Nozzle Insights

The latest news and industry insights for all things Amazon advertising, both for agencies and sellers. Keep in the loop for Amazon search and display stories, as Nozzle helps brands leverage success in the e-commerce world.

Amazon DSP Targeting Options Explained

    Amazon has become an increasingly significant player in digital advertising. As part of its drive for market domination in advertising, Amazon is investing heavily in its ecommerce marketing tools — especially its demand-side platform, the Amazon DSP. The benefit for advertisers is that as a result, Amazon is rapidly increasing their targeting options.

    Targeting is great for making the most of your ad spend. With Amazon sales becoming ever more important, learning how to deploy more sophisticated programmatic retargeting is key to staying competitive. The Amazon DSP is an important tool for anyone selling on Amazon — and even for those who don't. 

     

    What is the Amazon DSP?

    Amazon's Demand Side Platform (DSP) enables the programmatic buying and selling of digital advertising on Amazon. It also covers websites, social media platforms, mobile apps and online video channels. It’s suited to advertisers who want to buy display, video and audio ads at scale. And these ads can be purchased by Amazon Seller and Vendors, along with merchants that don’t sell on Amazon at all. 

    DSP has two stand-out attributes.

    1. Automatic ad buying across thousands of different sites
    2. Targeting underpinned by Amazon's purchasing data

    What kind of ads can you buy, and where will they appear? 

    There are three basic types of ads, and they appear in specific places. Unlike Amazon’s Sponsored Product Ads and Sponsored Brand Ads, destinations can be on or off Amazon and the Amazon ecosystem, including your website. This is critical for direct-to-customer businesses.

    Display ads: These are standard banner advertisements and come in a number of different shapes and sizes. If you buy display ads with Amazon DSP, they can feature on: 

    • Amazon
    • Amazon devices
    • Amazon-owned and operated sites — which is more than you might think, and includes: IMDb, Audible, Box Office Mojo, Zappos, Goodreads, Twitch.
    • Across the web

    Video ads: Video ads can appear with video content (OTT), or as an element within a display ad (out-stream video), and can feature on:

    • Amazon sites such as IMDb,
    • Devices such as Fire TV
    • Across the web.

    Audio ads: Amazon is also introducing audio ads as a Beta in the US. Audio ads appear on Amazon Music's free ad-supported tier during breaks in playback.

    Pro tip: 

    Keyword searches do not trigger Amazon DSP ads. You define an audience to target, and Amazon serves up the appropriate ads. This is why targeting options are so important. 

     

    Amazon DSP targeting options

    You can use Amazon DSP to support many advertising goals. For audiences who have already visited your product page, you can remarket to them — especially useful if it’s a long sales cycle/big-ticket item. If you are looking to drive brand awareness, you could reach new customers beyond Amazon, perhaps with a video to introduce your brand or new product.

    Amazon DSP offers thousands of customer segments as well as insight into shopper purchase history and intent. Understanding the different targeting options and then aligning them with your advertising goals is the key to successful advertising with DSP. 

    Pro tip: Amazon has data on everyone's shopping behavior, and by extrapolating from that data, Amazon can determine lifestyle choices, interests, and demographics with relative ease and accuracy. This is the key reason why Amazon DSP is a particularly valuable programmatic platform — even for merchants who don’t sell on Amazon.  

    Amazon DSP Strategy Audit

    Option 1: Behavioural targeting 

    Behavioral Targeting hones in on customers who have carried out specific activities, such as browsing around your category over the past 30 days, or clicking on a specific product listing. You can set these triggers using broader information about your customer base and products.  

    What it's best for: Top-of-Funnel/Awareness

    Pro tip: This advertising type is often used for awareness purposes. This is a good use case for behavioral ads, but your ability to set any number of triggers makes it possible to target shoppers further down the funnel. For example, using this to target repeat visitors can introduce middle-of-funnel use cases.  

    Option 2: Lifestyle targeting 

    Lifestyle targeting shows ads relevant to people who habitually buy from a particular category. This means you can target customers that share characteristics with your existing customers or are interested in brand-relevant categories. For example, targeting scented bath soap at people who buy other luxury bath products.  

    What it's best for: Top-of-Funnel/Awareness

    Pro tip: Our experience shows that these audiences typically have a lower immediate RoAS but generate a higher CLV. This is because they may not need a product of yours immediately, but are a good overall fit for your brand. 

    Option 3: Demographic targeting

    If your customers are in a particular demographic, you can target ads based on age, gender, income or location.

    What it's best for: Top-of-Funnel/Awareness

    Pro tip: Amazon generates demographic data based on accounts. If more than one person is using the account, it can skew the data. Proceed with caution.  

    Option 4: Device targeting

    You can target your ads at specific end-user devices — for example, Android or Apple phones, desktop users, different operating systems, or niche devices like the Amazon Fire tablet.  

    What it's best for: Top-of-Funnel/Awareness

    Pro tip: One thing to consider about this option is your ability to create tailored creatives to match the device. For example, if you know that your ad is only going to display to desktop users, you don’t need to worry about mobile scaling or screen size. This can create a more personalized experience. 

