As e-commerce sales rise, sellers are relying more and more on ads. In 2021, Amazon had an advertising business of $31 billion, representing a 32% increase.
These developments show how important it is to build your own audience for your brand in order to stand out from competitors. This is where Amazon's demand-side platform (DSP) comes into play. The DSP is a helpful tool for any seller who sells on or even off Amazon.
What is Amazon DSP?
Amazon's Demand-Side Platform, formerly known as Amazon Advertising Platform (AAP), can be used by advertisers to purchase display and video ads. Amazon vendors, sellers, and external third parties, who do not sell on Amazon, can use the DSP.
Based on Amazon's extensive database, DSP allows you to reach customers on and off Amazon and target exclusive Amazon audiences.
Amazon's DSP is fundamentally different from Sponsored Ads in a few ways. Amazon DSP uses a CPM model, so a cost per 1000 viewable impressions, as opposed to PPC, or Pay-Per-Click, as is the case with Sponsored Ads. Advertisers therefore bid on impressions and not on clicks. While with Sponsored Ads you bid on specific keywords and individual ASINs, with DSP you bid on Amazon audiences.
If you are interested in Amazon's DSP, you have two options to get access. You can use the Amazon managed service with a minimum purchase of €10,000 or opt for Enterprise Self-Service, which is available for selected agencies and large companies on request.
Advantages of DSP
Amazon's DSP comes with a number of benefits.
Because DSP allows you to run attention-grabbing display or video campaigns on multiple websites at once, you can achieve extensive reach and increase brand awareness with this approach.
To make these campaigns as promising as possible, be sure to define your target audience. This is where the enormous amount of customer data that Amazon has access to gets in the picture. While Facebook or Google only provide interests and demographic characteristics, the Amazon DSP provides data on search and purchase behavior. This first party data is a huge advantage for advertisers in terms of DSP campaigns, as it allows for more specific targeting of the audience.
In addition to targeting new customers, DSP is also great for retargeting. You therefore have the opportunity to target customers in every stage of the sales funnel, from awareness to loyalty. If you take the data about customers' search and purchase behavior into account here, you can achieve good results in terms of positive brand perception and CTR.
Tips for your DSP Strategy
To get the most out of Amazon DSP, we will share some tips with you here.
1. Set goals for your campaign
It is important that you have clearly defined goals before you set up a campaign. With Amazon's DSP, you have many options and can focus on any area of the sales funnel. To make your campaign as worthwhile as possible, you should think about what you want to achieve with it.
Such goals may for instance include brand awareness, consideration, or even conversion. Depending on the goals, you need to target customers differently and design your DSP campaigns accordingly.
2. Understand your customers and products
You can use the data provided by Amazon to get to know your customers better and tailor your advertising activities accordingly. For example, you can define personas for different product categories and customize your campaigns. Different demographic information and customer buying behavior can be relevant to optimize DSP targeting.
3. Have a sizable budget
You should have at least $3,000 budget monthly for at least 3 months to make DSP campaigns really worthwhile. If your budget is less than that, it probably is more reasonable to invest it in PPC campaigns, as they will provide a higher conversion rate.
4. Choose the right audiences
Choosing the right audiences for your campaign is essential to your success. You can use audiences to target specific groups of people. You have the option to choose prebuilt Amazon audiences or custom audiences. While the pre-built audiences are based on Amazon shopping and streaming signals, the custom audiences are based on shopping interactions with your brand's products or related products in Amazon's store.
Some examples of Audiences Types are:
- Lifestyle (based on customers' Amazon search and buying data).
- Behavioral (based on customers' online behavior)
- Lookalike Audience (people who behave similarly to a group you have selected)
- Contextual (search behavior on other websites is taken into account)
- Advertiser (based on your advertising data)
- Demographic (based on age, gender, income level, education, geography, household size)
- Other options, e.g. selection by browser and devices
In general, the Product Audience is particularly relevant, including ProductViews, ProductPurchases and SimView for competitive targeting.
5. Use appropriate creatives
It's incredibly important to make the creatives you use on DSP appealing. This is the only way to draw customers' attention to your product and run an efficient and effective campaign. To achieve all your goals, be sure to customize your creatives to your target audience.
Needless to say, you should always make sure that your creatives match your brand and products. Accordingly, you will want to include your brand logo to make your brand recognizable. It is also useful to include customer reviews in your creatives, as they reinforce the trustworthiness of your brand.
You can also consider using video content. Often you can reach more customers with videos, or rather convince them more easily of your brand. Another option is to use responsive e-commerce ads. With this new creative type, you can promote multiple ASINs in a single creative, which saves you a lot of time.
6. Be aware of the payout on third party websites
Even though Amazon offers Brand Safety, it doesn't always guarantee that your ads will be displayed only on high-quality sites. However, this is important for the perception of your company.
The halo effect says that attributes of a person or brand are perceived more positively (or negatively) when another distinct attribute is perceived as very positive (or negative). Your DSP ads can therefore be perceived as higher quality on a high quality website than on a low quality website.
7. Analyze campaign performance & optimize
DSP ad results can tell you a lot about customer behavior and segmentation. Amazon campaign reports help you analyze how consumers discover, research, and buy your products. You can use this knowledge from data-driven analytics to optimize your campaigns and marketing strategy.
8. Stay up-to-date
The DSP is always evolving with regular updates and changes. While the platform can be a great opportunity for your business, you should always stay up-to-date to use the platform to your advantage.
The Bottom Line
Amazon's DSP can be a great tool for brands looking to improve their advertising strategies and sales performance. Amazon's data allows for precise targeting across all devices, which can help you attract and engage customers.
As mentioned earlier, it is possible to get access to DSP through an Amazon DSP partner. With such an Amazon approved partner, you have numerous advantages.