Amazon DSP: Understanding Demand Side Platform Advertising [2020]

Why You Should Consider Using the Amazon Demand Side Platform

Online sellers are always looking for new and exciting ways to reach potential buyers. High-quality 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 business? Let’s explore.

What Exactly is the Amazon Demand Side Platform?

First off, a demand side platform is software that allows an advertiser to search and buy advertising placements across many platforms all over the internet. This could include display ads on a popular news website or video ads in a mobile app, just to start. Honestly, there are countless possibilities.

Amazon’s DSP (easily the most-misunderstood component of Amazon’s growing advertising portfolio) 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.

Best of all, the process is programmatic, meaning that with DSP, 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 and on other properties owned and operated by Amazon (a power example being 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.

By the way, 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.

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, 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

Amazon DSP’s main attraction is that it can use Amazon’s deep well of data on customer behavior to target ads. Honestly, there is no deeper well of consumer knowledge than Amazon’s. Harnessing that powerful knowledge, Amazon DSP provides six targeting options:

  • Behavioral Targeting hones in on customers who have shown behaviors such as browsing around your 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 web 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.

While self-service is controlled by you, the process is still programmatic. You’ll simply be more involved with the bidding process, including setting prices, choosing which landing pages to advertise on, and your ideal audience. 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.

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?

Isn’t This Just Amazon 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.

Sponsored Display lets you get an ad up and running on Amazon and off-site quickly, letting you choose the audience, price points, and other aspects of the campaign. However, Sponsored Display is focused on retargeting and is more restrictive than Amazon DSP. 

The barrier to entry for Amazon Sponsored Display Ads is lower (and the list of capabilities smaller) than that of DSP. First, you must qualify for and be enrolled in Amazon Brand Registry. 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. This platform lends itself to Amazon sellers who know their audiences are ready to roll and re-roll on the same ads.

DSP is different because it’s available to every seller, Amazon or non-Amazon. Amazon DSP sends viewers to your website, not your Amazon product listing or brand page. Therefore, Amazon DSP is for a much larger audience, ready to take their advertising to the next level across the web.

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 Ignite for Amazon Advertising 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, 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 PPC experts like Seller Labs Managed Services). This 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.

Again, 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. Think cross-channel top-of-funnel awareness where interested shoppers might first find your product, 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).

Final Thoughts

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.

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