What is Amazon DSP? How to get started and advanced strategies

With Amazon and online sales becoming ever more important (and a sales packed Q4 around the corner), learning how to deploy more sophisticated programmatic retargeting campaigns is critical to staying competitive. The Amazon DSP is a great tool for anyone selling on Amazon — and even those who don't. This article is about getting you up to speed when it comes to the Amazon DSP.

DSP vs Sponsored Display

First of all, it’s worth differentiating the DSP from Amazon’s new Sponsored Display advertising, which also provides retargeting/remarketing options, and the ability to reach audiences on and off of Amazon. 

Sponsored Display is a self-service PPC advertising product. You need to be selling things on Amazon to use Sponsored Display ads, and ads are directly tied to your Amazon retail portfolio. This means that if you run out of inventory with Sponsored Display, the ads will automatically stop — not so with DSP which allows you to programmatically purchase ads that include, but are not limited to, display ads.

Amazon Sponsored Display

Amazon DSP

Self-service 

Managed

PPC (pay-per-click)

CPM (Cost-per-1000-impressions) 

Mid-to-bottom of funnel

Whole funnel

Display ads

Multiple creative options: 

• Banner ads
• Display ads
• Video ads

Directs customers to your Amazon listings

Directs customers anywhere:

• Amazon listings
• Your own website
• Custom landing pages
• Third-party websites

Requires selling on Amazon 

Selling on Amazon optional

Ads will stop if you run out of Amazon inventory 

Ads run independent of inventory 

Sponsored Display campaigns tend to cover the mid-to-bottom portion of the funnel. These campaigns are generally specifically set up to drive purchases on Amazon. DSP ads can work on the whole advertising funnel from awareness to purchase, and aren’t always even about driving Amazon sales. DSP goals might simply be to harness Amazon’s customer data to drive off-Amazon awareness or conversions. However, all of this comes down to your campaign goals.

If you want to learn more about Amazon Sponsored Display Ads, check out: 

• New Amazon Sponsored Display Ads: 2020 Update

• 6 Ways To Get More Clicks On Your Sponsored Display Ads

What does Amazon DSP do?

Amazon's Demand Side Platform (DSP) facilitates the programmatic buying and selling of digital advertising on Amazon. It also covers websites, social media platforms, mobile apps and online video channels. 

Amazon DSP best fits advertisers who want to buy display, video and audio ads at scale. Really, it’s the “big league” of Amazon advertising. Although there are ways to make it work on a budget, if you know what you are doing.  

Pro tip: The DSP, like everything on Amazon, is constantly updating. There are several expected changes by the end of the year. We will cover these as more information becomes available. Stay tuned, and check out Amazon's June press release for what we know now. 

How do you access Amazon DSP?

There are two options for accessing the Amazon DSP.

1. Amazon Managed: Amazon provides a direct managed service option for DSP. You get consultative support, and this is a great choice for those with limited programmatic advertising experience. However, to access this option, there is typically a required minimum spend of $35k. Although in geographies like the UK, that number is as low as £10k. Contact Amazon’s sales team for more information.  
2. Managed self-service: There are also a range of self-service options for placing DSP ads. This label is slightly misleading because you can only access this option via third-party agencies. However, it does provide users with more options and a greater degree of control over their campaigns. You can see a full list of Amazon agency partners here.  

Where do Amazon DSP ads appear?

There are two basic types of ads, and they appear in specific places.

Display ads: 

Can feature on:

• Amazon 
• Amazon devices, 
• Amazon-owned and operated sites — which is more than you might think, and includes: 
• IMDb
• Audible
• Box Office Mojo
• Zappos
• Goodreads
• Twitch
• And more 
• Across the web

There are many ad formats and placements available (example below). 

Unlike sponsored ads, destinations can be on or off Amazon and the Amazon ecosystem, including your own website. This is critical for D2C (direct-to-customer) businesses. 

Video ads: 

These ads can feature on:

• Amazon sites such as IMDb, 
• Devices such as Fire TV
• Across the web. 

Video ads can appear with video content (OTT), or as an element within a display ad (out-stream video). 

What ad types are available?

Dynamic e-commerce: Dynamic e-commerce ads automatically select which creative is displayed based on campaign goals.

Static ads: As these ads don’t have any dynamic elements, they need a call-to-action. These ads can route back to a product detail page, Amazon storefront or custom landing page.

Video ads through DSP: You can link your video ads to your own site or an Amazon product detail page.

Over-the-top video ads (OTT): These full-screen ads reach millions of people on connected TV sources (like the Amazon Fire TV Stick). You can target specific Amazon audiences, but these ads are not clickable.

Amazon DSP basics 

DSP has two stand out attributes.

1. Automatic ad buying across thousands of different websites 
2. Rigorous targeting underpinned by Amazon's purchasing data

Automated buying

With DSP, Amazon’s algorithm selects and bids on the best ad spaces (on and off of Amazon). These are further refined to fit your budget and target audience. 

