Amazon DSP Advertising: A Complete Guide to Success

Amazon’s advertising ecosystem is vast and dynamic, providing brands with multiple channels and formats to engage with consumers. From sponsored products to video ads, Amazon’s suite of ad products offers something for everyone. However, for brands seeking to go beyond the basics and fully leverage the power of programmatic advertising, Amazon DSP is a game-changer.

In this article, we’ll take a deep dive into Amazon’s ad ecosystem, providing a broad overview of how each platform works.

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Here is a quick peek into the article:

• What is Amazon DSP Advertising?
• Amazon DSP vs. Other Programmatic Platforms 
• Amazon DSP vs. Sponsored Display Ads
• Benefits of Amazon DSP for Advertisers
• Set Up Your Amazon DSP Account
• Optimise Amazon DSP Campaigns for Performance
• How to Leverage AMC for your Reporting & Analytics?
• Is it Worthy to Try Amazon DSP?
• FAQ

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What is Amazon DSP Advertising?

Amazon DSP (Demand-Side Platform) Advertising is a programmatic advertising solution offered by Amazon that allows advertisers to programmatically buy display and video ad placements across Amazon’s owned-and-operated sites, as well as on third-party websites, apps, and devices, to reach relevant audiences. This advertising platform provides advertisers with advanced targeting capabilities, real-time bidding, and optimization features to drive effective ad campaigns.

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What is Programmatic Advertising?

Programmatic advertising refers to the automated buying and selling of digital ads using data-driven algorithms. Unlike traditional media buying, where advertisers negotiate directly with publishers, programmatic advertising uses a digital auction system where ad placements are bought in real-time based on specific targeting criteria.

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Amazon DSP vs. Other Programmatic Platforms 

You might wonder what differentiates Amazon DSP from other programmatic ad platforms like Google’s Display & Video 360 or The Trade Desk. The main difference lies in the access to Amazon’s unparalleled data. Here’s how Amazon DSP stands out:

Data Utilization: Amazon DSP excels in utilizing first-party shopping data, making it particularly effective for e-commerce brands looking to drive sales. In contrast, DV360 and The Trade Desk leverage broader behavioral data but may lack the granular purchase intent insights available through Amazon.

Integration and Ecosystem: For brands already using Amazon for sales, Amazon DSP’s integration with other Amazon advertising products provides a streamlined approach to full-funnel marketing. Google and The Trade Desk offer extensive cross-channel capabilities, but their ecosystems do not provide the same level of e-commerce-specific insights as Amazon.

Focus on Purchase Intent: Amazon DSP is tailored for brands looking to capitalize on direct purchase intent, while DV360 and The Trade Desk offer broader digital marketing capabilities, including brand awareness and engagement.

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Difference Between Amazon DSP and Amazon Sponsored Display

Both Amazon DSP and Amazon Sponsored Display are powerful advertising tools, but they serve distinct purposes within Amazon’s ad ecosystem. Here we breakdown for you:

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Scope of Reach

• Amazon DSP: Offers programmatic buying of display, video, and audio ads across a wide range of Amazon-owned properties (e.g., IMDb, Fire TV) as well as external third-party websites and apps. With DSP, you can target audiences both on and off Amazon, making it a powerful tool for reaching users across the entire web.
• Sponsored Display: Focuses primarily on display ads shown within the Amazon platform and across limited external websites (usually in partnership with Amazon). Sponsored Display is more directly tied to driving conversions on Amazon’s own marketplace and works well for sellers aiming to retarget customers within the Amazon ecosystem.

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Audience Targeting

• Amazon DSP: Leverages Amazon’s extensive first-party data to target specific audiences based on detailed behavioral data, including past purchases, browsing history, and interests. This enables advertisers to create highly granular targeting segments, such as in-market audiences, lifestyle-based targeting, and lookalike audiences. DSP also allows for retargeting and prospecting campaigns across both Amazon and third-party sites.
• Sponsored Display: Offers simpler audience targeting options compared to DSP. It mainly allows for retargeting—showing ads to users who have already viewed or purchased products from your brand. Sponsored Display also has some interest-based targeting, but it lacks the depth and variety of audience segments available in DSP.

