What is Amazon DSP?
Amazon DSP is a platform for buying video and display ads across the Internet. Amazon DSP has 2 unique features: a) Automatic ad buying process across thousands of different websites and b) Advanced targeting options powered by Amazon’s exclusive purchasing data
So, instead of purchasing an individual ad placement on e.g. Huffington Post, through Amazon DSP (Demand-Side Platform) you are buying a variety of display / video ads on multiple websites – with your targeting details in mind, of course.
Have you ever browsed a product on Amazon and suddenly found that item following you to your favourite websites’ ad banners? Those ads were likely to have been purchased by the brand owner through Amazon DSP.
Besides, Amazon DSP ads are not limited to Retargeting campaigns or even to products selling on Amazon. Display and Video ad formats are also available for products off Amazon, and can include services and experiences too. You don’t have to sell on Amazon to benefit from Amazon’s targeting data!
Informed targeting = Better ad placements = More effective ads = $
This platform type is not unique to Amazon. For example, Facebook Ad Manager is also a DSP, except that it only sells its own placements (on Facebook and Instagram). But because Amazon DSP is designed as a larger-scale, longer-term strategy that works best with lots of historical data to make the most of its offerings, it is suggested for larger brands with significant marketing budgets.
The Amazon DSP Ecosystem: SSP, APS, TAM/UAM
The corollary software is called a Supply-Side platform or SSP and is for publishers who supply ad space.
Here is a simplified view of the relationship:
One of the SSPs is Amazon Publisher Services, or APS. This is part of how Amazon is able to supply ads off Amazon and Amazon properties, to third party websites.
APS offers two services to ad publishers:
- Transparent Ad Marketplace (TAM)
- Unified Ad Marketplace (UAM).
The difference being that TAM allows suppliers to connect with Amazon and other SSPs directly and individually, while UAM connects suppliers directly only to Amazon, and manages other SSPs indirectly.
Of course, Amazon’s own ad placements are also up for grabs. On Amazon, but also on Amazon-owned devices, apps and websites, of which there are many.
If part of the appeal to marketers is Amazon’s ability to target more effectively, the same is true for ad space suppliers on the supply side. More effective ads mean brands will pay more for those placements.
More effective ads = More valuable placements = $
All of these ad placements are supplied to the marketer (you) through one unified platform: Amazon DSP.
What makes Amazon DSP unique?
Amazon DSP is distinguished from its competitors according to the following unique selling propositions:
- Data intelligence
- Access to Amazon’s Properties
So, Amazon DSP allows brands to leverage Amazon’s data intelligence to reach audiences off Amazon, and the potential to reach users on Amazon-owned properties.
We already talked a bit about targeting, but why is Amazon so good at it?
Amazon was an early adopter to Big Data. They have been refining their data analysis methods since as early as 2003 and show no signs of stopping. What makes this data especially valuable is that it is about purchasing behaviour.
‘Google knows what you search, Facebook knows what you like, but Amazon knows what you buy.’
Amazon has made a business of knowing the who, what, when, why (or why not) and at what price of e-commerce. Well enough to both predict and influence shopping behaviour.
Specifically, Amazon uses Pixel Based targeting which is behaviour tracking triggered by visiting a website (or specific pages) or performing certain actions online.
As important as the quantity and quality of data is the ability to interpret it in meaningful – and marketable – ways. Like creating lifestyle groups such as vegans, foodies, or fishermen.
Part of how Amazon manages to interpret this data is through a Collaborative Filtering Engine which groups activities and data points into sets.
This targeting method is called ‘Audience Lookalike’.
Now apply this logic with the knowledge that Amazon has hundreds of data points for millions of people.
With a constellation of different online activities combined with the predictive power of collaborative filtering, Amazon is able to create detailed consumer profiles.
With these insights, brands can avoid making (potentially false) assumptions about their prospective customers.
The same logic is behind Netflix’s recommendation algorithm:
Netflix uses your past browsing and watching behaviour in combination with others’ to predict what you would like to watch next.
- The more you watch, the more informed (and more accurate) the algorithm becomes.
The same is true for Amazon, except that there are many activities that may feed the algorithm. Remember that Amazon is way more than a selling platform.
Of course, Amazon’s extensive reach, on and off the marketplace itself, is as much of a boon to ad distribution.
Who can you reach with Amazon DSP Ads?
