Everything You Need to Know About Amazon DSP


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Let’s talk Amazon DSP.

Long story short, it’s how you’re going to go above and beyond with your Amazon Advertising.

As you might know, advertising on Amazon is broken up into two divisions:

 

  1. Amazon Advertising Console
  2. Amazon DSP

 

The first manages PPC ads. The second display ads.

 

We previously showed why Amazon Advertising Console is so great. Now, we would like to discuss how things can get even greater with Amazon DSP.

But before we do, how about we get a few things straight.

There’s a good chance if you’re reading this, you are a marketing manager, online advertiser, business owner, or someone with some position in some business trying to sell some product or some service. Which means you probably use a lot more acronyms and technical wordage than is socially acceptable.

Programmatically. Ad inventory. Brand halo. In-stream. Out-stream. Contextual targeting. Conquesting. Basket building. Product weaving. Audience knitting. ASIN. RoAS. CPC. CPM. PPC. PPE. YOLO.

The list goes on.

And that’s just related to Amazon DSP.

It’s no wonder your everyday Joe, Jane, and Alexa has no idea what we’re talking about.

Take Amazon’s own video explaining how Amazon DSP works:

 

Yeesh, that was boring.

Did you make it to the end? We didn’t.

If you’re like us, you probably zoned out after twelve seconds and started wondering why there are so many dishes still in the sink. (Is it just us or are there always dishes to clean? Come on sink, throw us a bone.)

Our goal here is to take everything conveyed in that video and discuss it in a way that everyone can benefit from… while remaining awake.

Though it might seem complex at times, once you drop all the marketing jargon, Amazon DSP is a pretty simple thing to grasp. However, that doesn’t mean it’s easy to implement. But we’re going to help you with that, too.

By the end, you will know how Amazon DSP works and how to use it to get the biggest bang for your marketing buck.

Maybe we’ll even have some laughs along the way. Who can say what will happen?

You’re a human.

We’re human.

You know what’s nice sometimes? Talking like humans.

So let’s go over Amazon DSP in a way humans, like you and us, can enjoy.

What is Amazon DSP?

Amazon DSP is a demand-side platform (hence the “DSP”) that lets brands programmatically buy advertising inventory across Amazon sites and apps, as well as third-party exchanges, to reach relevant audiences at scale using display and video ads.

That’s the boring non-human definition.

Our definition?

Amazon DSP is the $H1T.

That’s pretty much all you need to know.

Welp, our work here is done. Thanks for stopping by. You can see yourself out.

Actually, on second thought, you need to know a little more than that. (But that’s the main gist.)

Basically, Amazon DSP lets you use Amazon’s secret sauce (aka shopper data) to reach people all over the Internet who have a very high likelihood of buying what you’re selling.

Cool, right?

Let’s break down the key parts of that overly-technical definition above.

 

  • Demand Side Platform – A system that makes it super easy to buy advertising space in a lot of different places on the Internet.
  • Programmatically Buy – An automated process to get your ads in front of the right people at the right time. (Hence “programmatic” instead of “manual.”) You set a budget and goals, and a super-smart algorithm selects the best place to show your ad.
  • Ad Inventory – The amount of space on a website or app available for advertisements.
  • Third-Party Exchanges – Places that are not Amazon.
  • Relevant Audiences at Scale – Your ads are matched with the people most likely to interact based on their online activity, interests, location, and buying habits. Your ads then appear to those people in a lot of different places.

 

In other words, all those fancy words mean that Amazon DSP lets you create hyper-targeted ad campaigns that make the best use of your budget.

Seriously, programmatically? Who says that?

So to review,  Amazon DSP is:

 

  • For sellers, a way to retarget their target audience.
  • For buyers, ads following you around the Internet.

 

You know when you look at a product on one site and then start seeing ads for it everywhere else and wonder whether your computer can read your mind?

Well, it’s not your computer being telepathic. It’s Amazon DSP being awesome.

Amazon DSP efficiently and effectively remarkets to consumers who have previously viewed your products. In return, you pay per impression. (As opposed to paying per ad click on Amazon Advertising Console.)

In the end, everyone comes out a happy winner. (So long as you have a good strategy in place. Don’t worry, we’ll get to that.)

To be fair, demand-side platforms and remarketing aren’t just an Amazon thing. Facebook, Google, and LinkedIn also have similar platforms.

But Amazon DSP takes DSP-ing to a whole other level.

Why Amazon DSP is So Awesome

Amazon DSP has a unique advantage over all other online advertising platforms, namely, because it’s from Amazon.

A good DSP provides access to advertising opportunities on hundreds of thousands of apps and websites. Which is something pretty much all the top DSPs do, including Amazon DSP. But Amazon DSP has something else no does — access to data about people who shop on Amazon.

