The most frequently asked question about Amazon Demand Side Platform (DSP) is, unsurprisingly, what is it? That seems like a good place to start.
So, what is the DSP? It is a piece of software that allows advertisers to buy and display digital adverts on Amazon and beyond, in an automated and centralized way. DSP differs from Sponsored Display ads because of its programmatic features like its algorithm, which utilizes a potential customer’s cookie history, for example, to make automated decisions about where the value in targeting your ads is.
With DSP, you’re targeting audiences, people, demographics and behaviours to ensure that your ads are viewed by the right consumers informed by their historical search data. Sponsored ads simply target through keywords and terms more programmatically. DSP will place display ads in the places that will best optimise your ad spend. Those ads could feature on social media platforms, mobile apps, websites and online video channels, which are all crucial to direct-to-customer (D2C) businesses.
Amazon DSP launched back in 2016, but has significantly increased in traction in the last two years. Over that time, it has seen the biggest increase in use of all of Amazon’s ad types. That’s not surprising when online shopping has sky-rocketed over that time. Amazon DPS offers much-needed support to advertisers looking to buy ads at scale — the minimum monthly spend is around $5-10k so this can be a large barrier to Sellers with a smaller budget, but more on that later…
In short, Amazon DSP is versatile with impressive features that make it a key platform to have in your advertisers tool kit. Understanding the important details of the platform and where it can fall short is key to your advertising success. On that note, let’s jump into the FAQs!
Why would I use Amazon DSP?
Essentially, because it heightens your digital ad experience — making it easier and more cost-effective. The former comes by virtue of the centralised management hub — all your ads in the same place; whatever the advert, you can display it to potential customers on FireTV, Twitter or even Google! Previous to this, these would have had to be managed as separate campaigns, but that’s no longer the case. That’s likely why people are flocking to the DSP — you don’t want to miss out!
Can I use Amazon DSP if I don’t sell products on Amazon?
Absolutely! Amazon DSP is a useful tool whether you sell products on Amazon or not. That’s one of the great things about Amazon DSP — you’re not limited to only programmatically buying and selling ads on their own site. Their DSP has a rich life outside of the world of Amazon.
Can you trial the DSP? If so, how..?
Yes, you can trial the DSP with a basic retargeting campaign, which prompts website visitors, who left your website without buying, back to your site. That’s achieved by them receiving ads of your products and services after they have left your site, reminding them of your brand and encouraging them to click on the ad and actually convert.
To achieve a good low cost and low stakes retargeting campaign, don’t cast too wide a net (instead focusing on a smaller, more intentional group of consumers). Hit those customers with hyper-specific ads based on their product history on your site and always include a CTA. Trying out a basic retargeting campaign will show you how much success you can gain through retargeting and a tool like the DSP.
Do I need to create my own ads?
Amazon DSP is a valuable tool for advertisers looking for a helping hand on the creative side of advert creation as well as those who want to create their own content. Amazon has excelled in offering exclusive creative options like e-commerce templates or their video creative builder (which is free of cost!) to support unique and targeted content creation.
How can I know my audiences, specifically, on and off Amazon?
Amazon DSP provides analytics for your Amazon audience, which gives you access to audience insights. It's a brand new feature, that now also offers third-party audience data on your advertising campaigns.
Don’t forget: Whilst this is an interesting new feature, the analytics provided by Amazon aren’t as comprehensive as you need to have a holistic picture of your audiences. It fails to supply detailed customer data like long-term analysis, sales analysis, geo-hotspot data and more. To holistically improve your Amazon performance through customer-analytics, you need an introduction to CLV and CAC; only then will you understand how to target your customers effectively.
How can you track your performance on the DSP with analytics?
Amazon DSP does provide some metrics that will give you an insight into your retail activity before, during and after your campaigns across advertising platforms. You’ll discover how customers discover, research and purchase your products from Amazon advertising and third-party sites. Nevertheless, Amazon DSP only provides limited analytics rather than exhaustive ones.
This is where a tool like Nozzle really comes in handy — a proprietary customer and retail analytics platform that will give you all your decision-making and detailed customer data in one dashboard. It’s a great platform to use alongside Amazon DSP and will significantly improve the DSP’s efforts at analytics by upgrading your tracking exponentially with its multiple and unique data personas.
How does the DSP target audiences?
Sponsored ads target potential customers through keywords and terms. DSP takes targeting the right audiences to another level by doing exactly that — targeting audiences rather than words. And there’s no platform that has a wider knowledge of consumer behaviours than Amazon.
Let’s take a more detailed look into how the DSP actually targets audiences and finds your brand’s next biggest fans:
- Behavioural targeting: Pinpoints customers who have shown browsing behaviors like searching a specific product category over the past 30 days.
- Contextual targeting: Displays real-time and (very importantly) hyper-relevant ads to customers as they browse the web.
- Lifestyle targeting: Delivers ads relevant to consumers who habitually buy from a certain category, such as Beauty.
- Remarketing: E-engages with shoppers who have interacted with your brand or products in the past.
- Audience lookalike: Targets browsers who share similarities with your current customers.
- Advertiser audiences: Leverages data specific to your brand, such as email lists or product pages, with a tracking pixel.
How much does Amazon DSP cost? Is it worth it?
The Amazon Managed Services DSP option (a largely automated service) requires a minimum ad spend of $35,000 per month to get started. Another option is to choose the self-service advertising solution, which requires a lower minimum monthly spend of $10,000.
When you invest in the Managed Services DSP, you’re paying for a powerful marketing tool that can propel your business into success. It’s supervised by Amazon employees who find the best advertising opportunities for you without you having to put in the time. It constantly runs ads with deep knowledge of your product and your audiences across devices and sites on and off Amazon.
How should I incorporate the DSP into my marketing budget?
