Amazon DSP: Understanding Demand Side Platform Advertising [Updated for 2021]
Online sellers are always looking for new and exciting ways to reach potential buyers and increase conversion rates. High-quality product display ads and video ads are a terrific means of letting the public know about the amazing products you have available. This is why Amazon has created its own Demand Side Platform (DSP).
How does it work and is it relevant to your eCommerce business? Let’s explore.
I. What Exactly Is the Amazon Demand Side Platform, Anyway?
Amazon’s DSP is easily the most-misunderstood component of Amazon’s growing advertising portfolio so, to begin with, let’s define it:
A demand side platform is software that allows an advertiser to search and programmatically buy display, video, and audio advertising placements across many platforms all over the internet.
Amazon advertising services could include product display ads on a popular news website or video ads in a mobile app, just to start. Honestly, there are countless possibilities.
Below are a few more things you should know about Amazon’s ads:
- The ad buying process is programmatic, meaning that Amazon’s algorithm automatically selects and bids on the best ad spaces (on and off of Amazon) that fit with your budget and target audience. Because the process is automatic, it’s very easy to scale. And because the algorithm is always learning from Amazon customers’ behavior, its targeting is only going to get smarter and more accurate the longer you use it.
- Advantageously, DSP is not solely for advertising on Amazon.com and on other properties owned and operated by Amazon (a power example being IMBD.com). Amazon’s DSP lets you advertise all over the web. And it’s certainly the best way to access advertising inventory on Amazon-owned products like the Kindle or Fire TV. If you’ve always wanted to reach these markets, this is how.
II. Who Is Amazon DSP for and Can You Benefit from It?
Anybody who wants to advertise on Amazon and the rest of the web is invited to use Amazon DSP. Although it’s an Amazon-owned platform, it’s not exclusively for Amazon sellers. So, no matter where you’re selling products, Amazon DSP may be for you.
A better question, then, is what makes it stand out from other advertising options around the Internet?
To answer this, let’s dive deeper into how the system works.
Amazon DSP and Ad Targeting
Honestly, there is no deeper well of consumer knowledge than Amazon’s.
Amazon DSP’s main attraction is that it can use Amazon’s deep well of data on customer behavior to target ads. Harnessing that powerful knowledge, Amazon DSP provides six targeting options:
- Behavioral Targeting hones in on customers who have shown behaviors such as browsing around a specific product category over the past 30 days.
- Contextual Targeting shows real-time relevant ads as people browse the web.
- Lifestyle Targeting shows ads relevant to people who habitually buy from a certain category, such as Exercise and Fitness.
- Remarketing re-engages with customers who have previously interacted with your brand or products.
- Audience Lookalike targets customers who share similarities with your current customers.
- Advertiser Audiences leverages information from a brand’s data, such as CRM data, a hashed email list, or a product page with a tracking pixel.
With all these targeting options and the massive detailed coverage Amazon data provides, you’re bound to find your brand’s next loyal fans.
Amazon DSP and Automation
There are basically two options for running Amazon DSP: enterprise self-service and managed-service.
- Enterprise self-service is hands-on and done by you or an advertising agency you hire.
- The managed-service is fully automated and controlled by Amazon’s computing system.
Let’s dig a bit deeper into each of these Amazon marketing services:
Amazon DSP Self-Service Benefits
The self-service DSP option is great for brands that haven’t reached a certain threshold and can’t yet afford to let the platform take over the process entirely.
While self-service is controlled by you, the process is still programmatic. You’ll simply be more involved with the real-time bidding process, including setting prices, picking relevant keywords, choosing which landing pages to advertise on, and your ideal audience.
Amazon DSP Managed Service
The managed-service option is fully automated and typically requires a minimum ad spend of $35,000.
It runs entirely in the background and is supervised by Amazon employees tasked with finding the best advertising options for you. This lets you constantly run ads knowing that your products are finding the right eyeballs on Amazon Marketplace, Kindle, Fire TV, Twitch, and other non-Amazon (but Amazon owned and operated) places all around the web.
Food for thought: Do you want Amazon to have access to all of your advertising data and to be able to control it and to spend your money? Does best interest refer to what’s most profitable for your brand or for Amazon or both?
III. Isn’t Amazon DSP Just Sponsored Display Ads with Extra Steps?
Sponsored Display is another recent development in the world of Amazon advertising and it does share a lot of similarities with Amazon DSP. As such, you may be a little confused as to which platform to use.
