What is Amazon's Demand Side Platform (DSP)?

Trying to wrap your head around Amazon’s acronyms (ACOS, AMG, AMS, AAP, DSP) can make you feel like you are going mad. But as Amazon advertising is now just as important for product promotion as Facebook and Google, brands need to understand how Amazon advertising works in order to stay competitive.

Amazon has historically made two types of advertising options available to brands:

1) Search advertising on Amazon

2) Display advertising through Amazon

In late 2018, both the search and display sides of Amazon Advertising went through a rebrand. Now, everything is broadly called “Amazon Advertising.” AMS is called “Amazon Ad Console”, Seller Central Campaign Manager is still called “Campaign Manager” and AAP is now called “Demand Side Platform” or DSP.

This visual may help you digest the Amazon Advertising organizational structure:

amz org chart 5-1

 

Amazon Ad Console

The Amazon Ad Console offers three different ad types: Sponsored Products, Sponsored Brands, and Product Display Ads. This is a suite of cost-per-click (CPC) advertising that brands can use to market to Amazon shoppers.

Advertisers who invest in Amazon Ad Console advertising will bid on keywords to win the right to have their ad shown to consumers who are actively searching. With the CPC model, brands only pay when a shopper clicks on their ad.

With the Amazon Ad Console, you are reaching consumers who are further down the marketing funnel (i.e., closer to making a purchase), so the total size of your audience pool is limited in scale. Search advertising is an excellent solution for brands looking to grow sales on Amazon, but if you are looking to consistently grow year-over-year by 100% or more, you want to explore the Amazon Demand Side Platform (Amazon DSP) suite.

 

Amazon Demand Side Platform (DSP)

Amazon DSP is an advertising platform for advertisers that lets brands advertise to potential customers efficiently and effectively at scale. Amazon’s unique advantage is that it lets advertisers programmatically buy display and video ads using customer targeting data only available through Amazon.

The ads created and managed through Amazon DSP can be setup to appear not only on Amazon.com like they do on the Amazon Ad Console, but also across websites, social media sites, mobile apps and/or online video channels. Amazon DSP is the only way to access advertising inventory exclusively available on Amazon’s collection of owned online properties and devices like:

  • Kindle

  • Fire TV

  • IMDb

  • Amazon Owned & Operated properties

 

Most of the advertising options available on Amazon DSP uses a cost-per-thousand (CPM) model instead of the cost-per-click model like we see in Amazon Ad Console. Instead of buying clicks, the focus is on paying to reach a targeted audience and serving that audience your relevant ad. A cost-per-view (CPV) model is used for video ads. It’s a similar type of model to CPM, but is designed specifically to ensure advertisers are paying for views of their video ads. A DSP media buy is the only way brands can accurately and efficiently target Amazon shoppers off of Amazon. This type of advertising helps advertisers build awareness for their brand and products and increases the likelihood that customers will consider buying their brand and products when they purchase on Amazon.

 

Targeting Options with Amazon DSP 

With Amazon DSP, you can reach shoppers anywhere in the marketing funnel, including consumers who have shown recent intent to buy your products but haven’t purchased yet.

Amazon DSP allows advertisers to segment audiences through six unique targeting options:

  • Behavioral segments include audiences who have shown specific behaviors such as buying intent in a specific Amazon sub-category in the previous 30 days

  • Lifestyle segments include audiences who demonstrate search and purchase behaviors associated with a common lifestyle such as Paleo Dieters, Outdoorsmen and Environmentalists

  • Contextual segments target audiences based on what they are browsing in real-time to show ads that are contextually relevant

  • Re-marketing segments re-engage shoppers that have searched for, viewed and/or purchased your products or similar products

  • Audience Lookalike segments include audiences with similar shopping behaviors as other specific audiences such as your current customers

  • Advertiser Audiences segments leverage a Brand’s data such as information from a CRM database, a hashed email list or a website page with a tracking pixel

 

Amazon DSP uses these segments to target specific  audiences. This means that if someone looked at your Amazon page, but did not purchase, or researched your product on your brand website, or even looked at your competitor websites - you can show them an ad that reverts them back to your Amazon listing to complete their purchase.

 

Should I Invest in Amazon Ad Console or Amazon DSP?

Amazon DSP campaigns are a great fit for brands who want to create more demand for their brand’s products and drive consistent year-over-year growth through new customer acquisition. Amazon Ad Console campaigns are valuable for companies who want to capture existing demand for the products it sells and drive profitable return on ad spend.

Both Amazon Ad Console activities and Amazon DSP are excellent platforms alone, but together, they create enormous value. When you invest in both, you are covering the entire sales funnel: re-engaging interested shoppers, reaching more high intent customers and accessing new creative formats. Amazon has case studies that prove the impact. According to Amazon, search and display ads together increases demand for a brand’s products by over 100%, increases total sales by as much as 30% and increases ROAS by as much as 160%

Are you currently using Amazon Ad Console and wonder what impact Amazon DSP could have on your bottom line? Contact Amplio Digital today for an assessment.

 

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