Amazon Demand Side Platform: What Advertisers Need To Know

Say you’re an advertiser trying to promote a new line of eco-friendly kitchen products among homeowners in Florida. You ideally want to reach an audience with the following characteristics:

• Environmentally conscious 

• Frequently shop for kitchenware

• Age between 35-45

• Located in Florida

Traditionally, achieving this level of precision demanded hours and hours of manual targeting. This is where programmatic advertising comes and makes a difference. It is a powerful advertising tech that uses automation and data-driven insights to help you reach your ideal target audience. 

Now, a really powerful and popular programmatic advertising tool available today is the Amazon Demand Side Platform (DSP). In this comprehensive guide, we’ll explore what Amazon DSP is and how to integrate it into your marketing funnel.

What is Amazon demand-side platform?

Technically, Amazon DSP is an Amazon-focused software that facilitates automated and centralized buying of digital ads from multiple sources. In layperson’s terms, it is an ad platform created for sellers and advertisers to engage off-Amazon audiences and bring them to an online store. The most unique aspect of Amazon DSP is that you can use it to promote products that are not even sold on Amazon. 

The goal of DSP is simple - to give you access to the most effective ad placements so that you reach the right audience at the right time. As a result, any ad campaign that runs through a DSP has a higher chance of success and greater return on ad spend (RoAS).

Amazon DSP currently supports three key ad types:

• Video Ads: Non-skippable OTT video ads for streaming platforms and skippable OLV video ads for websites.

• Audio Ads: Short audio ads on mobile apps like Amazon Music and partner services.

• Display Ads: Fully customizable display ads with options to add your brand logos, headlines, and images. 

Amazon DSP enables your ads to appear on first-party platforms like Prime Video, Twitch, and Fire TV, as well as premium third-party sites and apps through Amazon Publisher Direct and exchanges.

Key terms you need to know about Amazon DSP

Before we proceed further, it is important to know certain key terms related to Amazon DSP so that you can better navigate DSP onboarding space: 

• Dashboard: It is the main control center of all your advertising campaigns in DSP. It gives you a brief overview of your key metrics and campaign performance. 

• Line Items: It represents a specific ad placement within an advertising campaign in DSP. It includes details like targeting criteria set, creative assets used, bid strategy employed, budget allocated, etc. 

• Orders: It is a collection of line items. The line items in an order fall under the same campaign and have common standard settings. 

• Ad Exchange: It is a digital marketplace connecting advertisers and publishers. The former bids in real-time to buy digital ads from the latter. 

• Ad Server: These are tools that enable advertisers and publishers to manage and distribute ads across various channels. Ad servers are responsible for ensuring that the right ads are delivered to the right audience on the right device.

• Real-Time Bidding (RTB): It is a programmatic advertising process where ad impressions are bought and sold through real-time auctions. In DSP, advertisers bid on impressions that match their targeting criteria. The highest bidder secures the ad placement.

What is the difference between Amazon DSP and sponsored ads?

If you are not new to Amazon advertising, you might wonder how exactly Amazon DSP is different from Sponsored ads. This confusion is quite natural as there are a lot of similarities between the two. After all, both offer different targeting options, support multiple ad formats, and provide reporting tools to track campaign performance.

But the similarities end there. There is a world of difference between the two advertising platforms. Here are the key differences:

How much does Amazon DSP cost?

When compared to other Amazon advertising options, there is a big difference in the pricing model of Amazon DSP. It works on the Cost Per Thousand Impressions (CPM) approach rather than the more common and traditional Pay-Per-Click (PPC) model. This means if you are using DSP advertising, you will pay based on the number of times your ad is displayed rather than user interactions.  

Now, as far as the actual cost is concerned, it depends on the pricing model you choose:

1. Managed Service – This is often chosen by those who want support and expert guidance in running DSP campaigns. It includes access to Amazon DSP inventory along with strategic consultation. As a result of such personalized services, you need to make a minimum investment of approximately $50,000. This will vary based on your country. 

Alternatively, you can work with an Amazon Advertising Sales Partner. They will either manage the campaigns for you or provide access for self-management. Partner rates will vary considerably but usually start around $5,000 per month. 

2. Self-Service – This option is designed for advertisers who want direct control over their campaigns. By leveraging Amazon’s automated bidding system, you can adjust your ad spend based on placement and format. For those testing the platform, a basic retargeting campaign typically starts at around $3,000. This is ideal for those who want to test DSP’s effectiveness before scaling the investment. 

Why should advertisers use Amazon DSP?

Despite the obvious high cost of Amazon DSP, this advertising platform is still recommended for many advertisers because of the following reasons: 

Reach more audiences and increase visibility

Amazon DSP allows you to access Amazon’s extensive first-party data. This means your ads will appear in premium placements like Fire TV, Kindle, Prime Video, and across hundreds of third-party platforms. It helps you reach millions of potential customers and boost visibility within and beyond the Amazon ecosystem.

