What is Amazon DSP Advertising? A 2023 Guide for Brands!
With millions of Amazon sellers competing for visibility and sales daily, the marketplace can seem like a battlefield to many. Equip yourself with the power of programmatic advertising to reach a broader yet highly specific audience with the Amazon Demand-Side Platform (DSP).
In this article, we will dive into the world of Amazon DSP, a tool that allows brands to programmatically buy audio, video, and display ads across the Amazon advertising network and third-party exchanges. We’ll look into its features, benefits, targeting parameters, pricing, how it compares to Amazon Sponsored Ads, and much more.
Let’s get started!
Amazon DSP (Demand-Side Platform) advertising is a way for businesses to promote their products and services across Amazon-owned and operated sites and apps (as well as those managed by third-party ad exchanges) through display, audio, and video ads. All DSP ads are purchased programmatically.
With Amazon DSP advertising, advertisers can leverage Amazon’s data to target specific audiences based on various criteria, such as demographics, interests, behavior, and more. It also provides multiple targeting options, including the invaluable retargeting tactic to reach out to potential customers who have interacted with your brand previously.
Who can use Amazon DSP ads?
Interestingly, anyone can run Amazon DSP ads for their business, even if they don’t sell on the marketplace. Yes, you read that right - you don’t need to be a native Amazon seller or an ecommerce store owner to take advantage of the advertising option. You are good as long as you have an active business and think that Amazon DSP can help promote your offerings.
Amazon DSP ads are available in all major Amazon-operated regions and marketplaces, including the United States, Canada, United Kingdom, France, Germany, Italy, Spain, Japan, Brazil, Australia, Mexico, the Netherlands, and Singapore.
Amazon DSP ads can appear all across Amazon’s main website, including the homepage, deals page, search results pages, product listings, and more, as well as on Amazon proprietary devices and managed websites and apps. You can even optimize these ads to run on third-party ad exchanges.
Here are some Amazon DSP ad examples:
The mediums (or channels) hosting the DSP audio, video, and display ads together form the Amazon DSP ad inventory. The Amazon Owned and Operated (AZOO) mobile is an example of an ad inventory type available under the DSP platform.
Meanwhile, the specific property (the website or the app) where the ads run is called the supply source. Amazon mobile app, IMDb mobile app, and Whole Foods Market app are all supply source examples for the AZOO mobile ad inventory type.
Here is a more comprehensive list of Amazon DSP ad placement options that advertisers can leverage through the platform:
Amazon DSP Advertising involves programmatic buying of ads through a demand-side platform, which are then served to a targeted group of users matching a pre-specified set of parameters as defined during the campaign setup. The entire match-making process is powered by first-party data that Amazon collects via its various proprietary assets, allowing you to reach out to the right users at the right time.
Additionally, the participating brands are charged on a CPM-based pricing model, where the advertiser must pay for every thousandth successful impression accrued for their ad.
What do you mean by programmatic buying of ads?
Programmatic buying of ads is simply the bidding of ads in real-time. Brands must adjust the price of their ad bids based on the ever-changing competition, availability of ad inventory, time of bidding, etc., to get their ads shown across the Amazon DSP ad network. Thankfully, this process is automated through the demand-side platform technology.
How does Amazon DSP differ from the other, seemingly more popular Amazon advertising option in Sponsored Ads?
Amazon Sponsored Ads collectively refer to Sponsored Products, Sponsored Brands, and Sponsored Display ads. All these three advertising options target customers in different stages of their buying journey.
In contrast, Amazon DSP ads can execute a full-funnel advertising campaign on their own, where you can target customers at each stage of the buying journey–awareness, consideration, purchase, and post-purchase (loyalty)–using different Amazon DSP targeting strategies.
The available Amazon DSP targeting types include:
No other advertising option on Amazon offers such a wide variety of targeting types.
Another key difference between Amazon DSP and Sponsored Ads is their pricing model. As mentioned earlier, Amazon DSP ads are priced on impressions, unlike Sponsored Ads that operate on a pay-per-click (PPC) model.
Furthermore, Amazon DSP ads have a much wider connected ad network than Sponsored Ads. This makes them more penetrative and ever-present than their counterpart.
You also get an additional ad type in audio ads with Amazon DSP. Sponsored Ads don’t have audio ads as part of their inventory. However, you do get display and video ads with the latter set of ads.
