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Amazon Demand Side Platform (DSP): How to Use Programmatic Advertising on Amazon

Amazon Demand Side Platform (DSP) Advertising

As Amazon becomes more crowded and traditional Amazon advertising becomes more expensive, leading brands are seeking ways to distinguish themselves. One such method is programmatic advertising. In Amazon’s case, this is the Amazon Demand Side Platform or Amazon DSP.

What is Programmatic Advertising?

Programmatic advertising simply means using automation – a program, if you will – to buy and sell ads.

What is Amazon Demand Side Platform (DSP) Advertising?

Amazon DSP is a platform that allows brands to programmatically buy display, video, and audio ads that appear across Amazon’s vast media network.

The greatest value add of Amazon DSP is that it allows advertisers to tap into Amazon’s first-party data. As a shopper on Amazon, every search, view, click, purchase, and review is tracked. This data tracking extends to Amazon’s myriad properties, from their websites and apps (more on that below) to their consumer devices, like Fire TV and Amazon Echo.

In short, Amazon has a wealth of data about how, what, when, and potentially why consumers buy what they buy. While keeping the data anonymous, Amazon DSP allows advertisers to use it for marketing their products.

Do You Have to Sell on Amazon to Use DSP Advertising?

Brands are not required to sell products on Amazon to utilize Amazon DSP. They can use DSP to direct shoppers to their direct website, for example.

As of August 2021, Amazon DSP is available in the following countries:

  • Australia
  • Brazil
  • Canada
  • France
  • Germany
  • India
  • Italy
  • Japan
  • Mexico
  • The Netherlands
  • Saudi Arabia
  • Singapore (coming soon)
  • Spain
  • The United Arab Emirates
  • The United Kingdom
  • The United States

Where do Amazon DSP Ads Appear?

Amazon DSP ads can appear on:

  • Amazon, including on the homepage, Amazon Live page, product detail page, all reviews page, search page, deals page, and thank you page
  • Amazon owned websites, such as Audible, Buy Office Mojo, Goodreads, IMDb, ShopBop, Twitch.tv, and Zappos
  • Amazon owned apps
  • Amazon devices, such as the Amazon Echo, Fire TV, Fire table, and Kindle
  • Affiliate websites and apps in Amazon’s network

Amazon Ad Specs

Amazon’s ad sizes and policies can be found here. This page includes ad specs for Amazon DSP, audio ads, Fire TV, IMDb, Twitch, and a dozen other options.

Targeting Options in Amazon DSP

Unlike traditional Amazon ads that target specific keywords or ASINs within the Amazon marketplace, Amazon DSP ads use Amazon’s first-party customer data to retarget consumers based on demographics, location, interests, categories they previously browsed, previous product views, previous purchases, device type, and more.

Specifically, audience targeting is broken out into six options:

In-Market

Shoppers who have demonstrated high intent to buy within your product subcategory within the past 30 days.

Lifestyle

Shoppers whose search history and previous purchases relate to a particular lifestyle, such as pet owners or outdoor enthusiasts.

Contextual

Shoppers who have recently browsed for products similar to your offerings.

Remarketing

Shoppers who previously searched for, viewed, or purchased your or a competitor’s product.

Audience Lookalike

Shoppers who resemble the demographics and buying behavior of your previous customers.

Advertiser Audiences

Lists that the advertiser provides.

What Ad Types are Available in Amazon DSP?

There are four ad types available currently in Amazon DSP.

1 – Static Ads

Like the name suggests, static ads do not have dynamic elements. These ads feature a simple image and call-to-action. They can direct shoppers to an Amazon product listing, Amazon Brand Store, or your direct website.

homepage ad placement

2 – Dynamic Ads

Dynamic ads are just that – dynamic. The content within the ad is automatically optimized based on the audience. For example, if Amazon has observed a purchasing behavior wherein a shopper is more likely to read customer reviews before purchasing a product, they can serve an ad displaying a customer review.

product detail page ad placement

Dynamic ads can only direct to an Amazon product listing page, so this is not a viable option if you use DSP to promote your direct website.

3 – Video Ads

Convenient that the names for each ad type is self-explanatory, right? Video ads display videos on and off Amazon, and they can direct to your products on Amazon or your direct website.

Source: Amazon

4 – Over-The-Top (OTT)

Okay, this is a slightly less descriptive name. OTT ads are full screen video ads that display on TV sources. Like a typical television commercial, these ads are not clickable. Instead, their purpose is to create awareness and incite shoppers to take action in a separate medium.

