Amazon Demand Side Platform (DSP): A Complete Guide

With thousands of online retailers competing with each other, it is getting more challenging by the day to reach and engage potential customers. This is where the Amazon Demand Side Platform (DSP) comes into play. It helps to create brand awareness on and off Amazon through high-quality product display ads and video ads of the available products and services. 

What is Amazon Demand Side Platform (DSP)?

A demand-side platform is a kind of software that enables advertisers to buy advertising placements with the help of automation. Simply, it allows an advertiser to programmatically buy product display, video, and audio ads across popular platforms so that it reaches the target audience. 

Amazon’s DSP functions in a similar way with some highlights:

• The algorithm is created in a way that it automatically selects and bids the best ad placements for the clients. This can happen on and off of Amazon. It helps to programmatically choose ad spaces that fit the client’s budget and help to reach maximum potential customers. The algorithm can also learn as per the customer’s behavior. This helps it to get more and more accurate the longer it is used.  
• Amazon’s DSP is not only confined to Amazon and other properties operated by Amazon. It allows you to put ads all over the web. 
• It allows access to the advertising inventory on Amazon-owned products like the Kindle. This means that it is possible to run OTT ads while someone is using their Kindle. 

Who is Amazon Demand Side Platform (DSP) for?

Advertisers need a service provider or Amazon’s own managed service to access Amazon Demand Side Platform. Sellers who sell on other platforms other than amazon can also access it even though it is an Amazon-owned platform. So Amazon’s DSP is for any seller who want to buy ad spaces with the help of automation to promote their brand. 

What is different about Amazon Demand Side Platform?

The major criteria that make Amazon’s DSP stand out are its data and algorithm. It stores customer information based on their online behavior like history of purchase, searches, affinity towards brand, etc. This data informs brands about what their customers are seeking. They get to adjust their strategies and make well-informed decisions based on it. 

This is how the algorithm evolves to be smarter as the client uses it more frequently. It gets more accurate each time to match the customer profile.  

Types of Amazon Demand Side Platform (DSP) ads

Dynamic Ads

Dynamic ads are a result of Amazon’s growing machine learning capability. These ads can automatically optimize the shows which fit the goal of your campaign. You can also add customer reviews or coupon codes to lead customers toward products on Amazon. However, these ads can only provide links to a product detail page.

Static Ads

Static ads are ads that need specific calls-to-action. These do not have any dynamic elements and are strictly dependent on options like “Shop Now.” These ads can be utilized to attract customers and spread brand awareness. These ads provide links to the product detail page, custom landing page or Amazon storefront. 

Video ads through Amazon Demand Side Platform

Videos have become very apt at reaching out to people and drawing their attention toward a certain product or service. These ads can either be in-stream or out-stream. The ads which play during the video content are known as in-stream videos. On the contrary, in the case of out-stream videos, they act as a part of the display ad.  

Over-the-top video ads (OTT)

These ads can also run on the demand-side platform reaching millions of people. These are non-skippable full-screen ads. The highlight of these ads is that they can target specific Amazon audiences to promote their brands. Unfortunately, it does not directly lead the audience to the product page owing to its non-clickability. 

Amazon Demand Side Platform (DSP) and Ad Targeting

Amazon’s demand-side platform does not use target specific keywords or ASINs to retarget its consumers. Conversely, it uses Amazon’s first-party customer data to obtain information on location, demographics, previously-browsed categories, interests, previously viewed products, previous purchases, types of devices, etc. 

Audience targeting can be categorized into six types.

In-Market Targeting

This type of targeting is done on the basis of shoppers who have demonstrated a high intent to buy within a specific subcategory. It calculates this intent of the past 30 days to narrow down the targeting. 

Lifestyle

This type of targeting is achieved on the basis of the customer’s lifestyle. Lifestyle can be determined according to the shoppers’ search history, previous purchases and previously viewed products. For instance, the lifestyle of a pet owner would demonstrate a different purchase history than that of someone who does not own any pets. 

Contextual

This targeting is done by narrowing down customers who have browsed for similar products to the ones that you are selling. 

Remarketing

This is referred to the kind of marketing where shoppers are targeted according to who previously searched for, viewed, or purchased the seller’s or a competitor’s product.

Audience Lookalike

This targets the customers who exhibit similar demographics and buying behavior as that of the seller’s previous customers. 

Advertiser Audiences

This straightforward targeting strategy only targets the audiences in the lists that the advertiser provides. 

How to Start Using Amazon DSP Advertising 

There are two ways to start using Amazon DSP advertising. 

 Managed-service

This option lets Amazon handle the seller’s DSP ad campaigns for them. Once you contact the Amazon team, they will provide you with necessary data, consultation, and an advertising plan to promote your brand. This option requires the seller to pay at least $35000 to access the ads. 

Self-service

This option is available to sellers who can spend a minimum of $100,000 per month on DSP. This option does not require Amazon to handle your DSP. Contrarily, it is accessed through an authorized agency. This model offers more benefits regarding the amount of control the seller has over the DSP campaigns. The same would not be possible if an Amazon account manager handles the DSP campaigns. 

Difference between Amazon DSP and sponsored display ads

The similarities between Amazon sponsored display ads and Amazon DSP can make it difficult to distinguish one from the other. The major difference between the two is the cost behind the ads. Amazon DSP costs a minimum of $35000. On the other hand, sponsored display ads are pay per click ads. Another difference lies in the management of the two campaigns. Amazon DSP requires professional management whereas sponsored display ads can be run even through self-service. 

What can you get from Amazon Demand Side Platform

Amazon DSP can be a major investment to a seller owing to its high cost and maintenance. Hence, before launching an Amazon DSP ad campaign, one should be clear on what one can expect from it. 

Initially, Amazon will be assigning an Amazon account manager to launch the ad campaign for you. It is the Amazon DSP team’s responsibility to use Amazon’s exclusive first-party data to prepare a report. The report should include the following parts. 

Category and Brand Insights

This part of the report consists of common concerns for the seller’s product category, trends on when shoppers are most active in this category, data related to branded searches, repeat purchase rates, the ad types the seller’s top competitors use, and percentage of competitors who run advertising.

Advertising Plan

This category demonstrates a detailed demand-side platform plan to the seller. It is based on the collected data in the first section. It includes the opportunity size that can calculate the number of customers who have visited the seller’s product category, the number of shoppers who have visited similar products to the seller’s but have not purchased, and the number of shoppers who have bought the seller’s product. 

Recommended Budget

The third section includes the recommended budget by the Amazon team. This budget is set on the basis of the goals that the seller wants to achieve and the data that the Amazon team has discovered through their report. The recommended budget is ideally divided into quarters to match holiday or sales events.

Conclusion

Amazon demand-side platform is not some miracle that promises to create brand awareness for the seller’s brand. Its adaptable algorithm allows the seller to achieve goals that other ad campaigns cannot do. The record of the vast customer base is another game-changer in case of this type of advertising. 

If you think that your company is ready to launch an Amazon DSP ad campaign, check if the campaign’s strategies are compatible with your business first. Compatible businesses can use Amazon Demand Side Platform to exponentially attract more target audiences and achieve widespread brand awareness.