    Option 5: In-Market targeting 

    Being "in-market" defines targets as people in the market for specific products or services. Let's say you are a long-time dog owner. Amazon DSP would identify you as "in-market" for a dog food product. Realistically, this is a more refined version of lifestyle targeting. 

    What it's best for: Middle-Funnel/Consideration

    Pro tip: In-market targeting builds brand awareness but can also drive sales. In-market audiences can be groups of users that demonstrate a high likelihood of purchasing what you're selling. If you were selling a new type of baby monitor, for example, you could target ads directly to new parents, who are in-market for such devices.

    Option 6: Contextual targeting 

    You can display ads to audiences based on what they are browsing right now. With Amazon DSP, you can serve ads exclusively on articles and pages that mention a particular topic and reach people who haven't even bought anything yet.

    What it's best for: Middle-Funnel/Consideration

    Pro tip: This is a great option for driving conversions quickly and encouraging impulse buys. However, this outcome is most applicable to products that have relatively quick sales cycles.  

    Option 7: Remarketing

    Remarketing targets consumers who were close to buying a product or a competitive product. For example, customers that have abandoned their basket, or added a product to a wish list.

    There are many types of Remarketing targets available:

    • Pixel-Based Remarketing: Re-target shoppers on Amazon who have visited your brand's website.
    • ASIN Remarketing: Re-target shoppers who viewed your product on Amazon but didn't make a purchase. 
    • Purchased ASIN Remarketing: Re-target shoppers who have bought one of your products. This is a great way to boost your customer lifetime value (CLV). 
    • Brand Halo Remarketing: Re-target shoppers who viewed other products from your brand. Great for building brand recognition,
    • Similar Product Remarketing (Conquesting): Re-target shoppers browsing similar products to yours. A great way to undermine your competitors by appearing on their Amazon product pages.

    What it's best for: Bottom-of-Funnel/Sales

    Pro tip: To a degree, remarketing is a version of behavioral targeting that more explicitly targets bottom-of-the-funnel shoppers. It’s also just as important to consider the type of remarketing you want to use — make those choices carefully.  

    Unlock the power behind customer data

    Option 8: Audience lookalike 

    Audience lookalike targets customers who share similarities with your current customers. With the volume of data at its disposal, Amazon combines this with collaborative filtering to create detailed consumer profiles.

    What it's best for: Top-of-Funnel/Awareness-Consideration

    Pro tip: This option, particularly, takes advantage of some of the unique data Amazon has available and is something that you should experiment with. 

    Option 9: Advertiser audiences

    If you don’t want to rely solely on first-party Amazon data, the Amazon DSP allows you to leverage third-party data as well. Using pixels, DMP audience transfers and CRM data, you can upload existing customer data and use that to target ads. This is a relatively unique feature of the Amazon DSP compared to other programmatic platforms. 

    What it’s best for: it depends on the data you are supplying

    Pro tip: This option is particularly valuable for direct-to-consumer brands with a lot of existing customer data. Make sure to review the data you have and see how it can be of value within your DSP campaigns. 

    Option 10: Additional custom audiences 

    There are many options to create additional custom audiences. Creating custom audiences lets you take an ASIN or a group of ASINs and target people who have clicked on, purchased, or saw the product and similar options. Keep this in mind and never stop experimenting. 

     

    Understanding attribution

    Targeting is critical to success, but you also need to make sure that you can judge and track that success. Effectively attributing ads is important to figure out what’s working and what’s not. The often long-term outcomes of programmatic advertising can make this hard.

    If you are advertising a product sold on Amazon, there are two ways that DSP track sales — product sales and total sales. For ads sending traffic off-Amazon, you can track the number of conversions — but it won’t provide a dollar amount or type. In all cases, this is a 14-day last touch attribution. A critical point about last-touch attribution with the DSP is that if someone starts by clicking on a sponsored product ad and then is re-targeted by the DSP before converting, the DSP will get all of the credit. Being deliberate in how you track these results is important to make sure you get the outcomes you need from your targeting choice.  

    Pro tip: The default attribution window for standard Amazon PPC (Sponsored Brand, Sponsored Display and Sponsored Product ads) is seven days for Sellers and 14 days for Vendors. This is one more variable to keep in mind when calculating attribution between DSP and PPC ads.   

     

    Data is key to making the right choices

    Fundamentally, choosing the right targeting options comes down to understanding your own advertising priorities. That means understanding your brand, your market and your products. You need as much data as possible about your customers, and analytics tools can help.

    Your options will depend on whether or not you are an Amazon merchant or not. Our background is specific to Amazon, so that’s where we can add the most value. If you want advice on using the tools Amazon supplies for free, check out our two free ebooks: 

    At Nozzle, our mission is to help our customers better understand their customers on Amazon. Our AI-driven analytics platform goes far beyond what Amazon provides to actionable insights that can drive targeting decisions and grow long-term advertising and business success. Get in touch if you want help auditing your campaigns, improving outcomes, or deployed AI and machine learning to increase the effectiveness of your Amazon DSP targeting decisions.

    New call-to-action