Amazon DSP 101: Everything sellers need to know

Posted by Jimi Patel | November 8, 2022

Have you capped out your potential with Amazon Sponsored Ads?

It’s time to venture out of your comfort zone and dive into the world of programmatic display advertising aka Amazon DSP. In this article, we’ll gain a deeper understanding of what is DSP, is it right for your brand and how can brands leverage DSP to reach their full potential.

What is Amazon DSP?

What is Amazon DSP

Amazon DSP – which stands for Demand Side Platform – is a Display Advertising Platform specifically designed to engage off-Amazon audiences on Amazon sites, across the web, and in mobile apps. This means that advertisers can programmatically buy display, video and audio ads on Amazon and other sites/apps owned by or partnered with Amazon.

With DSP, brands can:

  • Create unique advertising campaigns based on their most pressing goals
  • Introduce or remind customers of their product
  • Connect with a great deal of new potential customers at different stages of their buying journey
  • Pull traffic from other sources and increase reach

Who can use Amazon DSP?

Any seller selling or not selling on Amazon can use DSP to broaden their online reach and retarget potential customers.

Unlike Amazon PPC which can be self-managed by sellers, Amazon DSP can be run by Amazon on the seller’s behalf or self-managed through a recognized Amazon advertising agency that has been authorized by Amazon.

To let Amazon manage your DSP account on your behalf, you must commit to a minimum campaign budget of $35,000. Partner agencies are slightly more flexible when it comes to budget.

It is important to keep in mind that DSP is not relevant for new brands and small sellers. It is really only for big brands that have already maxed out their Amazon Sponsored Ad potential and want to scale beyond the platform.

Types of DSP Ads

amazon dsp ads

Just like Sponsored Ads, these ads are available in many different forms including

  • Desktop & Mobile Display Ads: Reach and target customers through high-quality display ads.
  • Dynamic Ecommerce Ads: Optimize to specific buyer behavior based on their previous purchases.
  • Mobile Interstitial Ads: Full-screen ads displayed inside mobile apps during transition points.
  • In-stream Video Ads: 5+ second in-stream and out-stream video ads.

Targeting options available in Amazon DSP

  • Pixel based: Targeting shoppers who visit your website.
  • Product remarketing: Retargeting shoppers who viewed your advertised products but did not convert.
  • Brand halo remarketing: Retargeting shoppers who viewed other products of your brand.
  • Similar product remarketing: Reaching shoppers browsing products similar to yours.

Where do Amazon DSP Ads appear?

Using DSP, advertisers can reach relevant audiences on:

  • Amazon marketplaces: homepage, product detail page, search result page, deals page, etc.
  • Amazon owned devices: Fire TV, Fire tablet, Kindle, etc.
  • Amazon owned apps
  • Amazon owned websites: IMDb, Freedive, Goodreads, Audible, Twitch TV, etc.
  • Published Partners
  • Third Party Exchanges

How is Amazon DSP different from Amazon Sponsored Ads?

Every seller selling on Amazon is familiar with Sponsored Ads, more commonly known as PPC.

Although both Amazon DSP and Amazon Sponsored Ads are used to target new customers and increase sales, they are fundamentally different.

One of the main differences is that Amazon DSP advertising does not fall under the Pay-per-Click (PPC) model. Instead, it follows a Cost-per-Thousand (CPM) pricing model where advertisers pay every time a shopper sees their ad, whether they interact with it or not.

While Amazon Sponsored Ads uses keywords to display ads to the right audiences, DSP targets people by behavior. This means that your ad will show up based on other things they bought, the categories they’ve browsed, the products they added to their cart but never bought, the detail pages they’ve visited and other ‘behavior’ based triggers.

Another huge difference is that whereas Amazon Sponsored Ads can redirect shoppers to your detail page or brand store within Amazon, Amazon DSP can be leveraged to drive shoppers to your own website, away from all the noise and competitors.

Amazon Sponsored Ads are easy to build, easy to optimize and simple to manage. Amazon DSP on the other hand is more refined and complex than traditional PPC advertising. It gives advertisers precise control on how, where and when their ads appear.

