clients, with many clients seeing an increase in the amount of inventory they can ship in – likely due to healthy sell-through velocity and other IPI metrics. The program has fundamentally changed the way we approach managing our inventory on Amazon, so everything sellers do regarding inventory planning should be within the context of Amazon’s capacity monitor program.
4. Consider Amazon-specific packaging
Smart sellers should already be considering the impact of their product packaging on their FBA fulfillment fees. If the actual product size allows, sellers can generate significant savings by reducing the size of their packaging. Amazon’s Small Standard rates are 15-20% cheaper than Large Standard rates depending on weight, and Amazon’s Small & Light rates are 15-27% cheaper still than Small Standard rates. However, fulfillment cost savings are not the only reason to reduce packaging size, smaller packaging can significantly increase Amazon inventory cost-efficiencies.
With Amazon’s capacity management system providing inventory space based on cubic feet rather than number of units, the space each product takes up is now more important than ever. While larger packaging sizes can sometimes improve sales in brick and mortar retail, sellers should consider developing smaller Amazon-only packaging. This will not only reduce fulfillment costs, but allow more units to be stored in the same inventory space. The combined savings can more than offset the cost of a redesign and second packaging print run.
Additionally, smaller packaging may qualify sellers for Amazon’s Compact By Design badge. This helps brands stand out, and increases click-throughs and conversions. (We suspect there are algorithm tweaks for brands with certain badges too, but it’s difficult to prove.) Amazon-specific packaging can help with Transparency (anti-counterfeiters) and help combat unauthorized resellers.
While it might seem like a significant investment and not something the inventory team typically gets involved with, reducing packaging size is a long-term way for FBA sellers to optimize inventory management.
5. Ship from China straight into FBA with Amazon Global Logistics
Amazon Global Logistics (AGL) offers a streamlined solution for sellers whose products are manufactured in China. AGL eliminates the need to use freight forwarders who would usually receive a shipment from China, then split up that shipment and forward on to multiple Amazon fulfillment centers per the standard FBA process. Instead, sellers can book shipments directly with Amazon, complete the necessary export/import documentation, and ship directly to US, UK or European fulfillment centers – sending the entire shipment to a single fulfillment center.
If leveraged properly, AGL can save sellers thousands of dollars in warehouse and 3PL fees and reduce the need for inventory to be processed multiple times before it arrives at Amazon’s fulfillment center, meaning inventory gets where it needs to be quicker.
AGL offers two shipping options – Standard Ocean Freight and Fast Ocean Freight – with the standard option giving sellers the opportunity to either ship via a full container load (FCL) or less than container load (LCL). Shipping partial container loads with Amazon doesn’t slow shipments down versus other carriers because of Amazon’s scale. Amazon’s economies of scale mean that AGL can offer shipping prices from mainland China and Hong Kong that most sellers are unable to match. And Amazon’s expert customs brokers get products cleared through customs quickly because Amazon has a vested interest in shortening the time to market.
This one-step international shipping direct to Amazon was actually something we pioneered before the advent of this service from AGL – working with our client Shapermint and their manufacturers in China and logistics team to ensure packaging and shipments were FBA compliant. However, now AGL offers this service, it’s an even easier solution to a common challenge. We suspect AGL will roll out in other international manufacturing markets, but Amazon is tight-lipped for now.
The importance of expert inventory management
Amazon inventory management is complex and needs constant attention. Sellers can hire a fractional inventory specialist because this is not something that should be trusted to an Amazon generalist. If sellers get inventory right, it will keep pace with sales. But if they get it wrong, their inventory can become the main thing holding them back.
Evan Sherman is the director of logistics at Emplicit.
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