August 9th, 2020
The past few years have seen Amazon’s rapid rise as an advertising powerhouse. Amazon Advertising is now the third-largest digital advertising platform in the US. This growth has been powered by Amazon’s relentless efforts to build or buy advanced advertising technology to leverage its unmatched trove of customer data. The freshly updated Amazon DSP (demand-side platform) is an important part of this strategy.
Amazon DSP combines two of the most powerful forces in advertising today – the effortless scalability and optimization of programmatic advertising and the wealth of granular customer data available with Amazon – to enable advertisers to accurately target customers across Amazon properties and beyond.
Additionally, when you consider that Amazon DSP makes precious Amazon data and exclusive ad real estates such as IMDb, Fire TV, and Audible available to advertisers regardless of whether they sell on Amazon or not, it’s no surprise that Amazon DSP has grown by leaps and bounds over the last few quarters.
WHAT IS AMAZON DSP?
Amazon DSP (previously known as Amazon Advertising Platform, or AAP) is a tool that leverages Amazon’s unparalleled customer data to enable advertisers to buy digital ad space programmatically, both on Amazon properties and publishing partners as well as third party exchanges. In other words, Amazon DSP automates the process of buying display, audio, and video ads on and off Amazon, using Amazon’s customer data.
Amazon DSP works on a dynamic CPM (cost-per-thousand-impressions) model, unlike the search advertising products on Amazon Ad Console that work on a pay-per-click (PPC) model. This means that Amazon’s machine learning layered algorithm uses the parameters you set to bid in real-time on opportunities that can land your ad in front of your target audience while staying within budget.
As with most CPM models, your results with Amazon DSP will depend partly on the quality of your content. What is unique about Amazon DSP is that while most CPM products are best suited to top of funnel targeting, Amazon DSP allows full-funnel targeting through its customer data that captures shoppers’ behavior, from search to purchase.
WHY YOU SHOULD BE LEVERAGING AMAZON DSP
Amazon DSP Amazon has an edge over its competitors for the following reasons:
1. Leverage Amazon’s exclusive customer data for accurate targeting and remarketing.
Studies show that more than half of US consumers begin their online searches on Amazon. Plus, Amazon made over $250 billion in retail sales in the US in 2018, accounting for nearly half of the online retail spend in the country. Consequently, Amazon has unmatched insights into online shoppers at different stages of the customer journey. What’s more, Amazon can track customer behavior at the bottom of the funnel, so its data is based on purchasing behavior, making it particularly valuable for targeting in-market shoppers who are very close to making a purchase. The granularity of its data also enables accurate targeting of lifestyle audiences (shoppers who share similar interests).
2. Access Amazon-owned properties and partner exchanges.
Amazon DSP is the only tool through which advertisers who don’t sell on Amazon can advertise on sites, apps, and devices owned and operated by Amazon (such as Fire TV, IMDb, Kindle, Echo, and Audible). Additionally, they can use Amazon Publishing Services (APS) and leading third-party ad exchanges to bid directly on other high-quality publishers’ sites.
3. Scale-up advertising efforts quickly.
Amazon DSP is well suited to brands that are looking to accelerate their advertising efforts easily and efficiently. Brands can choose to have an agency manage their advertising through the Enterprise Self Service (ESS) portal or opt for Amazon Managed Service. Either way, the advertising is programmatic and is supported by the platform’s machine learning layered algorithms that facilitate bulk actions, advanced reporting, rapid experimentation, and optimization.
WHAT ARE THE TYPES OF ADS SUPPORTED BY AMAZON DSP?
Amazon DSP ads appear in the following forms:
1. Website display ads on desktop and mobile
These ads appear on websites, which are viewed either on desktop or mobile, in seven different sizes.
2. Mobile app and banner display ads
These ads appear within mobile apps on iOS platforms, Fire Tablet, and Android. Of the four ad formats, three are shaped like banners.
3. Mobile interstitial ads
These ads (full screen or medium rectangle) are displayed inside mobile apps for a short period during natural transition points. They can be dismissed by the user by clicking the “close” button in the upper right-hand corner.
4. Video ads
Video ads may be out-stream (not part of an existing video) or instream (when a video ad plays before, after, or during another video). Amazon offers a “brand-safe environment” for video ads by playing them exclusively on Amazon-owned properties like Fire TV.
WHAT ARE THE TARGETING OPTIONS OFFERED BY AMAZON DSP?
Advertisers have six unique targeting options on Amazon DSP:
|Behavioral||Audiences who have displayed specific behaviors, such as buying or browsing similar products in the last 30 days|
|Lifestyle||Audiences who have displayed search and buying behaviors associated with a specific/common lifestyle e.g. vegans, outdoorsmen|
|Contextual||Audiences who display an interest in your product by browsing thematically related products on other websites|
|Remarketing||Audiences who have nearly bought your product or a competitive product i.e. searched for, viewed, placed in cart|
|Audience Lookalike||Audiences with similar shopping behaviors as your customers or your competitor’s customers|
|Advertiser Audiences||Audiences provided by the brand by leveraging data such as a website page with a tracking pixel, a hashed email list, or data from a CRM database|
HOW CAN ADVERTISERS START USING AMAZON DSP?
To start your Amazon Advertising journey, you can choose between two management options:
- Amazon Managed Services allows Amazon’s advertising team to manage the advertising campaign, but a minimum spend of US$ 35,000 is usually required. Brands with less DSP advertising experience will benefit from this service.
- Enterprise Self-Service allows brands full control of their advertising campaigns, albeit through an agency. Amazon recommends a budget of at least US$ 10,000 for no less than three months.
Amazon DSP is one of the most efficient ways for brands to leverage Amazon data and ad inventory to target and engage customers across the funnel, from brand awareness to consideration to purchase and brand loyalty. This rapidly evolving platform is ideal for brands that are willing to invest in a good digital marketing team and have the time and budgets for a long-term advertising strategy.
Read our post “Sponsored Display Ads for Brand Awareness” to understand how advertisers can engage audiences on and off Amazon with display ads.
Intentwise is a Chicago-based technology company that helps brands, sellers, and agencies maximize returns from Amazon advertising spend. Intentwise’s industry-leading SaaS platform provides impactful recommendations and automation to accelerate advertising optimization while saving valuable time for advertisers.