This alone makes Amazon DSP stand out from all the rest and is what makes it so awesome.

Amazon is the most popular, most used, and most profitable eCommerce platform in the history of everything. As a result, they collect a ton of data – data about shopper behavior, shopper demographics, shopper geographics, product supply, product demand, product types, and the fact you own an excessive amount of Chia Pets.

In other words, consumer data is gold.

In fact, it’s better than gold.

It’s like gold covered in chocolate with pepperoni on top, served to you on a diamond platter by The Rock in a unicorn t-shirt that says “Always Be You.”

That is to say that data is the single most important currency in eCommerce.

And Amazon has a monopoly on it.

Best of all, you can tap into all that sweet, sweet data using Amazon DSP. It provides you with an all-access, golden ticket to the best consumer marketing intelligence on the planet.

Equipped with this data (collected in real-time by the way), you can create uber-relevant ad campaigns that target audience segments specific to your product like on no other platform.

How?

Let Amazon’s automated AI use that data to generate dynamic eCommerce ads.

Amazon’s AI pulls from the billions of behavior data points at their disposal to create a unique ad tailored around your product for your ideal customer. If that customer is an impulse buyer, Amazon generates an ad with a “Shop Now” button. If they rely on reviews to make decisions, Amazon shows them an ad featuring 5-star reviews. If they love coupons, the ad will include a coupon.

Bryan Cranston Drop The Mic GIF - BryanCranston DropTheMic MicDrop GIFs

Amazon DSP knows what people are searching for when they are most likely to make a purchase, and automatically adjusts your ads accordingly, so they reach those buyers at the best possible moment. That creates a huge advantage over other demand-side platforms and means you will sell better, cheaper.

So yeah, pretty awesome. And coupled with a holistic Amazon organic and ads strategy, you’ll be rakin’ in the sales.

The Two Ad Types Used by Amazon DSP

Now that we know why you should be using Amazon DSP, let’s take a look at what you can actually do with it, starting with the ad types it offers.

These are:

 

  • Display Ads
  • Video Ads

 

Display ads are graphics-based, visual promotions that appear on websites, apps, or social media through banners, text, images, video, and audio. They are used to deliver messaging and attract users of those services.

When someone clicks your display ad, they can be taken to either one of your product pages, your Amazon Store, a custom landing page on Amazon, or to your website. Your choice. Heck, you can even send them to someone else’s website if you want. We won’t judge. Point is, to use display ads you don’t even need to sell your products on Amazon. Which means everyone can take advantage of Amazon DSP.

Isn’t inclusivity fun?

Video ads are pretty much exactly how they sound. They are ads that contain moving images. There are two ways to incorporate video ads into your Amazon advertising: as standalone videos or as a creative element within a display ad.

Standalone video ads have two additional versions:

 

  • In-Stream Video Ad – Ads that appear as part of other video content, either before, during or after
  • Out-Stream Video Ad – Ads that appear entirely on their own on a webpage or app, typically in a space where’d you see a display ad

 

Both video and display ads can be bought using a pay per impression model. Display ads track cost-per-mille (aka CPM or cost-per-thousand views). Video ads use cost-per-view (CPV).

Did things just start to get boring? Almost, right?

Talking about advertising payment models will do that. If you’re not careful, those acronyms will creep up on you.

So let’s shift gears and get back to the whole acting human thing.

Hmmm … where should we go next …. oh we know!

Why not one of the things humans like most — making money.

How Can Amazon ASP Help You Reach Your Goals in Two Simple Steps

Let’s stop beating around the bush and get down to brass tacks. You’re here to turn a profit.

But money doesn’t grow on trees. It comes from Mints.

Also, high-converting Amazon ads.

In order to start seeing that green, you need to set up winning ads.

Step 1: Learn the Types of Amazon DSP Targeting Methods

If you’re like us, you probably think about the sales funnel a lot. Like, the best ways to reach every level of the customer journey and which type of marketing mediums are best suited for each. Luckily, if you’re using Amazon Advertising, you won’t have to do much reaching, or thinking.

That’s what we call living the dream.

As a whole, If you’re a brand that sells products, Amazon Advertising is one of the best, if not the best, full-funnel advertising solutions. To that end, there are several audience targeting options to make all that happen.

 

  • Contextual – Target shoppers actively looking for products related to your brand
  • Lookalike – Target shoppers who share similar shopping habits and demographics as your current customers
  • Lifestyle – Target shoppers whose search and shopping behaviors correspond to specific lifestyle groups such as pet lovers, vegetarians, or homeowners
  • In-Market – Target shoppers who have shown intent within the past 30-days to purchase a product related to yours on Amazon
  • Advertiser Audiences – Target shoppers from your preexisting contact lists and CRM information. Works really well with lookalike audiences
  • Remarketing (aka Product Audiences) – Target shoppers who searched, considered, or purchased products similar to your own on Amazon

Step 2: Pick the Amazon DSP Targeting Method Right For You

The section of the sales funnel you want to target will indicate which targeting method you should use. Though figuring that out requires some constructive thinking. Who has time for that?

