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on October 1, 2021 by Drew Kramer in Marketplaces, Technology & Data

How to Use Amazon DSP in Your Advertising Strategy

Image of people moving around a tablet, monitor, and smartphone with "DSP" on image

When it comes to ecommerce, the customer journey does not follow a cookie-cutter path. Each customer is unique and can enter the purchase cycle at any stage. Some may skip entire stages altogether. Amazon DSP (demand-side platform) allows you to connect your business with customers throughout their shopping experience, giving you the opportunity to increase brand awareness and boost sales.

What is Amazon DSP?

Amazon DSP is a demand-side platform that allows advertisers to automatically purchase and optimize display, video and audio ads on Amazon-owned sites and certain third-party sites.

Simply put, a DSP automatically connects supply and demand for ad space.

When visualizing the marketing and advertising funnel (awareness, consideration, conversion and loyalty), DSP typically takes place at a high level. DSP ads begin by increasing brand awareness then continue to target new and existing audiences at each stage of the buying journey.

What Makes Amazon DSP Unique from Other DSPs?

Unmatched data insights for your ecommerce business

Amazon owns an enormous amount of data that is exclusive to its owned sites. With access to data across dozens of categories, brands using Amazon DSP are able to better understand their customer base. For example, if your brand sells bottled coffee, Amazon can tell you which consumers purchased a competitor’s coffee but haven’t purchased yours so you can target those buyers with ads for your coffee.

Additionally, brands gain accurate insights through attributed ads and conversions even when they don’t occur on the same device. For example, if a customer purchases a product on their mobile device after seeing an ad play on their TV, that sale is attributed to the TV ad. Plus, brands have access to data outside the 14-day attribution window (which is not available to search-based ads).

Exclusive DSP ad inventory on Amazon

Amazon reserves certain ad inventory for its DSP, including Amazon and Fire TV Stick homepages that are not available to other advertisers. This prime advertising real estate allows you to reach customers not only where they shop, but also where they get their news and entertainment.

Where Can Amazon DSP be Used?

There are three options for Amazon DSP placement:

  • Amazon.com
  • Amazon subsidiaries including IMDb, Audible, Twitch, Zappos and more
  • Third-party sites like ESPN.com, CNN.com and Yahoo.com

Amazon DSP provides increased brand visibility by running ads where customers shop and get entertainment, both on and off Amazon.

When in the Advertising Funnel is Amazon DSP Used?

While Amazon DSP is used predominantly at the top of the advertising funnel, it can be used at each stage of the customer journey. Advertisers can build audiences for each stage of the customer journey using segments such as demographics, lifestyle, life events and customers in the market for certain goods.

Image of a tablet with the letters DSP and word "Building awareness"Building brand awareness on Amazon

During the awareness stage, use Amazon DSP to increase brand visibility with audiences who may not be familiar with your products or are not yet ready to purchase. An example of this could be a video ad for your brand’s healthy chips played on an Amazon Fire TV Stick home screen. That viewer may not be ready to purchase chips, but as they get ready to stream their favorite show, they learn about a new healthy snack option, which they may in turn decide to order on their phone while they watch.

Image of a smartphone and the acronym "DSP" and words "Expanding Audiences"Expanding your audiences on Amazon

In the consideration and purchase stages, Amazon DSP can use contextual targeting to pinpoint users who are searching for items relevant to products in your catalog. For example, if a customer is newly searching for and purchasing baby diapers, Amazon can send a signal to a brand that sells baby bottles to indicate they should be targeting that customer who may have recently had a baby. Once that customer is no longer purchasing diapers, a signal will alert the advertiser that the customer can likely be removed from that audience. This function allows advertisers to see overlap with other audiences that your target customers may be a part of. For instance, new parents purchasing baby diapers may also be interested in nutritional foods and supplements.

Image of computer monitor with the acronym "DSP" and the words "Retargeting Customers"Retargeting customers

During the consideration, purchase and loyalty stages, use Amazon DSP to retarget customers. We’ve all experienced interruptions while shopping online. Let’s say a customer is watching TV when they see an ad for your product. They open their Amazon app and view the product detail page, but the phone rings or their kids call them or someone has come to the door. That would-be customer is pulled away from their phone before going through with a purchase. Amazon DSP allows you to target users with ads that serve as reminders to complete the buying process. Additionally, brands can retarget customers who purchased one of your products with details about other products available in your catalog. Lastly, Amazon DSP allows you to retarget customers who have purchased a consumable product to decrease the length of time to their repeat purchase.

How is Amazon DSP Measured?

Amazon DSP measures conversions based on attributed views, whereas search-based advertising is measured by clicks. With DSP, the advertiser is measuring how these views impact search, with both branded and non-branded terms.

While DSP requires a larger budget and typically takes place higher up in the advertising funnel, advertisers are able to target a wider audience to reach the customers who are likely to eventually purchase.

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Who Designs the Ads?

When it comes to designing ads for Amazon DSP, advertisers can either use their own creative assets or use Amazon’s generated assets.

For display ads, we recommend using Amazon-generated displays because they pull information and images from your product listings to create optimized ads that are proven to be effective.

However, for video ads, we recommend that advertisers create their own custom video content. The quality will be higher and the ad will be more effective.

Amazon uses machine learning to analyze and display the most effective ad for your campaign’s goal. The ads are placed in real-time to drive performance. Over time, these analytics tell brands what products to feature and which audiences to target.

How is Amazon DSP Managed?

Advertisers have two options when it comes to managing their Amazon DSP ads: self-service and managed service.

Managed Service Option

With managed service, Amazon manages the DSP on the brand’s behalf. This option is expensive, with a minimum monthly ad spend of $30,000. Amazon is such a large agency that this option leaves little room for customization, so brands receive cookie-cutter service. In fact, Amazon encourages brands to partner with a select number of approved agencies, like WBX Commerce, to manage their DSP ads because the dedicated support yields more effective results.

Self-service Option

Using the self-service option, brands will use a certified Amazon advertising agency like WBX Commerce to manage their DSP. A few large brands manage their DSP in-house, but this is rare and the number of brands doing so is very small. Amazon DSP is not available to all advertisers as seats are limited.

With WBX Commerce, brands can save money (stretching those ad dollars further!), get a tailored advertising strategy and access completely transparent campaign results. Consider partnering with us to reach new customers where they shop and get entertainment. Contact us today!

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