Amazon is a key player in the eCommerce industry. The platform has made a mark with its innovative technologies that have revolutionized eCommerce selling, marketing, and advertising.
Staying true to its legacy, the retail giant does not only work to empower its native sellers. Amazon strives to uplift eCommerce as an industry with its innovations.
Among Amazon’s latest innovations is the platform’s DSP advertising system. This sophisticated system is available for native Amazon and non-amazon sellers alike, to help them run more powerful ad campaigns and generate better results.
But helpful as it may be, understanding Amazon DSP can be a challenge.
Therefore, in this post, we will deconstruct Amazon DSP for you. By the end of it, you should be able to understand Amazon DSP, its ad types, targeting options, and whether you should adopt this advertisement approach.
What is Amazon DSP?
The global programmatic ad spend is around 493 billion USD. And it is growing at 18% annually. How could have Amazon stayed behind on ad-tech bursting with such potential?
Amazon DSP, or demand site platform, is Amazon’s internal programmatic advertising system. It pairs Amazon’s extensive customer database with programmatic advertising. In this way, this system helps brands serve highly targeted ads on and off Amazon.
Amazon DSP’s ad inventory is diverse. It includes space within Amazon, on Amazon-owned and operated websites, as well as other third-party websites and OTT platforms.
Amazon DSP differs from Sponsored ads. This advertising system is available to sellers both on and off Amazon. That means you can benefit from Amazon’s sophisticated advertisement technology even if you don’t sell on the platform.
Amazon DSP Ad Types
Just like Amazon PPC or Sponsored ads, there are various types of ads that you can create and run through Amazon DSP. These ads include:
Dynamic eCommerce Ads
Dynamic ads are exactly as the name suggests. Dynamic. These ads are customized based on who they are being served to. The ad creatives and elements automatically adapt according to what appeals to each viewer.
For example, if a prospect is known to be moved by customer reviews, the ad will show the product’s star rating. If, however, the customer is more inclined towards price and other details, the ad will include all the essential information the customer would like to know.
These ads, when clicked on, lead to the product details page only. That means they can only be used by Amazon-native sellers.
Responsive Ads
Responsive eCommerce ads helps advertisers auto-create ads and include up to 20 products per ad creative. It also automatically skips the rendering of products that have gone out of stock.
Static Ads
Does the name give away what these ads are? It must.
Static ads, unlike dynamic ads, don’t adapt to the viewer’s discrete behavior. Their creatives remain the same regardless of who the ad is being served to.
These ads may link to your Amazon store, product detail page, or website. So static DSP ads can be used by non-Amazon sellers as well.
Video Ads
68% of digital viewers prefer to learn about new products or services through videos. Amazon DSP video ads enable you to reach the right people at the right time through the right type of content.
OLV or online video DSP ads are short ads that can channel traffic to your Amazon product page or website. These ads may appear on and off Amazon in in-stream and out-stream formats.
OTT Video or Streaming TV Ads
More and more people are switching to OTT devices every day. Amazon allows you to maximize your ad reach by displaying ads within streaming TV content through OTT ads.
These ads are similar to TV commercials. They are non-skippable and non-clickable. But unlike TV commercials, they are targeted. So, they appear for the right people at the right time, helping brands take their message to the right audience.
Targeting Options for Amazon DSP
One of the key reasons why Amazon DSP is better than all other DSPs combined is its powerful targeting capabilities.
These targeting capabilities stem from Amazon’s extensive first-party audience data that it collects from billions of its users.
Amazon DSP ads are not keyword targeted. You select an audience segment. And then, Amazon targets that audience segment with the ads of your choice.
Amazon DSP has the following targeting options through which you can segment, select, and reach a particular audience:
Lifestyle Targeting
Lifestyle targeting segments people based on their interests, habits, and buying behaviors and serves ads accordingly.
For example, if you sell yoga mats, you would want to target people who have a healthy, fitness-focused lifestyle. In this case, your ads will be served to people who have shown interest in gym equipment, fitness bands, supplements, and other wellness-related products.
These ads are excellent for sellers looking to drive brand or product awareness.
In-market Targeting
In-market targeting takes your ads to people “in the market” for a product similar to what you are selling. In-market targeting is the preferred choice for sellers looking to reach customers who are in the consideration phase of the buying journey.
For example, Pampers, a well-known diaper brand, was looking to reinforce its brand as the go-to choice for parents shopping for diapers. They worked with Amazon to serve DSP ads to people in the market looking for diapers and similar products.
As a result, the brand managed to hit the right consideration phase metrics. Their detailed page view rate increased 4 times, and the brand saw a 20% lift in its daily attribute glance views.
More numbers from Pampers DSP campaign results:
Demographic Targeting
Amazon DSP ads can also be targeted based on demographic data. You can define your audience segment based on age, gender, marital status, income, education, etc.
Remarketing
Retargeting can increase conversion rates by as much as 150%. Many times customers leave your Amazon store without buying anything. Amazon DSP helps you reengage these customers by serving remarketing ads to people who have shown interest in your brand or products.
Audience Look-alike
You can also identify people with characteristics, behaviors, and demographics similar to your target audience and segment and target them using Amazon DSP ads.
Advertiser Audience
You know Amazon DSP is available to non-Amazon sellers. To facilitate these sellers, the platform lets you leverage third-party data from your own CRM or DMPs to create an audience segment and run targeted ads based on that.
Custom Audiences
You can create custom audiences through Amazon DSP by collecting data from various sources and overlapping it to create a discrete audience segment.
Amazon DSP Payment Model
Unlike Sponsored ads that work on a pay-per-click or PPC model, DSP ads work on a cost per mil or CPM model. You bid the price you are willing to pay for 1000 impressions. Your ad is then served based on your bid.
Amazon DSP Service Model
Amazon DSP is a highly sophisticated, technologically advanced advertising system. So, unlike sponsored ads, this can’t be DIYed. If you don’t understand the ins and outs of programmatic advertising yourself, You will have to get help from someone who does.
You can leverage Amazon DSP ads through two service models:
Managed Service
Managed service is for sellers who have little to no programmatic advertising experience. Through managed service approach, you get to access Amazon’s DSP inventory and targeting capabilities along with consultative services.
There’s a catch, though.
Managed services may require a minimum spend of around 50,000 USD.
Self-service
Self-service is only available to sellers through Amazon agency partners. This model allows brands to have more control over their campaigns and start off with a smaller minimum budget.
Final Word
Amazon DSP ads can supercharge your advertisement campaigns. Relying on Amazon’s highly accurate and extensive database, these ads can reach the right people at the right time, and sometimes, even with the perfect ad creatives.
However, DSP campaigns can have a higher upfront cost than sponsored ads. Also, DSP campaigns may not be as simple to manage since they are based on a programmatic advertising structure.
Therefore, consider whether DSP ads are suitable for your brand before jumping in.
Working with Accrue, you can team up with ex-Amazonians who can help you choose and implement the best advertising strategies according to your business’s scale and goals.
Can’t decide whether you need Amazon DSP ads? Discuss your options with us.