Amazon offers targeting based on a combination of the following factors:
Imagined Product: Sally’s Avocado Slicer
|Targeting Type||Description||Individual Example|
|Behavioural||Groups who have displayed specific behaviours, such as buying or browsing similar items recently.||A user who visited the sub-category ‘Graters, Peelers, & Slicers’ on Amazon last week.|
|Lifestyle||Groups who have displayed behaviours that, when understood as a whole, suggest a certain (common) lifestyle.||Vegans, vegetarians, foodies.|
|Contextual||Groups who demonstrate an interest in your product by visiting websites thematically related to your product.||A user browsing a guacamole recipe.|
|Remarketing||Groups who have come close to buying your product or a competitive product, a.k.a. ‘in market’ audiences.||Users who added your competitor product ‘multi-fruit slicer’ to their shopping cart without buying.|
|Audience Lookalike||Groups of customers who behave similarly to selected groups. Such as a brand’s customers or competitor’s customers.||Users who are similar to people who like Sally’s Avocado Slicer on Facebook.|
|Advertiser Audiences||Relevant groups (customers or prospective customers) provided by the brand.||Visitors to Sally’s Avocado Slicer website.|
Types of Amazon DSP Ads
Amazon DSP: Display Ads
Amazon Display Ads are what we commonly think of when we think of onsite ads. The available formats for Amazon Display Ads are diverse in size, shape, and type, adding up to seventeen formats altogether.
In contrast with lower funnel marketing efforts, Amazon Display Ads offer brands a more expansive reach, because they include placements off Amazon, all over the internet.
And, because creative assets are built by the brand, they can deliver a more tailored, on-brand message.
Amazon Display Ads can be broken down into three types:
1. Website Display Ads on Desktop and Mobile
These ads appear on websites, whether those websites are being viewed on desktop or mobile displays. With seven different sizes, this type offers the most diversity in terms of ad size.
Example (with real ad content):
2. Mobile App & Banner Amazon Display Ads
These ads appear inside of mobile apps on Android, Fire Tablet, and iOS platforms. There are four formats in total, three of which are banner shaped.
This type of Amazon display ads may also contain ‘rich media’ (meaning advanced HTML features such as video and audio) but those are only permitted on off-Amazon (third party) websites.
3. Amazon Display Ads: Mobile Interstitials
Supported by most applications, these ads take over the user’s mobile screen for a short period but can be dismissed by clicking the ‘close’ button in the upper right corner.
There are two subtypes: ‘Full Screen Image’ or ‘Medium Rectangle’.
‘Full Screen Image’ display ads are responsive, like the car ad above, but contain all of the essential information within the “safe areas” identified below.
‘Full Screen Image’ ads may contain video content, which we’ll get into shortly.
‘Medium Rectangle’ Mobile display ads are similar, but use the same rectangular image over a background.
Display interstitials typically include a single CTA with a button link.
Amazon Display Ads are popular for good reason, but their prevalence presents a challenge to marketers:
Because banner ads in particular are one of the more conventional digital ad formats, users have subconsciously been trained to ignore banner-shaped images and information because of the assumption that it is an ad.
Sidenote: For this reason, click rate actually may not be the best metric for measuring success with this ad format. More on that next in DSP Strategy.
This behaviour is called ‘banner blindness’ but the same dismissive behaviour is likely to follow for other ad shapes with ‘typical’ ad placements.
This can be disrupted by more dynamic ads, which is likely why rich media ads have a much higher click rate.
Rich media ads include interactive or dynamic elements that draw attention (like audio) or compell users to interact with the ad in some way (like filling out a form).
Alternatively, videos can be embedded into Amazon Display Ads.
Amazon DSP: Video Ads
Video Ads promise to offer consumers a more immersive brand experience.
When Videos are part of Amazon Display Ads, they are called ‘outstream’ – meaning not part of an existing video. For now, these are only available in on-Amazon placements.
This includes ‘Full Screen Image’ Video Mobile Interstitial Ads. Like Display interstitial ads, video interstitials occupy the user’s entire screen but can also be closed.
Since the recommended length of the video is relatively short, between 15 and 30 seconds, CTAs should be tackled quickly.
Video Ads can also give large brands the chance to repurpose high-investment content like TV commercials.
These longer form ads are likely to be placed as an ‘instream’ ad, which is when a Video Ad plays during another video: Either before, during, or after as an ad break. While Amazon still recommends you keep it short, they may be up to three minutes long.
Unlike other DSPs, Amazon offers a ‘brand safe environment’ for your videos by playing them exclusively on Amazon-owned entertainment properties, like Fire TV.
Where will Amazon Display Ads and Video Ads Show?
Amazon Display and Video Ads may appear on:
Amazon owned and operated sites, apps, and devices:
- Amazon owned and operated sites and apps, like IMDb, Box Office Mojo, Zappos, Goodreads, Twitch, ShopBop, and Audible
- Amazon devices like Amazon Echo, Amazon Kindle, Amazon Fire tablet, Amazon Fire TV
Additionally, Amazon Display Ads may appear on:
Third parties, a.k.a. The whole wide internet.