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Ad Formats

• Amazon DSP: Supports a range of ad formats, including display, video, and audio. DSP ads can appear on Amazon’s own properties like Fire TV, IMDb, and Kindle, as well as on third-party websites and apps. This gives advertisers the flexibility to use multimedia ads and to build a cross-channel strategy.
• Sponsored Display: Primarily focuses on display ads. These ads typically appear on Amazon product detail pages, alongside search results, and on external websites through Amazon’s partner network. Sponsored Display is limited in terms of creative formats and focuses more on traditional product ads.

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Management and Complexity

• Amazon DSP: Requires more advanced management and a greater understanding of programmatic advertising. You can work with Amazon directly to set up a DSP account, or use a managed service provider. It offers far more customization and data analysis, but it can be complex for beginners.
• Sponsored Display: Easier to use and directly managed through the Amazon Advertising console. It’s a self-service option, meaning that advertisers can set up and run their own campaigns quickly without needing programmatic advertising expertise.

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Minimum Spend

• Amazon DSP: Typically requires a higher minimum ad spend compared to other Amazon ad products. If you choose to work with Amazon directly, the minimum spend might be around $35,000. However, if you work with a managed service provider, the spend requirements can vary, but they are still generally higher than other Amazon advertising options.
• Sponsored Display: Does not have a minimum ad spend requirement, making it more accessible to smaller businesses or those new to advertising on Amazon. You can set your budget according to your needs, making it more flexible and cost-effective.

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Campaign Goals

• Amazon DSP: Ideal for a full-funnel advertising approach, where the goal is not just conversions but also brand awareness and consideration. DSP campaigns are often used to drive awareness at the top of the funnel and then retarget or re-engage users to drive sales.
• Sponsored Display: Primarily focused on retargeting and lower-funnel strategies. Sponsored Display excels at encouraging customers who have already shown interest in your products to complete their purchase. It’s more tailored for advertisers looking to directly boost sales on Amazon’s platform.

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Ads Types of Amazon DSP

Amazon DSP offers multiple types of campaigns to cater to different advertising goals and audience segments. These ads can appear in a variety of places, including on Amazon’s website, on Amazon-owned properties (like IMDb and Fire TV), and across external websites and apps.  

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Display Ads

Display ads are the most common format in Amazon DSP. Display ads can include static images or dynamic content and are ideal for building awareness or retargeting:

• Static Display Ads: Feature static images, headlines, and call-to-action buttons.
• Dynamic eCommerce Ads (DEA): These ads automatically optimize and adjust the creative to showcase specific products the user has previously viewed or may be interested in.
• Responsive eCommerce Creative (REC): Adjusts ad format dynamically across different placements and device sizes.

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Common use cases:

• Retargeting visitors who have viewed or considered products.
• Prospecting new audiences based on behavioral data, such as lifestyle or shopping interests.

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Video Ads

These are ideal for creating emotional connections with potential customers, demonstrating product features, or enhancing brand awareness.

• In-Stream Video Ads: These run during video content on Amazon-owned platforms (such as IMDb TV) and on third-party video sites.
• Out-Stream Video Ads: Appear in between other types of content (e.g., within a webpage).
• OTT Video Ads (Over-the-Top): These ads are placed on connected TV (CTV) devices and streaming platforms, reaching audiences that consume video content without traditional cable.

Common use cases:

• Brand storytelling or promoting new product launches.
• Running cross-channel video campaigns to boost visibility across web, mobile, and connected TV devices.‍

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‍Audio Ads

With the rise of smart speakers like Amazon’s Echo and the popularity of Amazon Music, DSP also offers audio ads. These allow brands to reach audiences through audio-based platforms, delivering messages to users during their listening experiences.

