Amazon DSP vs. Sponsored Display ads: Things you Need To Know

As we navigate through the specifics of Amazon DSP and Sponsored Display ads, they may seem similar. But each of them offers unique features and benefits tailored to different advertising needs and objectives.

This article dives into the intricate world of Amazon DSP and Sponsored Display ads, which offers insights into how each platform operates and their distinct advantages for your Amazon PPC businesses.

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Audience Target

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Amazon DSP

Utilizing the Amazon DSP network, businesses can leverage Amazon DSP even if they are not established on the Amazon website. As an independent advertising purchasing platform, Amazon DSP allows advertisers to place ads not only within the Amazon platform but also on its partner and third-party websites, such as:

• Amazon websites and mobile apps: Including Amazon's main shopping site, Kindle apps, etc.
• Other websites owned by Amazon: Like IMDb, Twitch, Audible, etc.
• Partner sites and networks: Advertisers can also access various advertising networks and partner websites, which may not be directly owned by Amazon but are affiliated with it.
• Third-party websites: Through collaborations with external ad exchanges and networks, Amazon DSP can place ads across a wide range of third-party websites and apps.

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Sponsored Display Ads

In contrast, Sponsored Display Ads focus more on shoppers within the Amazon platform, particularly those who have shown interest in similar products. By targeting Amazon users who have already viewed similar goods or related categories, Sponsored Display Ads enable sellers to reach potential customers already in their buying journey. This advertising form is particularly beneficial for sellers aiming to increase specific product sales and optimize conversion rates.

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Cost Structure

Amazon DSP typically has a higher minimum investment requirement, while Sponsored Display Ads offer a relatively lower entry threshold. This means that businesses of different sizes might choose different advertising forms based on their budget.

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Amazon DSP

Amazon DSP usually employs a CPM model, meaning cost per thousand impressions. This implies that advertisers pay based on the number of times their ad is displayed. This model is suitable for advertisers more focused on brand exposure rather than immediate clicks or conversions. Also, DSP's advertising budget is generally higher, often requiring a minimum monthly spend of $35,000 to start with Amazon DSP. Due to Amazon DSP's broader ad network and higher minimum budget threshold, it primarily targets medium to large advertisers and brands.

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Sponsored Display Ads

Sponsored Display Ads typically use a CPC model, where advertisers pay only when a user clicks on their ad. This is a more cost-effective option for sellers with limited budgets who want to directly drive sales. Sponsored Display Ads allow sellers to advertise with a lower starting budget (generally $1), making it an ideal choice for small and medium-sized sellers.

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Bidding Mechanism

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Amazon DSP

Amazon DSP allows advertisers to purchase ad spaces through a real-time bidding (RTB) system. This means advertisers can set the maximum price they are willing to pay for the display to a specific audience, and the system automatically bids when this audience browses through partner sites. DSP offers a high degree of automation, as advertisers can set target audience parameters and let the system automatically find matching users. Additionally, DSP provides high customizability, allowing advertisers to choose specific websites, device types, geographic locations, etc., for their ad displays.

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Sponsored Display Ads

The bidding in sponsored display ads for seller is simpler than the real-time bidding system of Amazon DSP. Advertisers set their bid amount for each click and can adjust it based on the ad's performance and their budget. Sponsored Display Ads focus on product or interest targeting, allowing advertisers to reach customers directly on Amazon based on their shopping behaviors. This approach is more straightforward and user-friendly.

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Ad Management and Complexity

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Amazon DSP

Amazon DSP typically requires more time and expertise for management, whereas Sponsored Display Ads are more user-friendly and easier to set up.

Amazon DSP offers highly complex advertising management options, demanding more time and expertise from advertisers to optimize their campaigns. Amazon DSP allows advertisers to upload and use their own designed ad creatives. This means advertisers have complete control over the visual appearance, copy, and overall style of the ads, ensuring they align perfectly with their brand image and marketing objectives.

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Sponsored Display Ads

DSP is characterized by providing in-depth data analytics and extensive audience targeting tools, requiring certain skills and experience to fully utilize. Therefore, using DSP might necessitate professional ad management personnel or collaboration with an agency.

In contrast, Amazon's Sponsored Display Ads are designed to be more user-friendly, enabling even sellers with no advertising experience to easily set up and manage ads without needing to delve into the complexities of programmatic ad buying. Because Amazon Display Ads are auto-generated using Amazon's vast user data, including purchase history, search history, and browsing behavior. Based on this data, Amazon's algorithms can determine which users are most likely to be interested in a specific product or service, and target ads to these users. Therefore, in some cases, ad content (such as images and text) can be auto-generated based on product information and preset templates. This means advertisers don't need to manually create new ad materials for each ad.

This simplified management approach makes Sponsored Display Ads an ideal choice for small and medium businesses and sellers seeking a advertising solution.

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Retargeting Capabilities

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Amazon DSP

Amazon DSP ads can retarget to websites outside of Amazon, such as your own e-commerce site. This feature is particularly valuable for advertisers who wish to leverage Amazon's extensive user base to drive traffic to their own websites.

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Sponsored Display Ads

Sponsored Display Ads are primarily used for retargeting within the Amazon platform. They allow sellers to display ads to Amazon users who have already viewed their products or similar items.

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Advertising Console

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Amazon DSP

Amazon DSP (Demand-Side Platform) tends to feature a more intricate interface, providing advanced functionalities and customizable options. It offers high-level features like detailed audience segmentation, intricate performance analysis tools, and an extensive selection of ad formats. The ad formats include:

• Display Ads: This includes standard banner ads and other graphic ad forms, displayable on Amazon’s site and its affiliate websites.
• Video Ads: These ads can be played on Amazon’s video streaming services, affiliate sites, and sometimes on third-party websites.
• Audio Ads: These ads are playable on Amazon Music and other audio streaming platforms, providing an auditory experience for listeners.
• Mobile Ads: Ads specifically tailored for mobile device users, displayable on Amazon apps and other mobile platforms.
• OTT (Over-the-Top) Ads: These ads play in streaming content on Amazon Fire TV and other streaming devices.
• Dynamic Creative Optimization: Advertisers can automatically tailor ad content based on audience behavior and preferences.

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Sponsored Display Ads

Sponsored Display Ads are typically more intuitive and user-friendly. It’s ideal for users with less  advertising expertise. They provide basic ad features like keyword targeting, automated bidding, and fundamental performance reporting. This platform is more focused on product-level advertising, suitable for directly promoting sales.

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Conclusion

Amazon DSP and Sponsored Display Ads both possess distinct advantages and shortcomings. The appropriate choice of advertising relies on several crucial factors: the scale of your business, the type of products you intend to promote and their traffic, your advertising budget, and the professional skills of your team and their familiarity with Amazon's advertising ecosystem. No matter which type of advertising you opt for, it's essential to consistently monitor its performance. Doing so enables you to evaluate its effectiveness, refine your advertising campaigns, and modify your strategy in response to market feedback.