First off, both products support retargeting audiences and reach audiences both on and off of Amazon.
And here’s how the two Amazon’s ad products differ:
#1. Amazon DSP lets you get an ad up and running on Amazon and off-site quickly, allowing you to choose the audience, price points, and other aspects of the campaign. Sponsored Display, however, is more restrictive than Amazon DSP.
#2. The barrier to entry for DSP is lower (and the list of capabilities smaller) than that of Amazon Sponsored Display Ads.
Sponsored Display advertising solution lends itself to Amazon sellers who know their audiences are ready to roll and re-roll on the same ads. Amazon Demand Side Platform is, on the contrary, available to every seller, Amazon or non-Amazon.
To start using Sponsored Display Ads for your business, you must qualify for and be enrolled in Amazon Brand Registry, which is available through Amazon’s Seller Central. Also, the product must fall under certain eligibility guidelines, including being available for the Buy Box, meaning that you need to be an active Amazon seller.
#3. Amazon DSP is for a much larger audience, ready to take their advertising to the next level across the web. Amazon DSP ads appear both on Amazon-owned websites (e.g., IMDb) and their publishing partners’ sites. Amazon product and targeting ads, launched through Sponsored Display platform, do not appear outside Amazon.
#4. Through the DSP network, you can also send viewers to your online store, not your Amazon product listing or brand page. With Sponsored Display, you will only send new visitors to your Amazon entities.
IV. Is Amazon DSP Worth Your Time and Money?
The best way to look at it is “the next step.” A brand-new online seller isn’t likely to be a good match for the Amazon DSP platform. In fact, for this seller, Amazon DSP is likely overkill and cost prohibitive. For this seller’s next step, he or she would be better off using Amazon PPC software within Seller Labs PRO (try it free for 30 days).
However, if your brand is more established, you have some more capital, and you’re looking to scale up your advertising beyond Amazon Sponsored Products and Sponsored Brands (formerly known as Amazon Headline Search Ads), then Amazon DSP may be the right next step for you.
If you’re not sure you’re ready for the managed-service option, you can always sign up for self-service, DIY or use a team of experts.
Ready to Get Started With Amazon DSP?
A team of PPC experts like Seller Labs Managed Services could help you decide if the items you’re selling benefit from the extra boost of programmatic ads.
Then, if you like the results you’re seeing, it may be worth investing in the managed-service option so that you can step away from ads and let Amazon’s data and experts handle that for you so you can focus elsewhere.
You have more options than you know so don’t just write off Amazon DSP as too expensive or complicated.
Amazon DSP is not for all sellers. DSP works best for brands looking to focus on reaching audiences that aren’t already finding its products in Amazon’s search results. Think cross-channel top-of-funnel brand awareness where interested shoppers might first find your product in search engines, as well as retargeting customers who’ve hinted at interest.
However, if you’re looking to scale up your advertising, it’s certainly an excellent way to cast a wider net (strategically of course) and get in on a type of Amazon advertising that isn’t so crowded (looking at you, Sponsored Products).
Self-service DSP normally charge from 7% to 25% of the clearing price. If you go for managed services, be ready to pay at least 25%.
These are static ads leading back to your Amazon store, product detail page, or custom landing page; dynamic eCommerce ads that can only link to a product detail page; video ads that can run within video content; and the non-skippable full-screen over-the-top (OTT) video ads.
Don’t confuse the Amazon Demand Side Platform with Amazon Delivery Service Partner even though the two have the same acronym. With all the acronyms Amazon throws out there, this was bound to happen sometime.
It differentiates itself from other DSPs out there by using its vast trove of customer data to help advertisers — whether they sell on Amazon or not — reach qualified customers through video and display advertising.
Amazon DSP isn’t your advertising magic bullet, but it is a great scalable complement to what you’re already doing with Amazon Sponsored Ads (PPC), all the while allowing you to target customers using Amazon’s algorithms and deep knowledge of their vast customer base. Best of all, it’s open to all advertisers so you don’t even have to be an Amazon seller to use Amazon DSP.
If your company is ready to take the leap, find out how to optimize your company’s ads all over the web at the Amazon Demand Side Platform site, or, better yet, contact Seller Labs Managed Services for an account audit so you can see all of your options and work on a strategy unique to your brand and business goals.