What is the difference between Amazon DSP & PPC?
|Management||Self-service solutions on Amazon||Managed-service solutions on & off Amazon|
|Platform||Amazon PPC||Amazon DSP|
|Name||Sponsored Products & Sponsored Brands||Sponsored Display (beta)||Display Ads||Video Ads|
|Do you have to sell on Amazon?||Yes||No|
|Where do they show?||On Amazon||On Amazon product pages & off Amazon on third-party websites and apps||On Amazon, Amazon devices, AMZ owned websites, other websites||Within video content or part of a Display Ad on Amazon devices, Amazon owned websites|
|Who can buy them?||Amazon Vendors Amazon Sellers (enrollment in Amazon Brand Registry required for Sponsored Brands/Display)||Amazon DSP users who have a marketing budget exceeding $35,000 and who want to work with an Amazon Advertising Consultant. Or brands who are willing to work with a qualified agency to access Enterprise Self-Service.|
|Eligibility details||Must be eligible categories (not used, not adult) & Buy Box eligible (‘performance based’)|
|Where do the ads direct the user to?||Amazon pages||Any page on and off Amazon|
|How are the ad placements charged?||PPC – Pay Per Click||CPM – Cost Per Thousand Impressions|
|What are the targeting options?||Keyword, ASIN, categories, brands||Behavioural, Lifestyle, Contextual, Remarketing, Audience Lookalike, Advertiser Audiences|
If you are currently selling on Amazon, you surely know Amazon PPC: Sponsored Products & Sponsored Brands. Just in case you don’t, get caught up here and now with our complete and cohesive Amazon Marketing Guide 2020.
There are many differences between PPC and DSP, but most the most succinct version is this:
Amazon PPC Ads are for low-funnel marketing while Amazon DSP Ads are for higher-funnel marketing.
‘Low funnel’ marketing means that this type of ad has the most direct impact on sales. Amazon PPC ads on Amazon offer you the opportunity to reach audiences actively looking to buy.
Let’s put it this way: If Amazon was a physical store, Sponsored Products is making sure that your product is displayed at eye-level with like-products where consumers expect to find it.
Sponsored Brands is in-store brand support, such as a display. Or, if incorporated with a Brand Store, a door to a boutique corner inside the superstore: a privilege usually only afforded to ultra high end brands.
By contrast, Amazon DSP advertising is the marketing that takes place outside of the store. These efforts are ‘high funnel’ because they are less directly connected with sales and take place outside of a shopping context.
The purpose of higher funnel marketing is to generate brand awareness and interest among your target consumer.
Customer Journey Example: Felix Buys Chickpea Snacks
Imagined Product & Brand: Marvin’s Chickpea Treats (MCT)
|Background: Amazon Data|
|Felix purchased some vegan protein powder on Amazon.||Felix has been identified as belonging to the Lifestyle group ‘vegans’ by Amazon.|
|Felix’s purchasing journey|
|When Felix is streaming his favourite show on IMBDb TV on his laptop. He sees a short video commercial for a chickpea snack. His interest is piqued but he is keen to return to his show.||Funnel Stage: Awareness |
Ad type: Video ad for MCT served to Lifestyle group ‘vegans’ through placement on Amazon Fire TV.
|While he is catching up on his favourite running blog, Felix sees a display ad in the corner of his eye, but pays it no mind.||Funnel Stage: Interest |
Ad type: Website Display Ad for Desktop served to Lifestyle group ‘vegans’ through placement on selective websites.
|On another day, Felix is shopping on Amazon, he remembers to stock up on snacks. He searches on Amazon for ‘vegan snacks’. Felix notices the Sponsored Brand Ad at the top of the search results. This brand looks familiar, and that familiarity translates to a vague sense of trust. Felix clicks through the ad to find the impressive and engaging Brand Store. Lovely as it is, Felix decides to do some comparison shopping by heading back to the search results.||Funnel Stage: Consideration |
Ad type: Sponsored Brand Ad flagged by keyword targeting.
|Felix now searches for ‘chickpea snacks’ to compare different products.He clicks on several Sponsored Products ads as well as organic results and visits product pages, comparing company values and nutritional information. On a competitive product’s page, Felix notices a Sponsored Product ad for Marvin’s, with a coupon! Felix adds the item to his cart, and forgets about it.||Funnel Stage: Conversion |
Ad type: Sponsored Product Ads in search results (flagged by keyword targeting) and on competitive brand’s product pages (flagged by ASIN targeting).