Finally, you must be an Amazon seller and enrolled in the Amazon brand registry program to run Sponsored Ads for your store. For Amazon DSP ads, however, there are no such eligibility requirements, and you can sign up for the advertising option even if you don’t sell on Amazon.
While anyone can use Amazon Demand Side Platform, it’s not the right fit for every business. Mostly medium and big brands prefer setting up DSP ads for their business. Make no mistake, DSP campaigns can be quite tricky to manage and optimize.
If you sell on Amazon, we recommend running Amazon DSP ads only when you have maxed out on your other ad options and want to take your advertising performance to the next level.
Having a healthy business and good sales numbers is also important because running DSP ads requires a significant financial commitment, especially if you plan to opt for the managed-service program. You need sufficient capital for that.
Newbie sellers or Amazon store owners with low review counts or selling low-ticket items are better off without Amazon DSP ads.
Amazon DSP ads enable advertisers to reach their target audience both on and off Amazon. And while several other advertising solutions are available out there, the unique Amazon DSP advertising benefits make it a lucrative choice for sellers who want to boost their brand presence and reinforce dominance in their niche.
The cost of running Amazon DSP ads varies with your target region, preferred ad format, and placements. In addition, there is a management fee that you must pay if you decide to opt for the managed-services option, a DSP program only open to sellers having a minimum monthly ad spend of $15,000 (previously $50,000).
Advertisers looking to tap into the potential of Amazon DSP have two options: i) self-service and ii) managed service.
With the self-service option, you fully control your campaigns but need an Amazon DSP-certified ad agency to access the program. It is the cheapest of the two options, where you can expect to spend a minimum $5000 per month. This doesn’t include the fee your agency will charge you, which is usually a fixed percentage of your total ad spend.
The second option is the managed-services program with which you can access Amazon DSP ad inventory under the consultative services from Amazon. However, this service model requires a minimum ad budget of $15,000, which can vary depending on the region.
Most sellers prefer the self-service option as it’s cheaper. If you’re someone who likes a more active approach to managing things, you can also complete the Amazon DSP training course on the Amazon website. That way, you can monitor the work your agency is doing and provide inputs to optimize your campaigns further.
Amazon DSP offers three types of ads to advertisers looking to promote their brand through the advertising platform.
First are display ads. These are banner ads that show up all across the Amazon DSP ad network and are perfect for targeting users in the middle or bottom of the funnel.
Display ads have further ad sub-types, including Dynamic eCommerce ads (DEA) and Responsive eCommerce creatives (REC). Dynamic eCommerce ads are great for showcasing individual products and work with single ASINs only. Meanwhile, RECs are the responsive variants of Dynamic eCommerce ads with the ability to auto-populate backgrounds and images for up to 20 ASINs with a single creative. They are also retail aware, meaning Amazon only shows them to users when your products are in stock.
You can learn more about Amazon DEA and REC ads here.
Next, you have video ads. They work best for driving brand awareness and are more suited to targeting users at the top of the funnel.
There are two kinds of video-based Amazon DSP ad types: i) Streaming TV ads (STV) and ii) online video ads (OLV).
Also known as over-the-top (OTT) video ads, STV ads are non-skippable, non-clickable ads that appear before and during streaming content on streaming services like Fire TV, IMDb TV, etc. With the right messaging that captures the audience’s attention, these Amazon DSP video ads can help increase brand awareness.
Online video ads, on the other hand, are clickable and can direct a user back to a product detail page or the brand’s website. These appear before and during content on websites and apps that are part of Amazon’s advertising network.
Audio ads are 10-to-30-second clips of digital audio advertising content streamed across first and third-party platforms and services. They are found to be most effective for targeting users in the consideration stage and are exclusive to the Amazon Demand Side Platform.
When played on Alexa-enabled devices, audio ads even allow customers to take purchase actions using the voice command, bringing an element of interactivity to your DSP audio ad campaigns.
Now that you have a grip on what Amazon DSP is and the wealth of advertising opportunities it offers, let’s look into how you can get started with the platform.
As mentioned earlier, you have two options available when signing up for Amazon DSP, i) self-service and ii) managed service. Visit the Amazon advertising homepage if you want to opt for the latter.
If you want to go with the self-service option (and that’s what this tutorial will focus on, moving forward) - find a DSP-certified agency, and they’ll help you secure the Amazon DSP login access. We have some agency recommendations at the end of the blog that might interest you.
