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Please note this is an older article. We advise you to check out the 2022 version here.
Amazon Demand-side Platform (DSP) is a Display Advertising Platform that allows us to programmatically reach relevant audiences on Amazon sites and apps as well as publishing partners on third-party exchanges. Before we dive into DSP it’s important to understand some of the fundamentals of programmatic advertising.
Programmatic Ads
Programmatic advertising is the programmatic buying and selling of digital advertising placements. Programmatic advertising uses pricing based on a dynamic Cost per Thousand (CPM) model. Unlike a fixed CPM, dynamic CPM allows advertisers to adjust the price of their bids, as this may fluctuate based on the worth of the impression towards the campaign’s goal. This technology allows advertisers to gain efficiencies with regard to optimizing their campaign budgets. Some of the unique features of programmatic advertisements are:
- The buying process is automated
- Supply is generally not guaranteed (competition affects price)
- Advertisers bid on impressions in real-time to deliver an ad to a specific audience
- Pricing is based on a dynamic pricing model
A major benefit of programmatic advertising is the increase in efficiency by allowing advertisers to serve impression at the right time, to the right audience, cutting down on ad waste.
Amazon’s Edge
Amazon has billions of observed shopping and media consumptions patterns. Consider Amazon is the largest ecommerce platform in the US generating 50% of all ecommerce sales and 5% of total US retail. As of 2018, 95 million Americans have a Prime Membership that spend roughly $1.4K per year on average.
Amazon has the largest database of online shoppers in all stages of the customer journey across hundreds of retail categories. Amazon is building a way to easily integrate data into multi-touch experience that allows marketers to better define segments and target potential customers through an omni-channel approach which is dramatically different than Google or Facebook.
Amazon’s data is based on known shopping history. It tracks behavior at the bottom of the funnel because of the nature of the platform as opposed to Google which uses Browser data and Facebook which uses social data i.e. likes and shares. This is the true value behind Amazon DSP.
Leveraging DSP
DSP gives us the ability to drive awareness across the buyer's journey. We can drive awareness through lookalike, lifestyle, in-market, retargeting and remarketing audiences using various methods of retargeting and data collection through Amazon.
We have two basic strategies we can leverage on DSP when considering a media buy. This would be a Brand Awareness strategy or a Sales Driven strategy. Both have their advantages;
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A Brand Awareness strategy focuses on exposure metrics. These ad buys are for customers that want to expose a larger audience. We judge performance based on impressions, click-throughs and Detail Page Views (DPV).
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A Sales Driven strategy is focused on Return on Ad Spend (ROAS). These ad buys focus on retargeting potential customers, remarketing to existing customers and targeting in-market customers. We judge performance based on ROAS.
Amazon DSP provides in depth customer data allowing us to drive awareness and Return on Ad Spend (ROAS) at each phase of the customer journey. Amazon’s Display Network offers the following advantages:
- Strategic targeting: reach Amazon shoppers based on past behavior or interests, demographic segments and more
- Ad Inventory: Display on Amazon webpages and around the web for discovery, and on competitor product pages in consideration phase
- Loyalty: remarket to past customers
- Full funnel tracking and reporting to validate ROI
- According to Amazon, 10X more high-intent shoppers can be reached with display advertising versus PPC alone
[Free Resource] The Amazon DSP Checklist
Grow Brand Awareness Now
This free PDF will give you a thorough explanation of Amazon DSP and how to align it strategically with your brand goals. And in addition to our DSP checklist & best practices, we’ve also included a DSP case study from one of our clients here at Bobsled.
Ad Types & Targeting
DSP ads appear in the following forms:
Desktop & Mobile Display Ads
Reach and target customers with high-quality display ads on all of their devices.
Dynamic Ecommerce Ads
Dynamically optimize to specific shopper behavior based upon previous buying behavior.
Mobile Interstitial Ads
Full screen ads served inside mobile apps during natural transition points.
In-stream Video Ads
5+ second in-stream and out-stream video ads.
We have the following targeting options:
- Pixel Based
Shoppers who visit your brand’s website
- Product Remarketing
Retarget shoppers who viewed your promoted products but didn’t convert
- Brand Halo Remarketing
Retarget shoppers who viewed other products of your brand
- Similar Product Remarketing
Reach shoppers browsing products similar to yours
In addition, you can add in layers in for more granular targeting. These include:
- Contextual (content of the website)
- Demographic (M/F, age, income, education)
- Geographic (zip code)
- Time of Day (by the hour)
- Other (device type, browser, etc.)
Conclusion
Amazon DSP is for advertisers who want to increase exposure and the brand halo effect that results from increase sales on Amazon. DSP is a tool that is not for everyone. You should be a brand owner, have decent margins and a solid online presence. Keep in mind that we are targeting customers higher up in the sales funnel who are conducting other media based activity outside of shopping. This is a great opportunity to beef up branding, introduce or remind customers of your products and pull traffic from other sources in an efficient manner using programmatic principles.
Still not sure if Amazon DSP is the right choice for your brand?
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Tagged: Amazon Display Advertising, DSP