Common use cases:

• Reaching customers on Amazon Music or other audio platforms while they listen to music or podcasts.
• Enhancing brand recognition through voice-driven campaigns.

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Retargeting Ads

Amazon DSP excels at retargeting, which is the process of serving ads to users who have previously engaged with your brand but haven’t yet converted. 

Common use cases:

• Reaching cart abandoners or users who visited a product page but did not purchase.
• Re-engaging customers who haven’t purchased in a while to promote new products or offers.

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Audience Extension Ads

Amazon DSP’s Audience Extension is particularly valuable for reaching audiences who have shown purchase intent within the Amazon ecosystem but may be browsing elsewhere.

Common use cases:

• Serving display or video ads on external sites to reach in-market audiences (people who are actively shopping for similar products).
• Using lookalike targeting to find users similar to your current customers on external websites.

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Custom Ads

Amazon DSP allows for custom ad placements and formats based on specific campaign needs. This could include interactive banners, special partnerships with websites, or high-impact video ads.

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Benefits of Using Amazon DSP for Advertising

Whether you're aiming for brand awareness, retargeting, or direct conversions, Amazon DSP provides comprehensive solutions for advertisers across various industries. In this section, we will explore the core benefits of using Amazon DSP for advertising compared to Amazon other sponsored ads.

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Cross-Channel Advertising

Relying on a single programmatic marketing channel isn’t a sustainable approach.Amazon DSP provides the ability to run ads across multiple channels, both on and off Amazon. This includes placements on:

• Amazon-owned properties: Display ads can appear on Amazon’s homepage, product detail pages, and across other Amazon services such as IMDb and Fire TV.
• Third-party websites and apps: Amazon DSP reaches a broader audience by placing ads on third-party websites and mobile apps, offering wide-scale reach beyond Amazon’s ecosystem.
• Video, audio, and OTT: Advertisers can utilise video and audio ads on platforms like Twitch, Amazon Music, and Amazon Prime Video. This multimedia approach allows brands to engage users across different formats.

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Advanced Reporting and Analytics

Amazon DSP offers in-depth reporting and analytics tools, providing advertisers with valuable insights into their campaigns’ performance. Report from Merkle found that 10+hours of reporting time saved per person per month by using Amazon DSP.  

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Set Up Your Amazon DSP Account

Before you can start running campaigns on Amazon DSP, you need to set up your account. To use Amazon DSP, you can choose between two main access options:

• Self-Service: This option is ideal for advertisers with experience in programmatic advertising. You will have full control over setting up and managing your campaigns, along with access to all of Amazon DSP’s tools. However, self-service requires a minimum budget commitment (often around $35,000).
• Managed-Service: This option is best suited for advertisers who prefer Amazon’s team to manage their campaigns. While this requires a higher minimum spend commitment (usually $50,000), it allows Amazon’s advertising specialists to handle campaign setup, optimization, and reporting.

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Now Create an Amazon Advertising Account

If you don’t already have an Amazon Advertising account, you will need to create one. To do this:

1. Visit the Amazon Advertising website and select “Register” to create an account.
2. Fill in your business details such as company name, address, and contact information.
3. Submit your application and wait for approval.

Once approved, you’ll be able to access Amazon DSP and other advertising solutions offered by Amazon.

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Set Up Your DSP Account

Once your Amazon Advertising account is created, follow these steps to set up your DSP account:

1. Log in to the Amazon DSP Console: Once inside the DSP platform, you'll need to go through the account setup process.
2. Set up your payment details: Make sure to link your payment method to ensure there are no interruptions in your campaigns.
3. Choose your campaign objectives: Whether your goal is brand awareness, consideration, or conversion, you'll need to set up the objectives that will guide your campaign settings.
4. Audience setup: Define your target audience based on demographic data, interests, or behavioral segments. You can also upload custom audience lists for retargeting.
5. Create campaigns: With Amazon DSP, you can set up multiple campaigns targeting different audience segments or running in parallel to test various creatives.

