Unlocking the Power of Amazon’s Demand Side Platform

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Unlocking the Power of Amazon’s Demand Side Platform

E-commerce brands relying on Direct-to-Consumer efforts to reach customers can still benefit from Amazon advertising that reaches shoppers beyond the marketplace. Amazon’s Demand Side Platform enables companies to create video or display ad campaigns that leverage the system’s vast audience and data collection but can direct targeted customers to any website the brand chooses. 

Of course, Amazon advertising is a crucial factor in winning on the platform. Therefore, it is essential to explore the benefits of the Demand Side Platform and how it can enhance the brand’s reach beyond the marketplace. In the following article, we will delve into the features of Amazon’s Demand Side Platform and how it can serve as a powerful tool to expand the brand’s customer base.

What is Amazon’s Demand Side Platform?

Initially known as the Amazon Advertising Platform (AAP), the Amazon Demand Side Platform (DSP) has gained popularity in the online advertising industry due to its ability to automate buying and selling online advertising. Thanks to this programmatic approach, advertisers and media buying agencies can automatically bid on various types of ad inventory, including product display ads, video, mobile, and search ads.

Amazon’s Demand Side Platform is similar to those of other companies, such as Google and Adobe, and is intended to attract high-volume advertisers looking for a programmatic digital media campaign. A DSP’s flexibility and broad reach can be an effective and budget-friendly method for brands with significant advertising budgets and a clear understanding of their target audience to enhance awareness and increase sales.

Amazon DSP can help grow your brand

While Amazon DSP offers several benefits to its users, it may not be the best fit for every e-commerce brand. To determine if this service suits your company, it is essential to understand precisely what it offers.

First, Amazon DSP provides extensive reach as its ad inventory penetrates beyond the Amazon marketplace. This means that ads purchased via Amazon DSP can appear on Amazon-owned websites such as IMBd or Twitch, on Amazon devices like the Kindle or Fire tablet, on Amazon.com, and on any other third-party websites that are part of the Amazon DSP network.

Moreover, Amazon DSP provides remarkable targeting options. The popularity of the Amazon marketplace enables the company to collect a vast amount of data on the characteristics and habits of millions of users. This information helps brands target prospective customers that match specific profiles. Amazon DSP campaigns can be targeted based on demographics, geographic locations, lifestyle, product interests, actions taken on Amazon, and more.

As a leader in DSP, Amazon also prioritizes protection for your brand when participating in programmatic advertising. The company ensures that the ad space inventory is limited to high-quality websites that won’t put its advertisers’ brands at risk with questionable content or flawed traffic. You can also expect the same commitment regarding ad viewability and dashboard reliability.

Finally, Amazon DSP provides deep data reporting to its advertisers, allowing them to manually or automatically adjust campaigns and optimize their performance. The insights provided can reveal ways to refine targeting, improve creative designs, and tweak bid strategies to maximize budgets. Additionally, the data can be used to upgrade other areas of a brand’s marketing efforts thanks to the valuable details about customers that it can reveal.

Amazon DSP and Sponsored Display can work together

While they are sometimes confused, Amazon DSP and Amazon Sponsored Display are distinct advertising options and cannot be used interchangeably. However, they share some similarities, such as utilizing Amazon’s vast database of consumer data to assist brands in reaching customers through display advertising across the internet. They also offer similar targeting options. Nevertheless, there are significant differences between them.

Amazon Sponsored Display is limited to product display and sponsored brand ads that promote an Amazon seller, directing traffic only to the Amazon platform. Conversely, Amazon DSP is open to any company looking to leverage Amazon’s data and ad inventory, and its ads can direct users to any website, not just an Amazon listing.

Amazon DSP is primarily geared toward brands looking to invest significant money in their digital ad campaigns. While Sponsored Display ads can be purchased for as little as $1, the minimum ad spend for a managed Amazon DSP campaign is $35,000. Additionally, the pricing models used for the two approaches differ.

Unlike Sponsored Display, which only allows limited customization based on templates built from an Amazon listing, Amazon DSP advertisers can design their ad creative, incorporating their logo, copy, and image.

While both Sponsored Display and DSP offer targeting options, Amazon DSP’s targeting capabilities are much more detailed. Sponsored Display ads rely on choosing from a limited number of pre-designed Amazon approaches, while an Amazon DSP campaign can be created from scratch using all available customer data on Amazon.

Amazon DSP is open to most brands

As previously stated, any brand can utilize Amazon DSP, even if they don’t sell products on the Amazon platform. However, there are a few requirements that a company must meet, in addition to the minimum budget, to use Amazon DSP. In most cases, these requirements reflect Amazon’s general advertising standards.