Fire TV ad placement
Source: Amazon

What does Amazon DSP Cost?

Amazon DSP requires a minimum total ad budget of $35,000. This minimum budget varies by country. The minimum required ad spend can also be lowered by partnering with an agency that manages a considerably larger monthly ad budget (typically achieved by managing ad spend for multiple clients).

What is the Difference Between Amazon DSP and Sponsored Display Ads?

Amazon also offers Sponsored Display Ads, which share some similarities with Amazon DSP. One of the biggest differences is costs: Amazon DSP comes with a minimum budget of $35,000, while Sponsored Display Ads are a pay-per-click (PPC) ad type just like Sponsored Product Ads and Sponsored Brand Ads. The other big difference is that Sponsored Display Ads are self-service, while Amazon DSP requires management (more on that below).

Amazon Sponsored Display Ads

Sponsored Display Ads target shoppers based on previous engaged with designated ASINs rather than by keywords. These ads can appear on and off the Amazon marketplace. Sponsored Display Ads blur the lines between the Awareness and Consideration stages of the buyer’s journey, inciting interest in shoppers both off and on Amazon. They are a potent tool for retargeting, though they lack the audience targeting and ad placements of DSP.

How to Start Using Amazon DSP Advertising

If you want to launch an Amazon DSP ad campaign, you have two options: self-service or managed-service.

Managed-Service

Under this option, Amazon will manage your DSP ad campaigns for you. The Amazon team provides data, consulting, and an advertising plan (more on that below). To access this option, you must commit at least $35,000 in ad spend.

Self-Service

If you’re able to spend at least $100K per month on DSP, you can access the self-service option. In this model, Amazon does not manage your DSP campaigns, but the name itself is a little misleading, as you still have to work through an authorized agency. The benefits of this model is that, through your Amazon agency, you can exercise greater and more direct control over your DSP campaigns than if an Amazon account manager ran your campaign.

Can Kaspien Manage My Amazon DSP Advertising?

We can! Kaspien has run multiple DSP campaigns successfully for our partner brands. If you’re interested in learning more, please reach out to your account manager or get in touch with us through our contact form.

What to Expect from Your Amazon DSP Plan

When you decide to launch an Amazon DSP ad campaign, an Amazon account manager will be assigned to you (or your agency, if you have an agency manage it for you). The Amazon DSP team will use Amazon’s exclusive first-party data to prepare a report that includes:

Category & Brand Insights

This section may include common concerns for your product category, trends on when shoppers are most active in this category, data related to branded searches, repeat purchase rates, which ad types your top competitors use, and percentage of competitors who run advertising.

Advertising Plan

This section features a detailed DSP advertising plan based on that data, which also includes the opportunity size. The opportunity size may factor in the number of shoppers who have visited your product category, the number of shoppers who visited products similar to yours but not purchased, the number shoppers who visited your product but not purchased, and the number of shoppers who bought your product. Target for customer acquisition and/or average revenue per customer needed in order to hit growth goals.

Recommended Budget to Achieve Designated Goals

The recommended budget is based on the goals you provided and the data/trends the Amazon team discovered in their review. The recommended budget may be broken out by quarters and key holidays/sales events.

Amazon DSP Advertising Case Study

Background

Strider is a leading kids’ toy company known for their revolutionary bikes. We’ve partnered since 2018, steadily growing their Amazon sales. Amid the chaos of 2020, we launched one of our most ambitious Amazon DSP campaigns yet.

Our Strategy

We set two goals for the DSP campaign: Increase new customer acquisition and improve conversion rates for shoppers already familiar with Strider.

To support these goals, we targeted shoppers who had viewed Strider’s or competitors’ listings but not converted. We also used dynamic display ads, which show shoppers the Strider product most relevant to their previous browsing history. The ads appeared on Amazon.com, Amazon devices, Amazon-owned sites like IMDB.com, and affiliate websites and apps.

Our Results

Amazon DSP Advertising Case Study

  • 2,159 units sold
  • $244,000 total sales
  • 4.9 ROAS (compared to the 3.0 ROAS Amazon projected in their plan)
  • 188,000 unique shoppers reached
  • 5.9 million impressions

The campaign successfully brought more shoppers over the finish line and into the Strider family, with 66% of orders coming from shoppers who had previously viewed Strider products, and 84% coming from shoppers who had not previously purchased Strider products on Amazon. The first-time buyers will likely continue to buy from Strider for years to come.

Learn More about Amazon Advertising Strategies

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