Amazon DSP 101: Beginners Guide to Understanding Amazon’s Demand-side Platform

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;

• 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).

• 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.