Earlier this month, research from Amazon Ads revealed that half of Aussie small-to-medium-sized businesses (SMBs) are using digital ad products to expand overseas and that, in spite of talk of a tightening ad market at the top end of town, more than a third of SMBs were looking to increase their ad budgets.
However, at the same time, 32 per cent of SMBs are not using advertising as a growth lever at all. Nearly half of those believe that advertising is simply too expensive. But one small business making advertising work is Origin Medical. What’s more, with retail media growing at a frightening pace, it’s giving small advertisers a chance to compete with the big boys — particularly in online settings.
A recent IAB report found that over the last 18 months, 37 per cent of retail media investors spent a significant amount of their media and marketing budget on retail media, up from 26 per cent in 2023.
“We operate in a very competitive market and the biggest challenge I see businesses like ours face is understanding how our advertising works. Knowing which audiences to engage, which search terms or tactics to use, all sounds very simple — but the number of times I’ve seen strange products appear because the wrong keywords were being used, is astonishing,” Jonathan Morgan, director at Origin Medical told B&T.
“This challenge is something that I’ve seen throughout my career and is the biggest hurdle that small businesses have to overcome to get the most from their advertising budget.”
For its part, Morgan said that Origin had increased its ad budget by 10 per cent compared to last year, having seen success on Amazon’s platform.
“We have a Total Advertising Cost of Sale (TaCOS) of 10 per cent, which is a metric that we align with as close as possible to understand how our products are received by the market, and then make adjustments accordingly,” he added.
For key sales events, Origin as much as triples its ad budget to maximise the opportunity. Crucially, however, it has not invested any extra time in its media buying or creative efforts.
“Pleasingly, the time spent on managing advertising remains the same (up to an hour per week) despite an increase in spend which is great as it lets us focus on other ways to grow our business. What this shows is that there is a significant audience of consumers that we are tapping into which gives me confidence in the future of our business and brand,” said Morgan.
“One of our most successful campaigns to date was our Sponsored Brands Video which was viewed nearly 200,000 times, achieved a ROAS of 7.25, generated 711 orders and 704 net-new customers to our brand. We’ve repeated this campaign in line with our rebranding and the results were even better with a ROAS of 9.53. Prime Day this year was also a standout bump in our ROI, especially as we tripled our advertising budget at the time and secured some excellent results including a 76 per cent increase in revenue,” he added.
Origin’s previous problems with advertising, and its more recent success, are not unique to the company. Kasey Jamison, head of endemic advertising, Amazon Ads, Australia and New Zealand, told B&T:
“From analysing the research it’s clear that many SMBs attribute business growth to their advertising strategies, achieving successes like domestic and international business expansion, and a heightened ability to drive awareness of a new product or broader customer awareness of their brand. This is certainly the case for sellers in our store — small businesses that advertise on Amazon have seen 26 per cent of their sales, on average, driven by Amazon Ads. In fact, the combined sales from SMBs continue to outpace Amazon’s own first-party sales.”
“Amazon Ads is an offering that brings a lot of value to the table, especially because it sits alongside Amazon’s store, which we use to make the majority of our sales,” added Morgan.
“Amazon Ads also helps us tap into new global audiences, like Singapore, whose markets operate quite differently than in Australia. In these cases, Amazon Ads has been able to smoothly adapt our keyword strategy to reach the right audiences when previously we’d have to do the whole process manually.”