A DSP is targeted towards sellers who already have their businesses up and running. Investing in Amazon DSP can be a brilliant move for your business, but it doesn’t mean you should abandon all your previous strategies and campaigns.
Amazon DSP is the best fit for advertisers who are looking to buy ads at scale. Having said that, it is possible to make DSP work for you on a budget, but it’s imperative that you are significantly clued up on advertising strategies. Even better is if you have the help of another platform that will track your progress more intelligently and thoroughly than Amazon DSP.
Isn’t it confusing distributing campaigns on and off Amazon?
Surprisingly not, no. Your results from on and off Amazon are displayed in one single view even across different devices and formats — Amazon centralises your efforts for intuitive campaign management that doesn’t confuse or distract from what really matters — ad performance.
What audience will I reach with the DSP?
The Amazon DSP will help you reach exclusive Amazon audiences both on and off the platform. (See below for a list of sites and apps your DSP efforts will reach to know more about the specific audiences you could reach).
Will DSP help me to target competitors?
Yes, this is another of Amazon DSP’s strong points. You can even target individual competitor products to get a clear picture of what you’re competing against — and crucially, plan, edit or tweak campaigns to compete more effectively.
Pro tip: While a DSP is a powerful tool, it’s key to remember that it shouldn’t replace more traditional methods of complete competitor analysis. It’s great as an add-on but not a substitute.
What is programmatic advertising?
Amazon DSP prides itself on being a pro at programmatic advertising. But what does that really mean? Programmatic advertising is, simply put, the automated buying and selling of digital advertising on a given website or online platform.
What is the difference between Amazon DSP and Sponsored Display?
Both Sponsored Display and Amazon DSP increase ad reach and target ads both on and off Amazon. But, there are a few key differences between the two that are as follows:
- Eligibility: DSP, unlike Sponsored Display, is available for brands that don’t sell directly on Amazon. Sponsored ads can appear on third-party sites outside of Amazon but they will always lead back to your Amazon store. DSP, however, allows you to send traffic from ads to Amazon or your own site. You’ll have access to Amazon’s audience even if you’re not a part of it.
- Cost structure: DSP uses a Cost Per Mille (CPM) structure, which is the average cost you pay per 1,000 ad impressions. Whereas, Sponsored Display uses Pay Per Click (PPC).
- Minimum investment: The entry cost for Sponsored Display is lower than DSP because it only links back to and, therefore, benefits Amazon. The minimum spend for Sponsored display is as low as $1 where the minimum for the Amazon Managed Services DSP is $35,000.
- Control over creatives: Sponsored Display ads don’t offer customization and therefore much creative freedom over ads. Amazon DSP ads, though, are fully customizable in design and copy so you can target customers with the right messaging and highly relatable ads. DSP’s Dynamic eCommerce Ads even include features like retail price and review ratings.
- Targeting custom audiences: Like with creative customizations, Sponsored ads doesn’t provide custom audience targeting where DSP does. DSP allows you to build custom ads using Amazon demographic and user activity data to produce highly targeted segments for your ads.
What sites and apps will my DSP campaigns reach?
Your campaigns will be seen on all Amazon native and Amazon-owned sites and apps. Let’s take a quick look at some examples of those:
- Amazon desktop
- Amazon mobile
- Fire TV
- Kindle e-reader
- Fire tablet
- Digital photography review
On top of that, your campaigns will reach third party sites, so you can be sure your adverts will hit across a vast audience of potential and existing customers.
What type of ads can I buy through Amazon DSP?
More than you might think. There are a wide range of advert types that Amazon DSP allows you to work with. Here are some examples:
- Video ads: These can be linked to your website or an Amazon product page.
- Dynamic e-commerce: Such ads automatically choose the best advert to display depending on your campaign goals.
- Static ads: Direct customers to Amazon storefronts, custom landing pages or product detail pages.
- Over-the-top video ads (OTT): Full-screen video ads are linked to TV sources like the Amazon Fire TV Stick. These ads reach millions of prospective and existing customers alike but are not clickable.
Maximise your DSP efforts with Nozzle
Unsurprisingly, unless you know precisely how your DSP efforts are performing, you could end up overspending money on ads that are underperforming and underspending on ads that could be overperforming. Nozzle has the remedy for this.
The Nozzle platform brings highly sophisticated insight capabilities to the advertising table that are just not possible with Amazon DSP alone. It allows you to track, monitor and improve on what you’re creating on the DSP and points you in the right direction with advice on how to tweak your current campaigns as well as planning future ones.
Let’s look at some of the features of Nozzle’s analytics platform that will optimise your ad campaigns and ad placements and help you stand head and shoulders above your competitors.
- Accurate rolling retention rates: Nozzle will define and report on your retention rates, allowing you to understand just how many customers come back to your brand and where you should focus your retargeting efforts.
- Repeat purchase analysis: Get access to your customer lifetime value (CLV) to pinpoint which products are performing best and, therefore, which products to advertise more. Then, all you have to do is watch your advertising cost of sale (ACoS) break even!
- Sales analysis: Nozzle reveals what time of day, day of the week, and month your products are performing best. That way, you can make the most out of them in your advertising efforts.
- Trial Conversions: Understand if your gateway products are performing to expectations. Highlight and identify the products that have the best cross-purchase rates.
- Deal Analysis: Define success on your deals for the first time. Split between new to brand, repeat and reactivated customers, understand whether running deals is a net positive for each of your products.
We don’t need to tell you that the online advertising world is competitive (as an understatement)! While Amazon DSP is a great start at improving your conversions, unfortunately, it also falls short. You’ll need to employ a platform like Nozzle to pick up the slack if you want to really begin to compete with similar brands. Get in touch today and book a demo to see exactly what we can do for you…