Guide to Amazon DSP Advertising

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Guide to Amazon DSP Advertising

With the continued increase in eCommerce sales, it’s no surprise that online sellers are looking for new ways to reach potential buyers. Every month over 200 million shoppers browse Amazon searching for products. Advertisers jockey for that customer traffic by fighting it out with paid search ads. In February 2022, Amazon revealed its advertising business grew 32% and booked $31 billion in 2021.

So how does a brand build their own audience in such a crowded marketplace?

Strategic Amazon DSP campaigns can scale your marketing and advertising strategy by driving awareness and reaching qualified customers at all stages of the customer journey on and off of Amazon.

What is Amazon DSP?

Amazon Demand-Side-Platform (formally known as Amazon Advertising Platform or AAP) is a demand-side platform that allows buyers of digital advertising inventory to manage multiple ad and data exchange accounts through a single interface. Amazon DSP offers power and flexibility by providing brands the ability to self-manage programmatic digital media campaigns. This means advertisers have extensive opportunities to drive awarenessconsideration, and sales on and off the platform by leveraging Amazon’s shopper data to target high-intent shoppers.

Put simply, Amazon DSP allows advertisers to buy display ads and video ads both on Amazon and on other websites and mobile apps that are either owned by or have partnered with Amazon. 

Amazon DSP Advertising

Sponsored Ads vs. Amazon DSP

Sponsored Ads should be the first place advertisers invest money but there will be a point where efforts are maxed out and incorporating Amazon DSP into the advertising mix is necessary. 

Amazon DSP is not a pay-per-click (PPC) platform but rather a cost per 1,000 viewable impressions (VCPM), similar to Facebook Meta. Unlike Sponsored Ads, Amazon DSP can be utilized by brands not selling on Amazon to drive traffic back to the DTC online store. Advertisers can bid on specific Amazon user groups (which are compiled based on their online shopping behavior) whereas Sponsored Ads bid on specific keywords and individual ASINs (which are self-managed through Seller Central and come with little targeting abilities). Not only can Amazon DSP ads be scaled at large to target qualified in-market shoppers across all Amazon owned-and-operated sites and apps, but it can also be used to reach Amazon shoppers across all leading publishers’ sites and mobile apps as well as through the largest third-party exchanges. This granular targeting option comes with a catch: brands must commit to a $35,000 campaign budget to use Amazon DSP.

How to Use Amazon Demand-side Platform

Amazon DSP allows advertisers to execute and optimize programmatic digital media campaigns focused on driving awareness, consideration, and sales. It provides highly accurate in-market targeting using exclusive first-party shopper data that is refreshed in real time, enabling ads to be served to customers in a relevant and timely manner. 

There are two ways for brands to access Amazon DSP:

  1. Amazon Managed: A great choice for those with limited programmatic advertising experience, Amazon provides a direct managed service option which includes consultative support. To access this, brands are required to spend a minimum of $35,000. 
  2. Managed Self-Service: Only available to Amazon Agency Partners, brands can utilize this option to have a greater degree of control over their campaigns. By working with an Amazon Ads Partner, advertisers can bypass the minimum spend requirement mentioned above to allow for more flexibility on the budget. 

Amazon DSP Targeting Options

During campaign creation and optimization, advertisers possess the ability to create custom audience segments specific to their products and categories to ensure a highly relevant user experience. This is due in large part to Amazon’s exclusive first-party shopper data that is refreshed in real time, providing best in class targeting capabilities. Their ability to know what a customer is searching for and when they make a purchase allows them to adjust ad targeting accordingly, which creates a huge advantage over other demand-side-platforms.

Amazon DSP offers a number of audience targeting options including:

  • Contextual: Shoppers that are actively looking at products related to your brand.
  • Lifestyle: Shoppers that show search and purchasing habits closely related to lifestyle groups such as vegetarians, fitness or pet lovers.
  • In-Market: Shoppers that have shown intent in the past 30-days to purchase a product within one of Amazon’s subcategories.
  • Audience Lookalike: Shoppers that have similar demographics and shopping behaviors as your current customers.
  • Remarketing: Shoppers that have previously engaged with a product either by searching for it, viewing the product detail page, or purchasing the product.
  • Advertiser Audiences: List of customers provided by the advertiser.

In April 2022, Amazon announced new total conversion metrics which allows advertisers to measure performance without the proper identifiers and be able to see the full picture of the campaigns.  

Ad Types for Amazon DSP

Amazon DSP has two advertising options: display ads and video ads.

Display Ads 

  1. Website and Mobile: whether viewed on a desktop or mobile device, these ads show up on websites and offer the most variety of ad sizes.
  2. Mobile App: these ads appear throughout Android, Fire Tablets, and iOS apps often in a banner-shaped form. 
  3. Mobile Interstitials: these ads take up the user’s mobile screen for a brief period of time.

Video Ads – 

  1. Online Video Ads: these ads are part of the browsing experience, appearing in both in-stream and out-stream formats
  2. Streaming TV Ads (formerly known as OTT Ads): these ads appear before, during, or after streaming content and cannot be skipped. 

Amazon DSP ads can be featured on:

  • Amazon.com
  • Amazon Devices (e.g., Fire TV, Kindle, etc.)
  • Amazon-Owned and Operated Web Properties (e.g., IMBdGoodreadsTwitch, etc.) 
  • 3P Websites

View Amazon’s ad specs here.

Reporting Metrics

Furthermore, Amazon DSP provides full-funnel reporting metrics including domain level reporting and audience insights data. This enables advertisers to better understand the path to purchase, from when the ad was first served to specific actions the shopper takes after. From impressions to clicks, understanding upper-funnel metrics is critical for optimizing campaigns. 

Advertisers can also view their private marketplace deals and bid metrics (including bid request, response counts, and bid rate) in the deals page. This provides advertisers with visibility into the health of their deals and whether they are set up properly with publishers or SSPs. To access these metrics, advertisers should navigate to their campaign manager. From the left-side menu, select “Deals” and the preferred date range. According to Amazon, deals now also include a health indicator, showing an alert to advertisers “if the deal is active but is not receiving bid requests from supply-side platforms (SSP).”

Source: Amazon Advertising

Final Thoughts

While Amazon DSP is unlikely to be a suitable fit for new sellers and smaller brands, it makes a great addition to brands that have a healthy ad budget and are looking to continue scaling. By harnessing the power of Amazon’s first-party shopper data, brands can attract new customers, retain existing customers, and target customers at various points during their shopping journey. This is one of the most effective tools for brands looking to take their advertising strategies and sales performance to the next level.

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