Luckily, there’s a graphic for that!

To further help, let’s take a look at some of the most popular methods to cover each section of the sales funnel.

Amazon Remarketing

When you want to reach the bottom of your sales funnel.

Remarketing (or retargeting) is nothing new.

Most of you have been serving targeted ads to people who have already visited or taken action on your website since the dawn of pixel-based online advertising. (Or at least we hope you have.) But, hey, if something works, stick with it.

Remarketing on Amazon is a great way to reach people with a strong purchase intent.

Oh yeah, and Amazon remarketing has a typically high RoAS. “Return on ad spend” and is a handy metric to evaluate your campaign’s targeting success.

Revenue ÷ Spend = RoAS

An example of a bad RoAS is 50%, which means for every dollar you spend, you only get 50 cents in return, aka you are losing money and are sad. An example of a good RoAS is 400%, which means for every dollar you spend, you get four dollars in return, aka you are making money and are happy.

Of course, you shouldn’t settle for just a “good” return on spend. You want a GREEEAAAAT! return on spend. Remarketing ad campaigns is the ticket. Think of them as the Frosted Flakes of ad targeting.

We’re talking a RoAS of 1,000% plus!

Here are several different ways they can get you there:

  • Pixel-Based Remarketing – Retarget shoppers on Amazon who have visited your brand’s website. This is the type of remarketing you’re probably most familiar with.
  • ASIN Remarketing – Retarget shoppers who viewed your product on Amazon but didn’t make a purchase. Instead of an external pixel, this method uses your product’s Amazon Standard Identification Number, or ASIN. For example, say someone looks at the product detail page for your Nicolas Cage t-shirt. This method shows them ads with that shirt in them everywhere they go on the Internet. At a bare minimum, if you sell on Amazon, you should try ASIN remarketing campaigns, especially if you sell products that have a long purchase cycle or Nicolas Cage’s face on them.
  • Purchased ASIN Remarketing – Retarget shoppers who have bought one of your products. If someone buys a t-shirt with Nicolas Cage’s face on it, there’s a good chance they will want to further Cage-face their wardrobe, so show them ads for matching socks. This is a great way to boost your lifetime customer value (LCV). And buy more Nicolas Cage apparel.
  • Brand Halo Remarketing – Retarget shoppers who viewed other products from your brand. Because if they’re interested in having Nicolas Cage on their clothing, they’d probably like it on everything they own. That’s just math. Great for building brand recognition and tapping into Nicolas Cage brand loyalty. 
  • Similar Product Remarketing (aka Conquesting) – Retarget shoppers browsing similar products to yours. A great way to subvert your competitors by appearing on their Amazon product pages. Because how dare someone else sell an inferior product with Nicolas Cage’s face on it. Use this method to make competitors your latest conquest. Or as we like to call it, “cagequesting.”

Amazon In-Market Targeting

When you want to reach the middle of your sales funnel.

We previously discussed why in-market audiences are so effective. So we won’t repeat ourselves. But the gist is that in-market targeting is ideal for reaching those considering buying what you’re selling.

On Amazon this entails two areas:

 

  • Prospecting – Serve ads to shoppers who are researching similar products to yours on Amazon but have yet to make a purchase. In other words, they are “in-the-market” for what you’re selling.
  • Basket-Building – Serve ads to shoppers in the market for products that are often bought in tandem. (Basket-building is the concept of advertising similar products that are often purchased together, like guitars and books on how to play the guitar.)

Amazon Lifestyle Targeting

When you want to reach the bottom of your sales funnel.

Targeting lifestyle segments is ideal for advertising to broad interest groups and demographics. These audiences typically have a lower immediate RoAS but generate a higher LCV. Whether you go with this option depends on whether you’re looking for short-term profits or long-term gains, the latter of which is better suited for lifestyle targeting.

Conclusion: Amazon DSP Helps You Advertise Better

Do you want to create more demand for your products, acquire new customers, and consistently drive year-over-year growth?

No?

Then you should probably not use Amazon DSP.

But for everyone else, Amazon DSP just makes perfect sense.

Sure, there’s no such thing as easy money.

But Amazon DSP and all its fancy programmatic buying of ad inventory from third-party exchanges definitely make generating revenue a lot easier. It might not sound like it at first, but take the time to wade your way through all that marketing-babble, and you’ll be pleased with the results. Trust us.

No worries if you don’t know where to start. If you want some guidance with your Amazon DSPing, we’ll be more than happy to help get your ASINs in a row.