Many brands that use Amazon DSP typically work with a marketing agency or an Amazon service provider to help them navigate the process. Due to the high cost of entry, having some knowledge and experience before starting a campaign is highly recommended. While continual assessment and optimization benefit all campaigns, beginning with a solid foundation is crucial.

Since Amazon DSP isn’t limited to directing traffic solely to an Amazon listing, it might be best suited for companies that aren’t exclusively dependent on Amazon for all their sales. For instance, a business with an independent e-commerce store can use DSP to attract Amazon shoppers to their websites and enhance sales without sharing any revenue with Amazon.

Amazon DSP offers extensive ad-targeting options

Amazon DSP offers advertisers a unique advantage in digital marketing by providing the ability to target ads to specific audiences. This is made possible through Amazon’s vast user activity and demographic data database. There are several ways that potential customers can be targeted:

Contextual Targeting: Identifies shoppers who are actively viewing specified products that are related to your brand.

In-Market Targeting: Segments shoppers who have recently purchased or considered purchasing an Amazon product within one of the platform’s specified product categories.

Lifestyle Targeting: Uses search and purchasing habits to identify shoppers who fall into certain lifestyle groups, such as outdoor enthusiasts or foodies. 

Remarketing: A popular method of displaying ads promoting a product to people who have recently searched for, viewed or purchased that product. 

Audience Lookalike Targeting: Focuses on prospects who share demographic characteristics and online behaviors with a brand’s existing customers.

Advertiser Audience Targeting: Amazon DSP advertisers can upload a list of customers they want to target, such as those who have opted into communications with the company or provided their contact information. 

With Amazon DSP, you pay per impression, not per click 

Amazon DSP uses a Cost per Mille (CPM) pricing model, which differs from Amazon Sponsored Display’s Pay Per Click (PPC) pricing structure. Under CPM, advertisers are charged based on the average cost of delivering 1,000 impressions of their ad, while PPC charges advertisers for each click on their Amazon ad.

While CPM and PPC have different benefits, paying for impressions can be advantageous for campaigns with high click-through conversion rates and focus more on building brand awareness rather than driving traffic to a specific website.

However, just like PPC campaigns, Amazon DSP’s CPM pricing uses an automated bidding process to sell ad inventory. Advertisers must upload their ads and specify their targeting criteria, after which they must select a maximum bid amount for the campaign. This bid amount determines which ad is shown to the ideal audience when they visit a site. Successfully balancing costs and reach through a well-optimized bid strategy requires careful consideration and familiarity with online advertising.

Choose the correct type of DSP ad for your products

Amazon DSP offers a great deal of flexibility in terms of ad design. The Amazon marketing service allows full customization of ad appearance and offers various ad types to maximize the ad budget and ensure potential customers see the most compelling ad versions.

Dynamic eCommerce Ads (DEA) can be used by Amazon DSP advertisers to showcase individual products. The ads are generated by selecting an ASIN that links the shopper to the corresponding product detail page. Amazon automatically selects which version of this ad to display based on the campaign goal.

  • Responsive eCommerce creatives (REC) are Amazon ads featuring Amazon products. Advertisers can create multiple sizes and promote up to 20 ASINs simultaneously using a single process.
  • eCommerce Custom Image upgrades DEA and REC ads by adding custom images, fonts, or copy that enhance the advertiser’s brand and differentiate from a standard Amazon-created version.
  • Custom image creative allows advertisers to use brand-specific design, layout, and copy, rather than pulling content from a product detail page. These ads do not need to link back to an Amazon listing but can drive traffic to a custom landing page, proprietary e-commerce site or Amazon Storefront.
  • Video ads are also part of Amazon DSP’s inventory of placements. Advertisers can promote products using online video ads that reach internet users as they browse or streaming TV ads that are integrated into streamed content.

A partner can make Amazon DSP more manageable

Brands can pursue an Amazon DSP campaign with two options available to them. One way is to enter into a Managed-Service agreement with Amazon, where Amazon handles the strategy, execution, and optimization of the campaign. However, this option requires a 15 percent management fee and a minimum ad spend of $35,000. Brands may also have limited access to real-time reporting and receive only a final report on the campaign.

Alternatively, Amazon DSP also offers a Self-Service option for brands that can spend up to $100,000 monthly on the platform. This option is often pursued through authorized Amazon marketing agencies that meet the minimum spend by working with multiple advertisers. These agencies may charge a management fee below Amazon’s 15 percent option, and accessing the self-service option through them or a significant ad commitment puts brands in complete control of their Amazon DSP campaigns.

Expand your reach with Amify

Contact Amify today and let our team of experts introduce you to more innovative ways of unlocking Amazon growth for your business. 

From digital marketing to fulfillment to data analysis, we can help you reach your goals. Get started with a free consultation today.

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