Build your brand with specific audiences

The USP of Amazon DSP is its razor-sharp targeting. In other words, you can serve your products ads to highly specific audiences via DSP. It could be something as definite as potential customers who have purchased your competitor’s products or potential customers who have shown interest in a now-discontinued product. This precise targeting helps build brand awareness, mostly among audiences who are already inclined toward your product category. 

Ability to segment audiences

Amazon DSP enables you to segment audiences, thereby maximizing the efficiency of your campaigns. By dividing your target market into specific groups based on different parameters, you can deliver highly relevant ads. Additionally, segmentation helps optimize your ad spend by ensuring your budget is directed toward high-intent users. It also allows for better performance tracking, enabling you to analyze which segments respond best and refine your strategy accordingly. 

Improve conversion rates

Amazon DSP lets you target users who are further along your purchase funnel. For example, you can focus on retargeting past visitors. This enables you to deliver personalized ads that trigger relevant action, which results in higher click-through rates (CTR) and improved conversion rates. You, as an advertiser, then ultimately enjoy a better return on investment.

How do you integrate Amazon DSP into your marketing funnel?

Amazon DSP can fit across your marketing funnel, right from building brand awareness to driving purchases. Its powerful retargeting capabilities ensure that your brand stays top-of-mind for both potential and existing customers. Here’s how DSP fits into all four stages of the marketing funnel:

1. Awareness

Amazon DSP operates on a CPM model. This means DSP’s primary strength lies in boosting brand visibility as it focuses on maximizing exposure rather than just driving immediate clicks or conversions. To maximize the efficacy of DSP in this stage, you need to engage consumers across multiple touchpoints, including Amazon-owned sites and third-party sites. For example, you can run branded video ads across high-traffic platforms such as Prime Video to build brand recognition and create initial engagement. 

2. Consideration

At this stage, your goal is usually to increase the chances of consumers choosing your brand when they are exploring options. This is the ideal time to reinforce your brand’s messaging through compelling video and display ads on Amazon DSP. Strategies such as showcasing positive reviews or testimonials can build trust and credibility. Don’t forget to add strategically placed call-to-action buttons within ads that can help drive action.

3. Conversion

Amazon DSP plays a key role in retargeting users who have already shown interest in a product. By delivering personalized ads to shoppers who have previously engaged with your brand—such as those who browsed a product page but didn’t purchase—you can reinforce your offerings. You can also gently nudge users toward completing their orders. One common strategy is to highlight limited-time discounts or special deals using display ads to increase conversions and boost sales.

4. Loyalty

While some businesses may not focus on advertising at this stage, brands looking to cultivate long-term relationships with customers can leverage Amazon DSP for retention strategies. By serving personalized ads to past buyers—featuring complementary/related products or exclusive offers, you can encourage repeat purchases and strengthen customer relationships. This approach not only boosts customer lifetime value but also turns satisfied buyers into advocates who promote your brand organically.

How can Atom11 help?

Atom11 is a powerful Amazon PPC advertising automation software designed to maximize ad efficiency for you. Unlike traditional ad platforms, Atom11 integrates key retail signals such as inventory, pricing, and buy box status with Amazon ads to give better spend efficiency to sellers and agencies.

By leveraging real-time data from inventory and pricing trends, our suite of ad tech solutions help you optimize your bids and adjust ad spend based on product availability. This helps you maintain profitability across all your campaigns. Put simply, it is the only advertising tool you need to scale on the Amazon website. Book a demo to start your journey with Atom11.

Frequently Asked Questions

Who uses Amazon demand-side platform?

Amazon DSP is used by brand advertisers and ad agencies. It is available to both– those who sell products on Amazon and those who don’t.

What is the minimum spend for Amazon DSP?

It depends on your agency and service provider. It can be as low as $5000, but since DSP is an upper funnel service, advertisers may not see substantial impact at low spends.

What is programmatic advertising?

It is a modern advertising technology that automates the whole process of buying and selling digital ads. It helps serve relevant ad impressions to the relevant audiences at the right time.

What is Amazon attribution?

It is a free advertising and analytics solution from Amazon. Through this tool, you get access to valuable insights about the impact of your marketing strategies across non-Amazon channels. 

What is the difference between self-service DSP and managed-service DSP?

Self-service DSP is a model where you handle all the aspects of campaign setup and optimization within DSP. But in managed-service DSP, a dedicated team from Amazon will help you manage your Amazon DSP account. The choice depends on how much expertise you have and the control you want over the Amazon DSP campaigns and ad products. 

How does budgeting work on Amazon DSP?

On Amazon’s DSP, budgeting is flexible. You can set everything from daily to lifetime campaign budgets. You can even control spend by adjusting bids and pacing based on performance and goals.

Is Amazon DSP the same as Amazon Advertising Platform?

Yes, both are the same. Amazon DSP was previously called Amazon Advertising Platform.