How Does Advertising on Amazon DSP Work? Is it Critical for My Business?

Amazon Demand-Side Platform (DSP) is a programmatic advertising platform that allows businesses to reach their target audience across the Amazon ecosystem, including Amazon websites, devices, and apps, as well as third-party websites and apps.

Why should it matter to you?

Amazon Demand Side Advertising IS critical for medium to large businesses because you will gain access to:

A large audience: With Amazon DSP, businesses can reach a massive audience that includes Amazon customers as well as visitors to other websites and apps within Amazon's advertising network.

Targeted Advertising: Amazon DSP provides advanced targeting options, including demographic, behavioral, and contextual targeting. This allows businesses to reach their desired audience with precision, resulting in more effective advertising campaigns.

Brand Safety: Amazon DSP offers brand safety features, such as blocking specific keywords, domains, or apps, which helps to prevent ads from appearing in inappropriate or harmful content.

Measurable results: Amazon DSP provides businesses with detailed reporting and analytics, allowing them to track the performance of their campaigns and optimize their ad spend to achieve better results.

Integration with other Amazon services: Amazon DSP can integrate with other Amazon services, such as Amazon Advertising, Amazon Attribution, and Amazon Personalize, providing businesses with a complete advertising solution.

So, how exactly does it work?

Amazon DSP (Demand-Side Platform) is a programmatic advertising platform that enables advertisers to purchase and display ads across Amazon's websites and apps, as well as third-party websites and apps. Here's how it works:

Advertisers create and upload their ad creatives to Amazon DSP, which includes display ads, video ads, and custom creative units.

Advertisers define their target audience using a variety of targeting options, such as demographics, interests, behaviors, and keywords.

Amazon DSP uses machine learning algorithms to optimize ad delivery and bidding in real-time based on the advertiser's goals and budget.

Amazon DSP places bids on ad inventory across multiple ad exchanges and publisher platforms, competing with other advertisers in real-time auctions.

Amazon DSP delivers the winning ads to the selected audience across different devices and ad formats, and provides detailed reporting and analytics on the performance of the ad campaign.

Interested in running DSP? Reach out for a free consultation!

How are Amazon DSP capabilities unique compared to other DSP Platforms?

Amazon DSP (Demand-Side Platform) has several unique capabilities that set it apart from other DSP platforms. Here are some of the key features that make Amazon DSP unique:

Access to Amazon's first-party data: Amazon DSP has access to Amazon's vast first-party data, which includes data on customer behavior, purchase history, and preferences. This data allows advertisers to target highly relevant audiences based on their shopping habits and interests.

Integration with Amazon's advertising ecosystem: Amazon DSP is fully integrated with Amazon's advertising ecosystem, including Amazon Advertising, Amazon Publisher Services, and Amazon Attribution. This integration provides advertisers with seamless access to Amazon's inventory, reporting, and analytics tools.

Custom audience creation: Amazon DSP allows advertisers to create custom audiences based on their own data, such as CRM data or website data. This allows advertisers to reach highly targeted audiences that are most likely to be interested in their products or services.

Real-time bidding and optimization: Amazon DSP uses real-time bidding and optimization algorithms to maximize the effectiveness of ad campaigns. This means that bids and targeting can be adjusted in real-time to ensure that ads are served to the most relevant audience and at the right price.

Multichannel targeting: Amazon DSP allows advertisers to target audiences across multiple channels, including Amazon sites and apps, third-party websites and apps, and connected TV devices. This multichannel approach helps advertisers reach their target audience wherever they are online.

Proof that it works!

Game-winning examples from a few recognizable brands that use Amazon DSP to run ads and reach their target audience. Here they are:

Samsung: Samsung used Amazon DSP to promote its latest smartphones and tablets during the holiday season. By targeting specific audiences based on their interests and behaviors, Samsung was able to increase its brand awareness and drive more sales through Amazon.

Toyota: Toyota used Amazon DSP to reach in-market car shoppers and promote its new models. By leveraging Amazon's audience data and targeting options, Toyota was able to deliver highly relevant ads to potential buyers and increase its conversion rate.

Nestle: Nestle used Amazon DSP to promote its coffee products and drive sales during the pandemic. By targeting coffee lovers and enthusiasts, Nestle was able to increase its brand awareness and sales on Amazon.

Ancestry: Ancestry used Amazon DSP to reach potential customers interested in genealogy and DNA testing. By leveraging Amazon's audience data and targeting options, Ancestry was able to deliver highly relevant ads to potential buyers and increase its conversion rate.

Colgate: Colgate used Amazon DSP to promote its oral care products and drive sales during the back-to-school season. By targeting parents and students, Colgate was able to increase its brand awareness and sales on Amazon.

Interested in running DSP? Reach out for a free consultation!

Establish an Amazon Demand Side Platform service:

To start advertising on Amazon DSP, you need to follow these steps:

Set up an Amazon Advertising account: If you don't already have an Amazon Advertising account, you will need to create one. You can sign up for an account by visiting the Amazon Advertising website and following the prompts.

Apply for Amazon DSP access: Once you have an Amazon Advertising account, you can apply for access to Amazon DSP. You will need to provide some basic information about your business and your advertising goals.

If you do not meet the minimum spend requirements of one million dollars in ad spend, you can still access the service by working with a third party agency, like Growth Haven, who will likely be able to advertise for you at a cheaper cost, since agency-managed DSP fees are significantly lower than Amazon-managed DSP fees.

Once you have access to Amazon DSP, you can create your campaign. You will need to select your targeting options, ad format, and ad creative. You can also set your bid and budget for the campaign.

Launch your campaign: Once you have set up your campaign, you can launch it. Amazon DSP will begin serving your ads to your target audience across different platforms and devices.

Monitor and optimize your campaign: After your campaign is launched, you can monitor its performance and make adjustments as needed. You can use Amazon's reporting and analytics tools to track key metrics, such as impressions, clicks, and conversions. You can also adjust your targeting, bid, and budget to optimize your campaign for better results.

Overall, advertising on Amazon DSP can be a powerful way to reach your target audience and drive sales on Amazon and other platforms. By following these steps, you can start running your own campaigns on Amazon DSP and see the results for yourself.

If any of this is confusing to you, or you would like to know more about running a successful DSP program, please don’t hesitate to contact us for a FREE consultation!

How much ad spend should I invest in DSP if we’re to get started?

The percentage of ad spend that should be invested in DSP (Demand-Side Platform) can vary depending on several factors, including your advertising goals, your target audience, your industry, and your budget. In general, there is no one-size-fits-all answer to this question, as different businesses may have different priorities and strategies for their advertising spend.

However, as a rough guideline, some industry experts suggest that businesses allocate around 20-30% of their digital advertising budget to programmatic advertising, which includes DSP. This percentage can be higher or lower depending on your specific needs and goals.

It's important to note that investing in DSP can provide several benefits, including the ability to target specific audiences with highly relevant ads, access to real-time bidding and optimization, and the ability to track and measure the performance of your campaigns. However, it's also important to consider other factors, such as the cost of ad inventory and the competition for ad space, when determining how much to invest in DSP.

Ultimately, the best approach is to analyze your own business goals, target audience, and budget, and determine the right mix of advertising channels that will help you achieve your objectives most effectively.

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