Amazon DSP Amazon Sponsored Ads
Eligibility Available to all sellers regardless of whether or not they sell onAmazon Available only to thesellers who sell on Amazon
Pricing model Cost Per Thousand (CPT) Pay Per Click (PPC)
Minimum investment Varies per region Min $1
Can traffic be redirected to the brand’s own website? Yes No

Benefits of Amazon DSP

#1: Advanced targeting capabilities

Unlike traditional PPC ads, Amazon DSP has a wider range of targeting options that allows advertisers to connect with customers based on geographical location, demographics, date/time schedules and segmentation.

#2: Retargeting

Ever wanted to re-engage with customers who already bought from you a few months ago? Ever wanted to target shoppers who buy from your competitors? Ever wanted to retarget shoppers who visited your product page but didn’t buy from you? You can do all of that using Amazon DSP.

DSP campaigns allow advertisers to reach out and re-engage with shoppers who already know about your brand and the products you have to offer.

#3: Comprehensive data

Amazon being the largest e-commerce platform in the world has the most sophisticated and comprehensive database of shoppers at all stages of the purchase journey. Because Amazon’s data is solely based on customers geared towards making a purchase, it is dramatically different and several times more effective than Google and Facebook’s data.

With DSP, brands can harness Amazon’s swathes of shopper data and reach high-intent shoppers with branded creative.

#4: Increased reach

Reaching your target audience has never been so competitive. As worldwide inflation tightens customer spending, the only way to remain relevant is with a comprehensive and diversified ad strategy. When used in tandem with Amazon Sponsored Ads, Amazon DSP helps advertisers widen their potential with relevant placements on and beyond

Disadvantages of Amazon DSP

Like every other ad platform, Amazon DSP isn’t perfect. Below we’ve listed out the cons of using Amazon DSP:

  • Lengthy and complicated registration process
  • Not for small businesses with low budget and ad spends
  • Additional costs of producing high-quality display and video banners
  • Proving effectiveness of a DSP campaign can be difficult

Amazon DSP tips, best practices and mistakes

Amazon DSP tips

  • Determine your goal. Do you want to increase brand awareness, boost sales, or both? Establishing your goals beforehand will help you determine which audiences to target and which KPIs to measure. For a strategy created to boost sales, you’ll want to measure ROAS or CPP (Return On Ad Spend or Cost Per Purchase) and optimize for ‘Purchase’. To increase brand awareness, you’ll want to track your detail page view rate, click-through rate, viewability goal and video completion rate.
  • Use retargeting to rope in customers who haven’t purchased from you in a while and to get them excited for tent pole events like Prime Day and Black Friday.
  • DSP ads will still function even if a product is out of stock, so be sure to check your inventory levels regularly.
  • Don’t expect your DSP results to mirror your Amazon PPC results.
  • Don’t reuse creatives that worked for your Amazon PPC or social media advertisements. DSP is a unique platform. What worked somewhere else might not work here. Hire an Amazon creative agency for your DSP campaigns.
  • Don’t consider DSP for low-priced items.

Amazon DSP is not for everyone

DSP is for brands who want to beef up their exposure and reach beyond Amazon. When done correctly, brands can expect to see an uptick in all the vital performance metrics.

Brands wanting to include DSP in their marketing strategy must have a decent budget, a solid online presence and a trusted Amazon marketing agency that can help them create and manage their DSP campaigns end-to-end.

Our team of Amazon consultants at eStore Factory is highly skilled at managing campaigns and developing excellent DSP structure to drive brand awareness and sales. Our Amazon experts will put in their time, effort and expertise to build out campaigns that help you reach and crush your goals.

Published by Jimi Patel

Jimi Patel, is a Co-founder and CEO at eStore Factory, an Amazon SPN certified agency that serves as a one-stop solution for all your Amazon business needs. Having helped countless brands increase sales and grow their footprint on Amazon, Jimi provides the most practical and effective solutions for your business. He is highly skilled in developing and executing plans that align with your specific business goals and objectives. When not working, Jimi enjoys practicing yoga and traveling to new places. He is an avid reader and enjoys staying up-to-date on the latest trends and developments in the e-commerce industry.

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