How targeting works on DSP

Amazon DSP offers thousands of customer segments as well as insight into shopper purchase history and intent including: 

Behavioural: for example browsing or buying comparable items.

Lifestyle: Customers are targeted based on a common lifestyle. This means targeting customers that share profile characteristics with your existing customers, or show interest in brand-relevant categories. 

Contextual: Customers who show an interest in your product by visiting websites thematically related to your product.

Remarketing: Targets consumers who came close to buying your product or a competitive product. For example, customers that have abandoned your product in their check out basket, or added it to a wish list. 

Audience Lookalike: Targets customers who behave similarly to selected groups. Such as a brand's customers or competitor's customers.

Advertiser Audiences: You provide the relevant groups (customers or prospective customers) that you want to target.

Why target ads with DSP

Brand Awareness

This approach focuses on Sellers that want exposure to a larger audience. Measures for performance in this case would be click-thru, impressions and Detail Page Views (DPV).

Sales Generation

This involves:

• Re-targeting potential customers 
• Remarketing to existing customers 
• Targeting in-market customers 

This approach is focused on ACoS (Advertising Cost of Sale) or Return on Ad Spend (ROAS).

The most important thing to remember is that DSP retargeting is not set-and-forget. DSP has huge spend potential and optimization is a requirement. 

Pro Tip: Ensure that you have a dedicated DSP person monitoring the campaigns daily to avoid budget blowouts.

Prospecting/Marketing Insights

DSP ad results can tell you a great deal about customer behavior and segmentation. Knowing more about your customers leads to a more effective marketing strategy, especially when coupled with analysis and insights driven by data.

Creating DSP creatives 

There are some creative assets that you'll need to get started with advertising on DSP, such as banners, interstitials, and short videos. You can make your own or let Amazon do it for you. Amazon is putting a great deal of effort into the latter. 

Responsive ecommerce creative is one such new ad format to consider. It allows you to generate ads automatically with up to 20 associated products across a range of sizes. Amazon claims it reduces average build time by up to 90%.

The new ad format is optimized based on your choice of click-through rate, detail page view rate or purchase rate. Additionally, out-of-stock products will be deprioritized. 

If you are looking for even more specific options, Amazon enables you to develop custom solutions and experiences based on your specific goals. With custom executions, you aren't even limited to digital advertising channels. Your advertising program can also include offline channels and even live events. 

Understanding DSP reporting 

Amazon campaign reporting provides measures on how consumers discover, research and purchase your products. For example, Amazon DSP customers can generate a retail insights report for a campaign which allows you to view retail activity before, during and after campaigns. 

Attribution is a critical part of understanding these reports. Ultimately, this is different depending on whether or not you are selling products on Amazon or off Amazon. On Amazon, you can track product sales and total sales. Total sales include purchases influenced by the ad using Amazon’s Brand Halo technique. Off Amazon, you can only track conversions attributed to the campaign. Check out this article to learn more about Amazon Attribution.  

Third-party reporting solutions are also available to give insights such as brand lift and offline sales impact. Advertisers can also create custom reports based on unique requirements and save it within the Amazon DSP report center. 

How to get more out of the Amazon DSP

Competition within the Amazon Advertising PPC space is fierce. Amazon CPCs (Cost per Click) are generally going up as more and more advertisers pile into ecommerce. 

DSP is not that well known to many Amazon suppliers — and may still be out of their budget reach, given the average spend is $269/day. Expanding your reach with DSP will give you the opportunity to leverage audience insights from Amazon and have lower competition with off-Amazon and DSP-only ad inventory.

Understand your products and customers

By grouping your sales data into different segments, you can figure out what calls to action, text or triggers helped to push your best customers into buying for the first time.

By looking at customers as personas across product categories, you can take action to put more effort into specific aspects of your marketing. For example, knowing the demographic information and purchase patterns of customers lets you improve and make the most out of DSP targeting.

Drill down on CLV and break-even ACoS

If you understand what your products are really worth to you, you can more effectively target and bid on them within a prioritized hierarchy — and ensure you are always driving profit.

By analyzing your customers buying trajectories and personas you can look at:

• how to develop your product portfolio 
• where to double-down 
• where to cut your losses

You have the data to help you. Check out our free ebook — How To Make Sense of Your Amazon Customer Data — if you want details on how to harness that data to better effect. 

Amazon DSP is on a roll

Amazon is developing its advertising portfolio relentlessly. Keeping up to date is vital as it more clearly defines what will be in its DSP portfolio and what will be in it pay-per-click Sponsored Ads,

In DSP, a great deal of work is being put into automation. For example, for the first time, advertisers working with API-integrated tool providers can get a comprehensive and quantifiable view of their Amazon performance for non-Amazon marketing campaigns. 

Make the most of your data

Not every product needs a DSP full-funnel approach — your data will guide you. Success on Amazon is all about data and how you use it to your advantage. Using the many levers at your disposal provided by the DSP and PPC ads will be key to staying ahead of the competition. Future-proofing your DSP strategy needs to be part of success on the future of the platform.