|Felix is reading an article on Huffpost, and is reminded of the value pack of MCT he added to his cart with what looks like an Amazon product search result. The ‘buy’ button is right there on the ad, so Felix completes the purchase!||Funnel Stage: Retention |
Ad type: Sponsored Display Ad using ‘Remarketing’ targeting.
|Of course, consumers bounce around the funnel. A strictly linear path from top to bottom is rare. However, a full funnel strategy, engaging consumers at various points in their journeys, can keep your brand and product fresh in mind and build a relationship with your target audience. Ideally, with the right marketing support, your consumers are worth so much more than the sum of their sales as they become ‘brand evangelists’, generating referrals.||Funnel Stage: Referral |
Ad type: Custom Ads and/or any combination of the above Amazon Advertising formats. Because ‘Custom Ads’ incorporate all of the previous formats, it would be possible to craft a full funnel strategy using this ‘format’. However, this can also be performed with a more hands-on approach, using a combination of different ad formats and management systems, without Amazon’s direct oversight.
How much do Amazon DSP Ads cost to start?
At the moment, beginning your Amazon Advertising journey through DSP isn’t as simple as signing up. Brands must choose between Amazon Managed Services and Enterprise Self Service.
Amazon Managed Services
In this case, you are employing Amazon’s ad team to manage your advertising campaigns. To make this worthwhile, this option comes with a minimum spend of 35,000 USD.
This option is best suited for brands with less DSP advertising experience, who want a ‘white glove service’ from Amazon.
In this case, you avoid Amazon’s minimum spend and have a greater degree of control over the services. This version is ‘self-serve’ in the sense that you do not need to collaborate with Amazon’s ad team.
While this means that technically the minimum spend is waived, Amazon usually recommends a budget of at least 10,000 USD per month for a period of no less than three months.
Also, brands may only have access to the portal through an approved agency.
This option is best suited for experienced brands who know what they want and enjoy having a greater deal of control over their campaigns.
Your First Amazon DSP Ad: Getting Started
Once chosen, brands need to establish an overall goal. The goal will determine strategy. Combined, these decisions will determine which creative assets are needed and how they should be designed.
The assets (images, copy, video) will ultimately be made into ads which are fed into the Amazon DSP platform, and placed.
The individual ads will be charged by CPM, which is the Cost Per 1000 impressions. This means long term costs are flexible and can be adjusted based on performance.
Amazon DSP Strategy: How to Make the Most of Your DSP Ads
Amazon DSP strategies can loosely be divided into two main categories, each with their own Key Performance Indicators:
Amazon DSP Goal #1: Retargeting
Retargeting means showing ads for products to consumers who have already demonstrated an interest in purchasing your product.
You may use the Retargeting audience to show your ads to shoppers who have…
- Visited your brand’s website or Amazon Brand Store.
- Viewed your product’s Product Details page on Amazon but didn’t purchase it.
In this case, Amazon’s Display Ads serve as a gentle nudge for the consumer to complete their purchase.
As far as off-Amazon ads go, retargeting is the lowest hanging fruit: retargeted audiences are 43% more likely to convert.
How do you know if it’s working? Key Performance Indicators:
Because of the direct relationship with purchasing intent, this goal will have an increase in sales as a KPI and so is the lowest funnel goal for Amazon DSP Advertising.
Conversions attributed to remarketing can either be direct: the user clicked on the ad, which brought them back to the Product Details Page, then purchased the product right away.
Or, indirect: The user saw or clicked on the ad and eventually purchased the product. In this case, we assume the relationship between seeing and the ad and buying the product.
- Click-through rate.
A click on your ad is validation that you have reached an interested consumer and earned another chance to make a sale.
For retargeting campaigns, expect a CTR 10x higher than conventional Display Ads.
- Brand Consideration. When a prospect sees a retargeting ad, they are 70% more likely to purchase your product over your competitor’s.
You might measure an increase in Brand Consideration with online ‘brand engagement’. The following are (measurable) instances:
- Increase in (organic) Brand Store visits.
Rather than clicking on the ad which takes you directly there, you are likely to get more ‘organic visits’ to your Amazon Brand Store as a result of an increase in searches for your brand.
More visitors to your Amazon Brand Store or any engagement with your brand online is an indication that your ads are working!
- Increase in branded searches on Amazon (discoverable in the Amazon Search Term Report in AMS or Amazon Marketing Services).
If consumers are more aware of your brand, they are more likely to include your brand in their searches – which puts your brand at a significant advantage.
From an SEO standpoint, because Amazon’s A9 algorithm is based in part on keyword match, a product search featuring your brand name will allow you to rank much higher than a generic search.
