What is Amazon DSP, How Much Does It Cost, How Does It Differ From Traditional Amazon Ads, and Where Do I Begin?

Amazon DSP (Demand-Side Platform) advertising is a platform that allows advertisers to programmatically buy display, video, and audio ads both on and off Amazon. This platform is especially powerful for brands that sell products on Amazon, but it's also used by advertisers seeking to leverage Amazon's vast data on shopper behavior. Here's a breakdown of its key features:

Targeted Advertising: Amazon DSP enables advertisers to reach audiences across Amazon sites and apps, as well as on partner websites and apps. Advertisers can target based on shopping and browsing behavior, lifestyle, and other demographic data.

Wide Range of Ad Formats: The platform supports various ad formats including display ads (both in static and dynamic forms), video ads, and audio ads. This variety allows for more creative and engaging ways to reach potential customers.

Programmatic Buying: Advertisers use automated, data-driven tools to purchase ad space, ensuring more efficient and effective ad spending. This approach allows for real-time bidding on ad inventory, which can optimize ad spend.

Customizable Campaigns: Advertisers can create customized campaigns that align with their specific goals, such as driving brand awareness, product sales, or customer engagement.

Performance Analytics: Amazon DSP provides detailed analytics and reporting tools. Advertisers can track ad performance, audience reach, and other metrics to measure the success of their campaigns and make informed adjustments.

Access to Amazon’s Rich Data: Perhaps the most significant advantage is the access to Amazon's wealth of consumer data, which includes insights into shopping habits, interests, and preferences. This data enables highly targeted and effective advertising strategies.

What is the Pricing for Amazon DSP?

The answer will depend on the items relevance. We cannot provide an absolute cost, but can discuss how it is calculated.

Programmatic Buying: Amazon DSP uses a programmatic ad buying approach, where advertisers bid for ad space in real-time auctions. This means the cost can vary based on competition, audience targeting, and ad placement.

Cost Metrics: The pricing is often based on CPM (Cost Per Thousand Impressions), meaning advertisers pay a set amount for every 1,000 impressions their ad receives. This differs from the CPC (Cost Per Click) model commonly used in Sponsored Products and Sponsored Brand ads.

Minimum Spend Requirements: Amazon DSP typically has higher minimum spend requirements compared to other Amazon advertising options. This can make it less accessible for smaller advertisers or those with limited budgets.

ROI and ROAS

Comparison with Sponsored Ads:

Sponsored Products and Sponsored Brand ads often have a more direct and immediate impact on sales, as they appear in search results and product pages on Amazon. This directness can lead to a higher and more immediate ROAS, especially for product-specific campaigns.

Broader Reach of DSP:

Amazon DSP, on the other hand, excels in brand awareness and reaching potential customers off-Amazon. This can lead to a different kind of ROI, which might be more long-term and not as immediately measurable as direct sales.

Data and Targeting:

The advanced targeting options and rich data available through DSP can lead to highly effective campaigns. However, measuring ROI might require a more holistic view, including brand lift, customer lifetime value, and other long-term metrics.

Current Trends:

As for the current trends in ROI or ROAS, it's important to note that these metrics can vary widely depending on the industry, target audience, product type, and the specific strategies employed. Additionally, the advertising landscape is dynamic, with frequent changes in consumer behavior, platform algorithms, and competition affecting outcomes.

While Amazon DSP can offer a broader reach and advanced targeting based on Amazon’s rich data, its pricing model and the nature of its ROI/ROAS are different from traditional Amazon Sponsored Products or Sponsored Brand ads. The choice between these platforms should be based on the specific goals of the advertising campaign, budget constraints, and the desired target audience. For the latest trends and specific figures regarding ROI or ROAS, it's advisable to consult recent market studies or Amazon's official resources, as these metrics are continually evolving.

The Marketing Funnel

The marketing funnel is often visualized as a journey that customers go through, from becoming aware of a product or brand (Top of the Funnel) to considering and evaluating it (Middle of the Funnel), and finally making a purchase decision (Bottom of the Funnel). Placement of Amazon Advertising Options in the Funnel

Amazon DSP:

Stage: Primarily targets the Top and Middle of the Funnel.