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Optimise Amazon DSP Campaigns for Performance

Creating an Amazon DSP campaign is just the beginning. The real value comes from continuous optimization to ensure your ads are reaching the right audience, driving results, and staying within your budget. 

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Understand Key Performance Indicators (KPIs)

Before diving into optimization strategies, it's important to understand the KPIs that will guide your decisions. The most common KPIs for Amazon DSP campaigns include:

• Impressions: The number of times your ad is shown. A higher number of impressions may indicate good reach, but impressions alone don’t guarantee engagement.
• Click-Through Rate (CTR): The percentage of people who click on your ad after seeing it. A high CTR shows that your ad is relevant to the audience, but it needs to be coupled with conversions to measure true effectiveness.
• Cost-Per-Mille (CPM): The cost per 1,000 impressions. Lowering your CPM while maintaining reach is key to improving the efficiency of your ad spend.
• Cost-Per-Click (CPC): The average cost for each click on your ad. Reducing CPC while increasing conversions is one of the primary goals of optimization.
• Return on Ad Spend (ROAS): This is one of the most important metrics, showing how much revenue your campaign generates for each dollar spent. A higher ROAS indicates better performance.

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Bidding Strategies and Budget Allocation

Optimising your bidding strategy can help you balance cost-efficiency with high-quality impressions. Amazon DSP offers different types of bidding strategies, including:

• Dynamic CPM: Adjusts your bid based on the likelihood of an ad converting. This is great for increasing efficiency, as it helps avoid overspending on low-value impressions.
• Fixed CPM: Useful for campaigns with a strict budget, as it ensures that you pay a fixed amount per 1,000 impressions. This method is ideal for brand awareness campaigns.
• Budget reallocation: As your campaign progresses, monitor which ad groups are delivering the best ROAS. Reallocate your budget from underperforming segments to high-performing ones to maximise returns.

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How to Leverage AMC for your Reporting & Analytics?

Leveraging Amazon Marketing Cloud (AMC) for Amazon DSP campaigns can provide deep insights into customer behaviour, allowing you to optimise your ad strategy, improve targeting, and maximise ROI. Here's how to make the most of AMC for your DSP efforts:

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Holistic Performance Analysis

AMC offers the ability to analyse DSP campaign performance beyond standard metrics like impressions, clicks, and conversions. You can:

• Track the full customer journey: Use AMC to analyze user interactions with your ads across devices and channels. Understand how DSP ads contribute to various stages of the purchase funnel—awareness, consideration, and conversion.
• Cross-channel insights: Combine data from Amazon DSP with Sponsored Ads campaigns to see how these efforts complement each other. This can help you optimize your cross-channel strategy and allocate your budget more effectively.

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Audience Insights and Segmentation

AMC allows you to gain deeper insights into the behavior and demographics of the audience segments you're targeting via DSP. By leveraging these insights, you can:

• Identify high-value audiences: Analyze which audience segments are more likely to convert and refine your DSP targeting accordingly. This can involve creating more granular audience segments based on behavior patterns (e.g., users who engage with both Sponsored Products and DSP ads).
• Refine retargeting strategies: AMC provides data on users who have been exposed to your DSP ads but haven't yet converted. You can use this data to build refined retargeting segments, focusing on those who are more likely to engage or make a purchase.

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Custom Attribution Models

While Amazon DSP provides basic attribution reporting (last-click attribution), AMC enables the creation of custom attribution models. By doing so, you can:

• Better understand the role of each touchpoint: Determine the impact of your DSP ads in conjunction with other ad formats (like Sponsored Products or Sponsored Brands) on conversion. For example, you may find that certain DSP ads work better at driving awareness, while Sponsored Products drive conversions.
• Adjust bid strategies: Use this understanding to adjust your DSP bids based on how different placements or touchpoints contribute to sales.