Log in to your Amazon DSP console and set yourself up as the new advertiser if your agency hasn't already done so. To perform this step, navigate to the Entity view from the left of your screen and click on the New Advertiser button. A form will open up. Enter all the required information and then click save. You will see a pending status until the new advertiser request is approved. Amazon usually takes two business days to review and approve your request.
Important: The Amazon DSP console is organized into different hierarchical views. Each view shows you information on a particular level.
Once your advertiser request is approved, you can start creating new orders (campaigns). Here is the information you need to specify to create a new order:
Amazon DSP is a powerful tool that you can use to execute a full-funnel advertising strategy. However, this doesn’t mean you should go in all rudderless. Having clear goals and an understanding of what you want to achieve will directly impact the return you get on your ad spend. The different DSP ad types, inventory options, and targeting tactics can be quite specific in terms of driving the results.
Generally speaking, brands utilize Amazon DSP ads to achieve any of the following advertising goals:
Choose a goal and a KPI that best aligns with your goal from inside the Order settings.
Next, specify the budget and delivery settings for your order. There is an option to enable automated optimization of budget spending based on the performance of eligible line items. Work out your order budget and select whether you’d like to cap it daily or monthly. You can also leave the budget uncapped.
When selecting a bid strategy for your campaign, it is important to choose the one that suits your goals.
"While spending full budget, maximize performance" is a bid strategy recommended for better campaign pacing. With this strategy, the campaign adjusts bids to ensure you get the most out of your budget while delivering optimal impressions and conversions. The primary bid control here is the Max bid, which is the maximum amount you are willing to pay for an impression.
Another option is the Maximize performance bid strategy. Here, the base bid is the primary bid control. This bid strategy aims to maximize performance without considering budget constraints and may result in faster budget depletion if your campaign is not properly optimized.
After you’re done creating your order, it’s time to set up line items. What are line items, you ask? Think of them as ad groups. They give you access to different ad inventory types, targeting devices, audience types, and targeting options.
Start by providing basic info, like name, flight dates and time, product categories, etc., for your line item. Next, input targeting settings. Here are the primary targeting setting options available to Amazon DSP advertisers who want to create a robust targeting strategy for their line item:
With Amazon DSP, you can use pre-built Amazon audiences or define a custom audience based on shopping interactions with your products or related products on Amazon. Following is a list of all the audience types you can reach with Amazon DSP:
Finally, upload your creatives and assign them to your line items. Amazon DSP has some general creative guidelines that all ad types must adhere to, such as having a brand logo, product image, a clear CTA, etc.
After the creatives have been uploaded with appropriate Amazon DSP ad specs, the approval process begins. This usually takes 24 hours, but for Mobile O&O, the process may take up to 5 business days.
Once your creatives are approved and assigned to the appropriate line items, your campaign is ready to go live.
Amazon DSP provides different performance metrics to help advertisers monitor their ad campaigns and make informed optimization decisions.
Some of the key performance metrics you should track for your DSP ad campaigns include:
These metrics can be tracked using pre-available performance reports inside the Amazon DSP console. Some popular DSP reports include the All data report, Audience segmentation report, Deal report, and the Retail insights report.
Custom reports can also be created and easily extracted in CSV, XLS, PPT, and other file formats using the Amazon DSP API for reporting.
The Amazon DSP attribution lookback window is pre-set at 14 days, where any conversion (product detail page views, purchases, adding items to shopping carts, etc.) is attributed to the last event that took place within the closed loop. However, clicks trump ad views when deciding on the last touch point for a particular conversion event. This is a default setting for all ads purchased through the Amazon Demand Side Platform.
Yes, Amazon DSP can be profitable for businesses willing to use data-driven targeting strategies to reach high-intent customers and achieve better results in terms of brand awareness, sales, and ROAS.
Here are a few Amazon DSP case studies that demonstrate the platform’s potential:
Partnering with the right agency can help you with your DSP advertising efforts, especially if you plan to go with the self-service option. Below are some top recommendations worth checking out. Please note this is not an endorsement, and you must do your due diligence before hiring an Amazon-certified agency for your DSP campaign. Every seller has different needs and requirements.
To put it all together, Amazon DSP is a powerful platform to reach Amazon's vast user base through programmatic advertising. With its sophisticated targeting options and access to first-party data, you can create highly-targeted campaigns that help you drive awareness, consideration, and conversions for your brand. And while the platform can be complex and require a learning curve, businesses can work with certified agencies or take advantage of Amazon's Ad support to get the most out of their campaigns.
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