The Ultimate Guide into Amazon DSP and its Most Powerful Features

Amazon is pioneering a new way to sell with its novel Demand Side Platform. Amazon DSP leverages the e-commerce giant’s massive customer reach, advanced targeting capabilities, and expansive and highly relevant content to help marketers align their messaging with their audience. In this article, you’ll learn how to leverage the Amazon DSP and its features to connect with your customers.

What Is the Amazon Demand Side Platform

On Amazon, sellers compete for customer attention with their marketing strategies, which include creating brand awareness among the customer and building loyalty. Amazon is continually making strategic changes to its algorithm to help maximize performance and deliver more relevant results. Although the marketplace offers a tremendous opportunity for sellers, it doesn’t come easily. Amazon DSP is a powerful tool for marketers and brands. It allows you to scale up targeting capabilities to attract leads and customers in a very cost-effective manner.

The Amazon DSP is created to automatically buy ads for your listings. This is called programmatic advertising. Amazon’s ad bidding algorithm uses machine-learning technology to automatically select ad spaces that show the highest profit margin. When a listing becomes too competitive with ad prices, Amazon’s algorithm selects and automatically bids on the best spots to ensure listings and prices stay competitive. This approach has numerous benefits for sellers: as a result, they tend to get wider reach and better prices for their listings. 

Brands are using Amazon DSPs for a variety of reasons, including to access curated product selection, customer reviews, and customer insights data. There are a couple of things you should know about programmatic advertising before using DSP.

Unique Features of Programmatic Advertising

Programmatic advertising is a targeted and “pre-programmed” way to acquire and reach targeted audiences or consumers. With the help of the Cost per Thousand (CPM) model, advertisers are able to automatically adapt the bidding prices on the basis of factors such as competition, time, spend, and value of a certain placement.

source: eMarketer

It is estimated that around $94 billion will be spent on programmatic ads in the US in 2022. 

Some of the major features of programmatic advertising are:

  • fully-automated purchasing process
  • prices are competition-dependent so supply can’t be insured
  • real-time bidding on impressions delivers ads to a specific audience
  • advertisers are able to use a dynamic pricing model.

One major benefit of programmatic advertising is that it is a seamless tool that divides the stream of advertising into smaller parts, allowing for a more gradual approach. This ensures the success rate for an advertising campaign is in line with the desired outcome for the advertiser, which is a very important element for the success of your program.

In a world of personalized advertising, algorithms generate better-personalized ads for consumers. Amazon has quietly been stepping up efforts to ensure the most effective ads are shown. Specifically, the company is utilising machine-learning algorithms that automatically select and bid on the best ad spaces. It lets Amazon take control of the process and always ensure the best presentation of ads.

While Amazon has gradually rolled out more programmatic advertising opportunities to marketers, they still set their own pricing and terms. That has resulted in unique campaign structures such as the ability to offer different bidding options for multiple ad sizes.

How Does Amazon DSP Work?

With the help of Amazon DSP, you can place ads both on and off Amazon and generate more traffic for your business. In addition, you can purchase display, video/audio ads. So you’ll have a plethora of creative ways to show your brand’s appeal. DSP offers leading-edge advertising services that ensure your ads meet Amazon’s main standards, as well as brand safety and quality assurance.

Long story short, Amazon is able to provide advertisers with vital customer data that is only accessible via DSP.  Don’t let it slip away!

Who Can Use DSP?

DSP is a fantastic option for agencies working on behalf of sellers because it can be utilized by any advertiser. DSP as a marketing tool can be utilized by any business, advertiser, or agency, because of its innovative features, flexibility, and scalability. You may not actively sell on Amazon, but you can still benefit from analytics, keyword bidding, and many more useful data that DSP provides. It is especially useful for advertisers looking to buy ads on a large scale.

Self-Service and Managed-Service DSP

Amazon DSP comes in two options. The first one is a self-service DSP, available to every advertiser. It enforces an explicit approach to campaign adjustments, which is ideal for advertisers that like fine-tuning their ads until they get the most of every dollar. It is imperative though that you be familiar with how programmatic advertising works to maximize the effectiveness of this option.
The second option is managed-service DSP. It is available for sellers with at least $35,000 spent. Managed-service DSP is great in that it automates most part of ad campaign management processes so you don’t have to plunge yourself into it. If you don’t have any background in programmatic ads – this option is for you. Remember, it does require a bigger budget on your side. In exchange, you forget about the headache of optimizing and adjusting ads and focus on fostering your efficiency.

How is Amazon DSP Different from Sponsored Display?

Many consider DSP yet another Sponsored Display Ads with more features. However, that is far from the truth. Sponsored Display is yet another novelty from Amazon that has a lot in common with Amazon DSP. It can be confusing as to which platform you should use going forward.

The first feature that both products share is the capability of reaching audiences on and off of Amazon. 

Here are some basic differences between the two developments:

  1. Amazon DSP is a more thorough and exhaustive platform for launching advertising both on and off Amazon. It allows for the selection of audiences, pricing, and other important elements of the ad campaign. Sponsored Display restrictions are more onerous.
  2. The entry threshold of DSP is much bigger than that of Sponsored Display, however, it does offer more possibilities. Sponsored Display ads are suitable for Amazon retailers seeking effortless ad retargeting solutions with a small investment and few steps. Amazon DSP requires more of your time and effort, but it employs insights from data collected from Amazon and external resources.
  3. Amazon DSP is designed for much bigger audiences, that will to take their ads to the next level throughout the web and across a variety of mediums. While ads running via Sponsored Display platform can be displayed off Amazon, they won’t be targeted as accurately as DSP ads can be.
  4. DSP allows for sending shoppers to your online store (or even to certain landing pages), not just listings or Brand stores. Sponsored Display allows for sending shoppers to your Amazon pages.

How Can You Benefit From Amazon DSP?

You can take advantage of a number of benefits when you work with DSP through Amazon. Here are a few of them:

  • Amazon DSP offers advertisers the ability to leverage their first-party insights based on billions of observed daily shopping patterns. This gives them a unique advantage in data-driven marketing.
  • Amazon DSP liberates advertisers from limiting their campaigns to one device or platform. Instead, it enables them to reach the most consumers simultaneously with cross-device ad campaigns.
  • Using both Amazon’s audiences and their own audiences, advertisers can leverage Amazon’s DSP data. It contains the audiences’ demographics, purchases, interests, demographics, and their own data, which features their audiences’.

Amazon has long provided deep data analysis, which includes detailed information such as the total number of purchases, number of products sold, and the number of items listed in the “add to cart”. The audience insights, robust performance analytics, and pre-, during, and post-campaign insights that the DSP provides are impressive and take the guesswork out of running your campaign.

Final Word

DSP has now become a key part of any enterprise’s internet-centric marketing strategy, as it helps marketers tap into their audiences and better target them, while simultaneously driving incremental demand. If you aren’t still using it, you should better start right now.

Vitalii Khyzhniak

Vitalii Khyzhniak is an Amazon advertising and marketing expert, Chief Executive Officer at Profit Whales, a full-service marketing agency for Amazon brands, that accelerates sales growth using on & off Amazon traffic to give them an edge over competitors and diversify the revenue streams while increasing the business evaluation. Amazon Ads partner. Pinterest partner. He’s obsessed with increasing profits for 7-9 figure brands selling on Amazon, helping them with building strong brands beyond the marketplace, finding the best CPA, and conversion. Vitalii is a speaker at the e-commerce conferences and shows, where he shares practical advice on Amazon advertising and marketing strategies, drawing on the agency’s experience and data.

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