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Conversion Path Analysis

AMC allows you to analyze the complete path to conversion, helping you understand how users are interacting with your ads:

• Optimize ad placements: Discover where DSP ads fit into the customer journey. For instance, you might find that DSP display ads are most effective when shown early in the funnel, while video ads play a stronger role later in the consideration phase.
• Reduce wasted spend: By identifying which touchpoints are redundant or not contributing significantly to conversions, you can eliminate unnecessary ad spend and allocate your budget to higher-performing areas.

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Incrementality Testing

You can use AMC to perform incrementality analysis, which helps you determine the true impact of your Amazon DSP campaigns:

• Understand incremental lift: Run experiments to compare groups exposed to DSP ads versus those who weren't, and measure the incremental sales or conversions attributed to DSP campaigns.
• Refine creative and bidding strategies: With incrementality insights, you can make data-driven decisions on which creative formats and bid strategies work best to drive additional conversions rather than just attracting users who would have converted anyway.

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Time-Lag and Frequency Analysis

AMC allows you to analyze time-lag (the time between ad exposure and conversion) and frequency (how many times a user needs to see your ad before taking action):

• Optimize ad frequency: Adjust the frequency of DSP ads based on how often users need to see your ads before converting. Too few exposures could lead to missed opportunities, while too many could result in ad fatigue.
• Tailor messaging: If users are taking longer to convert, you can adjust the messaging of retargeting ads or create ad sequences that progressively lead them toward purchase.

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Custom Reports and Dashboards

AMC allows you to create custom reports and dashboards tailored to your DSP campaigns:

• Visualise complex data: Generate easy-to-understand visualisations of your DSP performance, attribution models, audience segmentation, and cross-channel behaviour.
• Monitor KPIs more effectively: Track key performance indicators (KPIs) like cost per acquisition (CPA), return on ad spend (ROAS), and more in real time, allowing for quicker decision-making and optimizations.

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Is it Worthy to Try Amazon DSP?

Unlike Amazon’s Sponsored Ads, Amazon DSP automates media buying through programmatic methods. This means you can access premium ad placements more efficiently, manage bids in real-time, and adjust campaigns based on performance data. But Amazon DSP is generally recommended for advertisers with larger budgets. Minimum spends for Amazon DSP campaigns can be higher than other Amazon advertising options like Sponsored Products or Sponsored Brands.

If your budget is limited, Amazon’s Sponsored Products and Sponsored Brands might offer a better return, as they have lower cost-per-click rates and are more focused on driving direct conversions on Amazon.

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FAQ

What is Amazon DSP?

Amazon DSP, or Amazon Demand-Side Platform, is an advertising platform that enables advertisers to programmatically buy display and video ads. It allows businesses to reach potential customers across Amazon-owned sites, as well as third-party websites, apps, and devices.

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How does Amazon DSP work?

Amazon DSP works by using data and algorithms to target relevant audiences with ads. Advertisers set campaign goals, target audiences based on their interests and behaviors, and bid on ad placements in real-time auctions. The platform then delivers the ads to the selected audience across various channels.

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Where do Amazon DSP ads show?

Amazon DSP ads can be displayed on Amazon-owned platforms like Amazon.com, Amazon devices, and Amazon apps. Additionally, the ads can appear on third-party websites, apps, and devices through Amazon's vast network of publisher partners.

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How does a demand-side platform make money?

Demand-side platforms, including Amazon DSP, typically charge advertisers based on the number of ad impressions served, clicks received, or conversions generated. Advertisers set their budgets and bid amounts to compete for ad placements, and the platform charges them accordingly.

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Is it still worth doing Amazon DSP advertising?

Yes, Amazon DSP advertising can still be worth it for businesses looking to increase brand visibility, reach new customers, and drive sales. With precise targeting options, real-time analytics, and access to Amazon's vast customer base, it can be a valuable investment for many advertisers.

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