How do you bring a long-standing publication to the Amazon Marketplace? Better yet – how do you increase total sales 742% on the Amazon Marketplace (in less than two months)?
Oh, and did we mention this all happened during COVID-19 – as a worldwide pandemic launched us into economic uncertainty?
It sounds like an impossible task but not for Jay Gaughan, Sr. Director, Marketing at Highlights for Children, Inc. who teamed up with Tinuiti in September 2019 to scale advertising efforts and sales opportunities on Amazon.
The History of Highlights
The flagship magazine was founded in 1946 by Garry Cleveland Myers and Caroline Clark Myers, when the couple decided to create a monthly magazine for children in Honesdale, Pennsylvania. They filled it with stories, adventures, brainteasers, and Hidden Pictures® puzzles.
Since then, the Highlights brand has grown to a diverse and inclusive family of products made for children from babies to age 12 including games, websites, mobile apps, and the subscription clubs Let’s Grow™, LET’S PLAY Hidden Pictures, EAGLE-EYE Hidden Pictures, Mathmania™, Puzzlemania®, Puzzle Buzz™ , Top Secret Adventures™ and Which Way USA™. Highlights International’s products are now available in 40 countries and in more than 16 different languages.
In the following Q&A, we ask Gaughan why Highlights for Children decided to partner with Tinuiti and how the company has been able to scale their business on Amazon so quickly (despite COVID-19).
Q. Why did Highlights for Children decide to partner with Tinuiti?
Gaughan: We saw an article about Tinuiti in the Wall Street Journal and we realized our Amazon business could be a lot more successful. One of the reasons we really liked Tinuiti was because they understood our complex business structure on Amazon. A lot of companies either sell to Amazon directly or they list their products through the Seller Central portal. We actually do both. Additionally, we also manage our magazine business through a division called “Amazon Newsstand” and our monthly subscription boxes through a program called “Amazon Subscription Boxes”.
We knew we needed to work with experts who not only knew the Amazon ecosystem but could also understand the various ways we interface with Amazon and how each of those divisions interplay. Basically, we had a very complex business structure that we needed to make better sense of.
Q. Let’s talk about Q4 2019. What specific strategies led to Highlights’ success?
Gaughan: Prior to working with Tinuiti we were running minimal advertising on our own. When we signed our contract in September, we challenged Tinuiti’s team to help us ramp up our catalog for holiday sales. As a result, Q4 was a tremendous success for us. We not only saw increases in ad volume but also a 60% increase in efficiency. We were able to scale without sacrificing profit. By January we normally return to a slower period in sales, but by the time March and April 2020 came around – we beat our own sales records by a landslide.
How Highlights for Children Increased Sales By 742%
“Highlights For Children has been an ideal client from the start. They put their faith in us and allowed us to implement our best practices, while also testing out new ideas and the results have been phenomenal.”
– Anthony Artuso, Specialist, Marketplace Search at Tinuiti
“We’ve expanded their catalog size across Seller Central and Ad Console, utilizing Sponsored Products (Automatic and Manual targeting), Sponsored Brands, and DSP. Along with this expansion, we applied an aggressive bidding methodology consisting of multiple updates per week through automated rules in CAPx and manual updates. We had seen steady growth since they came on in September and, by early April 2020, had already exceeded their total Amazon sales of 2019,” Artuso said.
Seller Central + Ad Console (Vendor Central)
Time period: (March 2020 – April 2020) vs. (January 2020 – February 2020)
- Clicks: +853%
- Ad Orders: +1,347%
- Ad Sales: +987%
- Total Sales: +742%
According to Artuso, Tinuiti noticed a spike in Highlights for Children’s conversion rate the week of March 1st, followed by another significant spike the week after.
“In response, we began to apply a more aggressive bidding strategy focusing on growing sales volume. They provided us with an aggressive ACoS target across Seller Central and the Ad Console. We then updated our bidding schedule. During this time we also began to increase the number of products we were advertising on both Seller Central and Ad Console and continued to harvest profitable search queries from our automatic targeting campaigns and imported to our corresponding manual targeting campaigns,” Artuso said.
After the initial success on Seller Central and Ad Console, Highlights decided to expand its advertising opportunities to Amazon DSP.
“We took a slow and steady approach to launch our DSP Orders. When we began our relationship, I laid out 3 different media plans that would target the full-funnel,” Tony Heuer, Senior Specialist, Programmatic at Tinuiti said.
“They decided which one best fit their business needs. From there we started to test different In-Market segments each month. Once we had the first month down, we were able to compare data sets. Once COVID hit, we were able to take the learnings from the first 4 months and decide which In-Market segments should continue. We’ve layered in new targeting options and well as new products. We’ve consistently hit their ROAS goals with our main product having an increase of over 700% in Sales YoY.”
Q. Highlights experienced significant success in Q4, but was there concern about the impact COVID-19 would have on the business in 2020?
Gaughan: I’m not sure if this has anything to do with the fact that we are based in Ohio and our Governor has been proactive about COVID-19 since the beginning, but I don’t think we were caught by surprise. My last trip for work to New York was in early March. Shortly after that, we pivoted our approach. Because we are a children’s company (and an educational product) we realized millions of students would be at home. There were a couple of weeks when we were scrambling but honestly, it always felt like we were ahead of the curve. Tinuiti has definitely helped to support us through the pandemic.
Q. Can you tell us how Tinuiti worked with Highlights to navigate a strategy during COVID-19?
Gaughan: It really helped to have a good partner working with us because our demand curve accelerated quickly. Tinuiti was able to react to the concerns we encountered along the way including the restriction of nonessential items to FBA. Because our inventory was restricted on Amazon, we had to ship our products out of our own warehouse. Thanks to Tinuiti’s help – that transition has been seamless.
Q. What’s top of mind for you today?
Gaughan: What’s top of mind for us today is how we can maximize this sales opportunity. Now more than ever, we are methodical about how we think through the future and holiday sales. We’ve already got some of our Prime Day Deals locked down. The other thing we are really excited about is the new campaign infrastructure that we’ve built with Tinuiti’s help.
The complexity of our ad campaigns are going to give us a leg up on the competition for the rest of the year. We’re riding the wave and following every opportunity to drive the business upward.
Q. Can you offer any tips for businesses that are struggling during the COVID-19 pandemic and uncertain of the future?
“Now more than ever – my recommendations to other businesses selling on Amazon is to pay very close attention, be agile, and don’t wait around if it looks like your business needs a change.”
Hopefully, if you are selling on Amazon you are already taking advantage of keyword research and expansion. I would also say right now is a time to take some risks. Continue to monitor the long term trends because the data is going to go up and down on a daily basis. Keep in mind, what you see on Monday could be entirely different by Friday so you do need to be paying attention. That’s why we have a weekly call with Anthony and Tony [our account managers at Tinuiti) and stay in contact (via email) daily so we get an accurate picture of what is happening.