This can also be measured by any other online engagement with your brand after having seen your ad.
- Brand halo sales. Halo sales are sales that happen during or shortly after your campaign by customers who engaged with your ads and ended up purchasing one of your other products (which wasn’t featured in the ad but carries the same brand).
Finally, the ultimate KPI will be your Return on Advertisement Spending (ROAS). This is the simplest way of knowing whether you are getting a positive return on your investment in ads.
Amazon DSP Goal #2: Brand Awareness
While retargeting can promote brand awareness among consumers who have already expressed an interest in your product, you also want to reach beyond this pool to new prospects; Customers who don’t know they want your product yet.
Because this is a higher-funnel effort, you should expect a lower engagement rate.
But first, why does brand awareness matter?
Ultimately, more users at the top of the funnel means more at the bottom, too. While perhaps not as pressing, the truth is: The very best performing brands on Amazon consider the full funnel in their digital strategy.
This is especially important on the Amazon Marketplace, because of the inherently competitive nature of the platform.
An effective ‘awareness’ level strategy is kind of like knocking out your competitors before you enter the ring.
Depending on the specifics of your campaign, you may benefit from a combination of Behavioural, Lifestyle, Contextual, Audience Lookalike, and Advertiser Audiences.
How do you know if it’s working? Brand Awareness KPI’s:
Because of the mere exposure effect, we know that other things being equal, consumers’ awareness of your brand is likely to translate to a preference for your brand.
So, impressions, or number of times your ad (and brand) is viewed, are one metric for measuring your brand’s exposure.
- Click-through rate.
CTR demonstrates heightened interest in your product or brand. Basically, a click on your ad is validation that you are reaching the right audience.
Because ad clicks are rare, this is a juicy lead. This group can be made into a custom audience, and then fed back into your remarketing group.
- Brand Engagement. Specifically, an increase in (organic) Brand Store visits and branded searches (as defined above).
- Brand halo sales. As mentioned before, halo sales are sales that happen during or shortly after your campaign by customers who engaged with your ads and ended up purchasing one of your other products (which wasn’t featured in the ad but carries the same brand).
If Brand Awareness is near the top of the funnel and Retargeting is near the bottom, in between you have Brand Consideration.
Brand Consideration is (literally) the phase where consumers might consider your brand over one of the many others on Amazon.
For example, you may use the Behavioural audience to show your ads to shoppers who have…
- Viewed similar, competitive products on Amazon.
- Bought or browsed complimentary products.
In this case, the Display Ads offer you a chance to compete with other brands for customers who are already quite low in the funnel.
To measure this, you might (also) consider the following KPI:
- Detail Page Views.
DPV is the number of times your Product Details Page is viewed.
Bonus Amazon DSP Goal #3: Marketing Insights
Back to all that juicy Amazon data.
The reporting on your DSP ads can tell you a lot about your customers. And, knowing more about your customers can result in a more effective marketing strategy across the board.
You might be surprised to learn that your ad is performing well with men under 40 who like the outdoors (demographics).
Or, that users who like your product have other common interests, like environmentalism or skateboards (overlap).
You also stand to learn how users shop for your product (shopping behaviour), how often (lifecycle) and when (temporal).
Ultimately, insights gained can be used to inform bigger picture decisions like brand positioning, and also more directly applicable marketing decisions like useful targeting keywords for PPC.
Is Amazon DSP Advertising worth it?
Think of having a robust and profitable PPC campaign and a strong organic SEO as your foundation blocks for success on Amazon.
Once you have built these, making a calculated investment in Amazon Advertising stands to improve your overall performance.
Expanding your strategy gradually up the funnel will bring a steady flow of engaged customers in the door.
But building up Amazon DSP before PPC would mean risking inviting customers in before you’ve properly stocked the shelves and swept the floor. (Are you tired of this analogy yet?)
To assess your brand’s suitability, ask yourself the following questions:
- Will prospective customers looking for a product like mine quickly find it on Amazon?
(Determined by strength of organic SEO & PPC campaigns)
- Once found, is it likely that users will purchase?
(Determined by conversion rate from your Brand Store & Product Details pages)
If you answered yes and your marketing budget allows, then you are ready to make the most of Amazon DSP!
With retargeting, valuable leads aren’t wasted. With increased Brand Awareness, more people will arrive on Amazon with your product already in mind.
Finally, getting to know your customer and how they engage with your brand and specific products will help to build a more targeted and effective marketing strategy across the board.
Like all marketing efforts, the most important part is to monitor, test, adjust, and improve.
Have you tried Amazon DSP?
If so, let us know how it worked out for your brand in the comments below.