Amazon DSP: What is it and When Should You Consider a DSP Campaign?
Reaching shoppers with the right message at the right time is becoming extremely complex as we continue to face big shifts in consumer buying patterns.
The challenge is that every brand is also trying to do more with less and there’s no room in the budget to waste on ineffective tactics.
100+ years ago, legendary marketer John Wanamaker famously said...
We’ve chipped away at that percentage of waste over the years, but in 2018, the average marketer was still saying that nearly 26% of their budget was wasted on ineffective channels and strategies (source).
With the tools available to us today, none of us are settling for even 26% of waste in 2023. We’re all heavily scrutinizing our budgets and refining our tactics as the economic realities of our post-COVID era continue to come into focus.
That’s why recognizing the right and best use of an ad tool like Amazon’s Demand-Side Platform (DSP) is so important.
A great tool like Amazon DSP comes with added cost and can waste a significant amount of budget if you’re using the wrong approach or implementing the right approach but within the wrong strategy.
This blog post is intended to help you approach Amazon DSP in the right way. We’ll cover the basics of what Amazon DSP is, how it is different from Sponsored Ad tools (specifically Sponsored Display), and when you can utilize it to create the impact you need.
It’s not a complete “how-to” guide for Amazon DSP, mostly because each brand will need to use it differently within a broader full-funnel strategy designed around their goals and priorities. If you’re ready to chat through that level of detail about Amazon DSP, connect with us to talk more.
For the rest of us, let’s start with the basics.
What is Amazon Demand-Side Platform (DSP)?
Amazon isn’t the inventor of DSP, but it is a master of it.
A demand-side platform (DSP) is an automated platform for purchasing digital ad inventory where advertisers and agencies can access a range of options. These may include banner ads on websites, mobile ads on apps and the mobile web, and in-stream video ads.
The key word here is “automated.” Before purchasing was automated, the ad inventory was sold person to person. The process was incredibly inefficient, but worse than that, the best sales teams couldn’t sell all the inventory. Then, in 2006, we saw the first use of automated ad-buying from a DSP:
Amazon’s DSP program launched 12 years later in 2018. It quickly became a leading DSP because its ecosystem provided both the ad inventory and incredibly sophisticated audience data.
But Amazon DSP isn’t the only option for advertisers. According to Gartner’s Peer Insights, the top DSPs competing with Amazon DSP are:
Meta for Business
The Trade Desk
Google Campaign Manager 360
Adform
Adobe Advertising Cloud
Criteo Dynamic Retargeting
MediaMath
Innovid
So, why choose Amazon DSP?
It all comes down to data. The more sophisticated the data, the better the targeting and the greater efficiency of spend.
Since Amazon is a leading global online retailer, Amazon DSP includes first-party data that highlights both trends and authentic purchasing data. All other DSPs are lacking that authentic purchasing data that Amazon has in droves. For instance, when compared to Google’s DSP...
What is the difference between Sponsored Display and Amazon DSP?
In short, DSP provides more sophisticated targeting to create a more extensive and specific reach, which can translate to a bigger impact on key audiences.
Sponsored Display within Sponsored Ads can help you utilize some basic levels of display advertising to engage new audiences or re-engage audiences both on and off Amazon. Since Sponsored Display doesn’t require as high of an investment, it’s a good opportunity for an advertiser to do some exploration and find out which products perform best within display advertising.
But once you have the insight and confidence in your top-performing ASINs, Amazon DSP’s advanced targeting can help take that impact to the next level.
Since the strength of DSP is in its targeting data, the success of your campaign will be tied to how well you define your target audiences and understand why you’re targeting them in the first place. Here’s a look at some of the targeting options broken out by their greatest impact on the customer journey from upper funnel to bottom funnel:
Upper-funnel targeting options include:
Behavioral
Lifestyle
Demographic
Device
Audience Lookalike
Mid-funnel targeting options include:
In-Market
Contextual
Bottom-of-funnel targeting options include:
Remarketing, which includes options like:
Pixel-based Remarketing
Visited or Purchased ASIN Remarketing
Similar Product Remarketing
Is Amazon DSP worth it if you’re investing heavily in Sponsored Ads?
The question isn’t, “Sponsored Ads OR Amazon DSP?” The either/or approach is too simplistic, especially since the consumer journey is only getting more complicated.
The better question is...
“What’s the right combination of Sponsored Ads and Amazon DSP?”
Here’s a visual that illustrates how Amazon ad tools can complement each other across the consumer journey:
By building a full-funnel ad strategy that utilizes the entire suite of ad products available, you’re able to stay in front of your target audiences across any stage of the consumer journey.
What’s the right combination? That depends on your goals. The “one-size-fits-all" approach is what creates waste in your ad budget and we’re not going back to Wanamaker’s days of 50% of wasted spend. If you need help creating that customized combination for your brand, contact us to chat more.
When Should You Consider Amazon DSP?
With a tool like Amazon DSP, think about specific goals that it can help you achieve. Here are two examples that show how best to use DSP to create the impact you need.
“I want to drive incremental traffic beyond search results.”
Amazon DSP is ideal for prospecting campaigns, especially if you’re finding yourself facing one of these three common scenarios:
You have an expensive cost per click (CPC) in search. Your CPC in category/competitor campaigns is expensive, so you’re looking for less costly ways to drive traffic aside from Sponsored Ad campaigns.
You’re already dominating share of voice (SOV) in your category. If you have 60-70% of the current market share, the only way to drive growth is to utilize mid and upper-funnel tactics that bring new customers into the category.
You’ve identified your top ASINs with the best conversion rate (CVR). Once you have one or more products with strong conversion rates across both search and retail data, you’ll know they have the best chance of holding those rates even when driving incremental traffic.
“I want to maximize conversion.”
Beyond prospecting, Amazon DSP is a great resource for retargeting consumers who have visited your product detail pages (PDPs) but did not convert, have a proven history of shopping your category, or have purchased from your brand before. Amazon DSP can retarget consumers for things like...
Converting new-to-brand (NTB) traffic. If you’re prioritizing consideration campaigns, Amazon DSP can help retarget your audiences (i.e. - consumers who shop your category) to stay in front of them and help maximize NTB conversions.
Increasing loyalty. If your brand wants to encourage repeat purchases or increase subscribe and save rates (SNS), you can utilize DSP to retarget past purchasers around the time when they would rebuy.
Support product launches. If your brand is launching a new product, you can utilize DSP to build awareness with past purchasers and cross-sell it with products they are already familiar with.
The right and best use of Amazon DSP requires customization.
Amazon DSP is such a powerful tool because it is so sophisticated, and it requires an equally sophisticated approach. That translates into “customization.” Your brand needs a customized DSP approach that seamlessly operates within a full-funnel strategy designed to drive your goals and objectives.
Our strength is in crafting and executing that full-funnel strategy, utilizing Amazon DSP in concert with other high-impact tools to elevate performance and reduce waste along the way. If you’re looking for an agency to help with your full-funnel strategy, click the contact button below.