Purpose: Amazon DSP is used for broader brand awareness and engagement. It excels in reaching potential customers who may not be actively searching for your product but fit the target profile based on their behavior and preferences. This makes it an excellent tool for generating initial interest (awareness) and nurturing that interest (consideration).

Approach: DSP campaigns can utilize display and video ads to tell a brand story, educate the audience about products or services, and engage users who have shown interest in similar products or categories.

Sponsored Products and Brand Ads:

Stage: Primarily target the Bottom of the Funnel

Purpose: These ad types are more focused on driving sales and conversions. They are effective for targeting customers who are already in the buying phase, actively searching for products on Amazon.

Approach: Sponsored Products and Brand ads appear in search results and on product pages, making them highly relevant for users with a clear intent to purchase. They are more about converting existing interest into sales rather than generating new interest.

Integrating DSP with Sponsored Ads in a Funnel Strategy

Complementary Approach:

Ideally, DSP and Sponsored ads should be used in a complementary manner. DSP can be employed to build brand awareness and interest among a broad audience, effectively “filling the funnel” with potential customers. As these customers move down the funnel, becoming more interested and starting to search for products, Sponsored Products and Brand ads can then come into play to capture this interest and drive conversions.

Data and Insights: 

Amazon DSP also provides valuable insights into customer behavior and preferences. These insights can be used to refine and optimize Sponsored Product and Brand ad campaigns.

Amazon DSP is most effective at the top and middle of the funnel, focusing on brand awareness and customer engagement. In contrast, Sponsored Products and Brand ads are more bottom-of-the-funnel tools, geared towards driving sales among customers who are already considering a purchase. Using these tools in tandem can create a more comprehensive funnel strategy, guiding potential customers from initial awareness all the way through to purchase.

How can You Start Using Amazon DSP Today?

To start using Amazon DSP (Demand-Side Platform) ads, you'll need to go through a few steps. Here's a basic outline of the process:

Determine Eligibility and Goals:

Amazon DSP is typically more suitable for brands with a significant advertising budget due to its minimum spend requirements. Consider your advertising goals. DSP is ideal for increasing brand awareness and reaching audiences both on and off Amazon.

Accessing Amazon DSP:

Direct Access: If you have a large advertising budget and the necessary expertise, you can access Amazon DSP directly. This option gives you full control over your campaigns but requires a significant investment in both time and resources.

Amazon Managed Service: If you’re not ready to manage DSP campaigns yourself, Amazon offers a managed-service option. This is where Amazon’s team handles your DSP campaigns. This option might have higher minimum spend requirements.

Contact Amazon:

To get started, you usually need to contact Amazon directly. Visit the Amazon Advertising website and look for information on DSP. There will typically be a contact form or a request for information option.

Account Setup and Onboarding:

Once you’ve made contact, Amazon will guide you through the account setup and onboarding process. This includes setting up your DSP account, understanding the platform, and defining your initial campaign strategies.

Developing a Strategy:

Decide on your targeting options (such as demographic, behavioral, or contextual targeting). Plan your ad formats (display, video, etc.) and creative strategy. Determine your budget and bidding strategy.

Campaign Creation and Launch:

Create your ad campaigns within the DSP platform. Utilize Amazon's data and insights to target your desired audience. Launch your campaigns and monitor their performance.

Ongoing Management and Optimization:

Regularly review the performance of your campaigns. Optimize your bids, targeting, and ad creative based on performance data. Experiment with different strategies to see what works best for your brand.

Seek Expert Advice if Needed:

If you’re new to programmatic advertising or Amazon DSP, consider seeking advice from digital marketing experts or agencies that specialize in Amazon advertising.

Remember, Amazon DSP is a powerful tool, but it's also complex. It's often most effective when used as part of a broader digital marketing strategy. Make sure you have a clear understanding of your marketing goals and how DSP can help you achieve them before diving in.