Amazon — which is scheduled to release Q2 2020 earnings on Thursday — continues to perform well for advertisers despite reported slowdowns in ad spend due to COVID-19, according to data released Wednesday. 

Despite lower cost per clicks (CPCs) and budget uncertainties, return on advertising spend (ROAS) and budgets increased significantly in June, according to Pacvue, an enterprise platform for advertisers that combines performance data with recommended actions.

Amazon in June experienced a rebound in CPCs as online shopping remained steady and competitiveness across most categories increased. This followed a spike in February and March during a panic-buying phase as a result of the CDC announcing the pandemic, and then a drop in CPCs in the second quarter during April and May.

Pacvue’s study — Q2 2020 CPC Report: Amazon Ad Growth Through an Uncertain Market — is sourced from the company’s keyword database that tracks ASINs from advertisers. It aggregates data across all major product categories.

The report also includes monthly data to better display the effects of COVID-19 on Amazon advertising.

Despite budget uncertainties, average daily spend on the platform increased for both Sponsored Brand ads and Sponsored Product ads. 

The second quarter reduced a gap in CTRs for Sponsored Product ads and Sponsored Brand ads.

Sponsored Brand ads fell from 0.58% in first-quarter 2020 to 0.44% in second-quarter 2020. For Sponsored Product ads, the change was the opposite — CTRs rose from 0.35% to 0.41%. 

CTRs for Sponsored Product ads since have returned to the same level as a year ago in second-quarter 2019, and even higher than they were pre-COVID-19 in fourth-quarter 2019. However, there is a downward trend for CTR for Sponsored Brand ads.

The average CTR for Sponsored Brand ads during the last five quarters remain significantly higher than for Sponsored Products. The average CTR for Sponsored Brand ads was 0.53% compared to 0.38% for Sponsored Product ads. 

ROAS on Amazon Sponsored Brand ads surpassed ROAS on Sponsored Product ads. 

With a decline in CPC for both Sponsored Product ads and Sponsored Brand ads, there was an increase in ROAS. Sponsored Brand ads have the biggest quarter-over-quarter growth of 22%, while Sponsored Product ads grew 8% in the same period. 

Sponsored Brand ads are the only ad unit that saw positive YoY growth in ROAS. In first-quarter 2020, the ROAS rose 15%. In second-quarter ROAS rose 32%. This is also the first time in the last year that ROAS on Sponsored Brand ads surpassed ROAS on Sponsored Product ads, according to Pacvue’s data. 

CPA for Sponsored Brands fell by almost 25%. Sponsored Product ads still have the most cost-efficient performance, but only marginally compared to other quarters. In second-quarter 2020, CPA for Sponsored Brand ads was $6.91 and $6.45 for Sponsored Product ads. 

For Sponsored Brand ads, this is a particularly big change in CPA. The first quarter saw a CPA of $8.17, which means CPAs decreased by almost 25%. 

The conversion rate for Sponsored Brand ads is higher than for Sponsored Product ads for the second consecutive quarter. The difference between the two increased this quarter, although both Sponsored Product ads and Sponsored Brand ads decreased QoQ by 11% and 2%, respectively. 

When it comes to yearly growth, the results are different.

Compared to the same time last year, conversion rates for Sponsored Brand ads grew 33%, while the conversion rate for Sponsored Product ads decreased by 7%. 

Average daily spend rose QoQ and YoY for both ad types. Quarterly, Sponsored Brand ads and Sponsored Product ads grew by 13% and 14%, respectively. 

Annually, daily spend on Sponsored Brand ads has increased dramatically — 78% — compared to 23% for daily spend on Sponsored Product ads.