What Is Amazon DSP In 2023? (All You Need to Know)
Amazon DSP (Demand-Side Platform) enables advertisers to leverage Amazon‘s rich data and advanced targeting capabilities to connect with consumers both on and off Amazon sites. With Amazon capturing nearly 9% of the US digital ad market share in 2022 and on pace to become the #3 ad platform behind Google and Facebook, understanding Amazon DSP is crucial for brands looking to engage today‘s omnichannel shoppers.
In this comprehensive guide, we’ll cover everything sellers and advertisers need to know about tapping into Amazon’s DSP platform in 2023 and beyond:
A Quick Primer: What Is Amazon DSP?
Amazon DSP (Demand-Side Platform) is a programmatic ad buying platform that allows advertisers to automatically bid on and purchase ad impressions across Amazon’s owned-and-operated sites as well as premium third-party publishers and platforms.
Instead of manually negotiating and purchasing ad placements, Amazon DSP uses sophisticated algorithms and automation to bid on each ad opportunity in real-time to deliver your ads to the right audience at the optimal price point.
By tapping into Amazon’s rich data on interests, shopping behavior, and intent, DSP campaigns can achieve incredibly advanced targeting compared to standard display and sponsored ad buying.
In 2022, over 15% of Amazon’s total ad revenue came from programmatic channels like Amazon DSP, up over 50% year-over-year. As Amazon continues growing into an ad juggernaut projected to capture over 10% of total US digital ad spend by 2023, understanding how to leverage Amazon DSP only becomes more crucial for advertisers.
Why Choose Amazon DSP for Advertising?
For brands looking to engage the lucrative Amazon audience both on and off the marketplace, here are some of the key advantages Amazon DSP provides:
Leverage Amazon’s Robust Shopper Data
Amazon’s data on shopping patterns, browsing history, purchases, preferences, and more provides advertisers unparalleled ability to understand intent and create targeted audience segments beyond just demographics.
Harness the Power of Programmatic Advertising
Amazon DSP brings the efficiency, automation, and optimization of programmatic ad buying to Amazon’s highly valuable commerce data and inventory.
Access Premium Ad Inventory
DSP opens up brand access to reserved Amazon ad inventory including video, audio, and high-impact display placements.
Sequential, Cross-Channel Messaging
Follow users across devices and platforms, sending sequenced messages tailored to where they are in the sales funnel.
Algorithmic Optimization & Performance
Amazon‘s machine learning optimization adjusts bids, targeting, creative, and more dynamically to improve campaign performance.
Self-Service Options for All Sizes
Self-service accounts have no minimums. Managed service is available for those wanting more support and guidance.
Why Amazon Sellers Should Pay Special Attention
For merchants already selling on Amazon, DSP unlocks new capabilities to drive product launches, promotions, brand awareness, and sales both on and off Amazon sites. As shopper purchasing increasingly fragments across channels, Amazon DSP provides powerful tools for sellers to engage omni-channel audiences.
How Does Amazon DSP Work?
Amazon DSP replaces manual media buying with automated, optimized programmatic ad purchasing fueled by Amazon’s data. At a high level, it works like this:
Advertisers Set Campaign Parameters
Specify budgets, durations, ad formats, audiences, positioning, goals and other criteria.
Amazon Identifies Relevant Ad Inventory
Analyzes ad supply across millions of impressions on Amazon sites and apps as well as third-party publishers and platforms.
Amazon Bids on the Best Opportunities
Proprietary algorithms determine optimal bids for each impression opportunity based on campaign parameters and Amazon‘s unique shopper data.
Ads Are Served to Target Audiences
When Amazon wins the impression auction, ads are shown to desired audiences across platforms.
Performance Data Continuously Optimizes
As campaign data comes in, Amazon‘s systems adjust targeting, creatives, bids and more to improve performance.
Detailed Reporting Provides Insights
Access campaign performance metrics and data to glean insights and refine strategies.
Rather than placing ads manually, Amazon DSP automates the heavy lifting so brands can focus on strategy, creative, and audience insights.
Breaking Down Amazon DSP Audiences, Targeting, and Insights
One of the most powerful elements of Amazon DSP is the ability to leverage Amazon’s data to identify and engage audiences with precision beyond just demographics and interests.
Shopper Profiles
Leverage Amazon‘s real-time view of shopper profiles, buying history, browsing patterns and product affinity to create highly targeted segments.
Custom & Lookalike Audiences
Build custom audiences from your existing customer lists or create lookalike audiences that resemble your existing customers.
In-Market Audiences
Engage consumers actively in-market for products related to yours based on their shopping patterns.
Competitive Conquesting
Target another brand‘s customers to promote your alternative products.
Contextual Targeting
Place ads next to relevant content across publishers based on your products, brand, keywords.
Geographic & Device Targeting
Target specific regions, cities, DMAs, zip codes, etc and tailor ads by device types.
Sequencing Across Buyer Journey
Engage users at different funnel stages with messaging tailored to awareness, consideration, evaluation, and purchase cycles.
Cross-Channel Optimization
Amazon DSP learns across channels and devices to determine optimal messaging sequences and spend allocation.
These are just a sampling of the audience segmentation and targeting capabilities opened up by Amazon DSP. The key is that Amazon DSP moves beyond cookie-based approaches reliant on inferred data. Instead, it leverages Amazon‘s direct shopper insights to engage audiences based on their actual shopping patterns and behavior.
Activating Your Brand Across Amazon DSP Ad Formats
Amazon DSP provides flexibility to serve branded messages across a range of ad formats:
Sponsored Brand Video
Engage audiences through sight, sound, and motion with video ads up to 3 minutes long.
Sponsored Display
Increase brand visibility and awareness using high-impact display banners.
Sponsored Product Ads
Promote specific products and offers with dedicated display ads.
Audio
Embed audio ads into podcasts and music streaming.
Custom Display & Video
Design unique creatives or use Amazon‘s templated options to build ads leveraging your brand assets.
The key is strategically activating the right formats and creatives to achieve your awareness, consideration, and conversion goals across the buyer journey. For example, video can increase early-funnel brand awareness while lower-funnel product ads help drive conversions.
Choosing the Right Amazon DSP Buying Approach
Amazon DSP is available via two models to suit your needs:
Self-Service
The self-service option allows brands to directly control Amazon DSP campaigns and self-optimize performance. No minimum spend is required. This provides flexibility for businesses to experiment with leveraging Amazon‘s valuabe shopper data and inventory.
Managed-Service
For those wanting more guidance and account management, Amazon‘s team can work with you to execute and optimize DSP campaigns. Managed service accounts tend to have minimum spends between $35,000-$100,000 per year.
Regardless of which buying method you select, the capabilities unlocked by Amazon DSP remain the same. Self-service simply offers more direct control while managed-service provides extra direction and optimization support.
Conclusion
Amazon DSP opens up game-changing opportunities for brands to engage high-intent shopper audiences both on and off Amazon sites. Backed by Amazon‘s rich commerce data and advanced targeting capabilities, DSP delivers a new level of precision and automation to drive measurable awareness, consideration and sales.
Whether you‘re an established Amazon seller or just starting out on the marketplace, Amazon DSP is an invaluable tool to amplify your brand across Amazon‘s owned-and-operated properties and beyond. With more shoppers starting their buying journeys on Amazon, understanding Amazon DSP only becomes more important in 2023 and forward.