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Amazon DSP Program: What Is It & How Does It Work?

The Amazon Demand-Side Platform (DSP) allows advertisers and businesses to buy programmatic ads that reach audiences on and off Amazon.

Hence, these ads are visible to Amazon customers, users of other Amazon platforms like Twitch and Fire TV, and Amazon third-party affiliate or partner sites.

Furthermore, the DSP program offers access to Amazon’s extensive customer data and incredible targeting options. Therefore, businesses can reach the right people.

Below, I’ll discuss how Amazon DSP works in detail, how much it costs, and who it’s for.

Key Takeaways

  • Amazon DSP enables businesses to reach audiences on and off Amazon.
  • Amazon DSP offers advanced ad targeting options for in-market, contextual, and look-alike audiences.
  • You can measure the performance of your DSP adverts with the standard reporting feature and Amazon Marketing Cloud (AMC).

How Does Amazon DSP Work?

Amazon DSP offers ad placements on Amazon websites and third-party publishers registered within the Amazon network.

This process uses programmatic advertising, leveraging software that adjusts your bids automatically based on ad spots and competition. Overall, Amazon DSP subscribes to a vCPM model (cost per thousand viewable impressions), which differs from the pay-per-click (PPC) model.

How Do You Get Started With Amazon DSP?

There are two ways you can get in on Amazon DSP:

  • Self-Service: You create your ads, choose preferable ad spots, and create your campaign workflows.
  • Managed Service: The Amazon team helps you manage your programmatic ads campaign, gives you full access to the Amazon DSP inventory, and consults with you to achieve your business goals faster.

In the following headings, I discuss the cost implications of the self-service and managed service options.

How Much Does Amazon DSP Cost?

Advertisers are charged based on a cost-per-thousand viewable impressions (vCPM) model. 

In simpler terms, you pay for every 1,000 people viewing your ads.

The actual costs are dynamically determined by where the ads are placed and the kind of ads you’re serving. For instance, your ads may be placed above or below the fold. 

Likewise, it makes sense that video ads would cost more to serve than status image ads.

In context, ads placed above the fold on an entity (like an Amazon affiliate blog) cost more than those placed below the fold since they’ll be seen more.

Note:

Amazon DSP offers a managed service option. Advertisers must spend at least $50,000 monthly on DSP adverts to qualify. This minimum varies per country.

Where Do Amazon DSP Ads Show?

DSP adverts show on all Amazon-owned websites and approved third-party publishers. Some of these display locations are tabled below.

Ad Spots Examples
Amazon.com
  • Search results page
  • Product details page
Amazon-owned websites
  • Twitch
  • IMDb
  • Goodreads
Amazon devices
  • Amazon Fire TV Stick
  • Fire Tablet
  • Kindle
The rest of the internet
  • Web pages
  • Blogs

Who Should Use Amazon DSP?

Amazon DSP is a great way to reach audiences that might be unavailable on other platforms. Likewise, Amazon knows how to target audiences ready and willing to buy.

However, not all businesses need DSP. In that light, here are the online sellers that should choose Amazon DSP as part of their business marketing:

Medium to Large Businesses

DSP isn’t for you if you’re a small business still testing product ideas and building your initial audience. I recommend the program for companies that have launched successful products, have a loyal customer base, and spend a large enough ad budget to see significant results with DSP.

Agencies

Agencies often have lots of in-house data experts familiar with the DSP landscape. 

They’ve run tons of ads already and know what works. Also, they typically have enough funds to bid effectively on DSP adverts.

Hence, they can leverage their programmatic ad experience, combined with Amazon’s unique audiences, to get better results for their clients.

What Types of Ads Can You Get on Amazon DSP?

Amazon DSP is flexible enough to allow brands to enjoy dynamic ad formats. 

Here are some options Amazon DSP offers to advertisers and businesses that choose the solution.

Display Ads

These traditional, image-like ads appear on Amazon’s sites and other publishers. 

Ad listing elements can be pulled from your product pages or custom-created for your audience.

Over-The-Top Video Ads

OTT video ads are non-skippable visual content displayed before, during, and after streaming content on sites like Twitch. They are mainly aimed at brand awareness since users are less likely to click on them.

Online Video Ads

These video ads are clickable and appear on websites across several devices. 

Customers can click on the top-right side of the screen to close the ad or click it to view the product in more detail.

Unlike the OTT ads, these video ads are closer to the bottom of the funnel and are best deployed to convert clicks into sales.

How to Create an Amazon DSP Account?

Your DSP account has to be approved by Amazon before you can start using the service. Here’s how to create a new Amazon DSP account and request approval:

  1. Go to Amazon’s advertising page and click “Register” or “Get started.”
  1. Select “Create manager account.”
  1. Create a new account name, then select “Advertiser” or “Agency.”
  1. Next, click “Create manager account.”
  1. Click “Request permission” to get a new DSP account approved.
  1. Fill in the advertising country and time zone.
  1. Next, fill in your billing details, including your address and phone number. Ensure you enter an email address you can easily access.
  1. Then, fill in your estimated monthly ad spend, company size, and industry.
  1. Finally, click “Accept and request.”
You’ll have to wait a few days to hear back from the Amazon team.

Amazon DSP vs. Amazon Sponsored Ads: What’s the Difference?

While Sponsored Display Ads and Amazon DSP ads share some similarities, both are different platforms. Here are the main differences between Amazon DSP and Sponsored Display Advertising.

Amazon DSP Sponsored Ads
Amazon DSP involves programmatically buying ads. Sponsored ads involve creating ads based on buyer signals on Amazon.
It is based on a vCPM model. Sponsored ads use both CPC and vCPM models.
DSP ads offer audience-based targeting options such as in-market, lookalike, cross-selling, and contextual targeting. Sponsored Display has two major targeting types – product targeting and audience targeting.
DSP ads are very targeted and, therefore, relevant to shoppers. Sponsored display ads may be shown to customers who have already purchased your product; thereby wasting some ad spend.
Managed-Service DSP requires a budget of at least $50,000 to get started. Sponsored Display has a minimum required budget of $1.
Amazon DSP has both self-service and managed-service options. Sponsored Display is a fully self-serviced solution.
Amazon DSP allows you to use automatically generated ads or create custom ad creatives from scratch. Sponsored ads are automatically generated with the option to edit the logo, headline, and image.
Video ads are available to all Amazon DSP advertisers. Video ad creatives aren't available to Sponsored Display advertisers who don't have products on Amazon.

3 Benefits of Using Amazon DSP to Reach New Customers

Aside from Google, Amazon DSP is the largest supplier of ad placements to businesses, and for good reasons. Here are the significant benefits of using DSP to grow your audiences:

Targeting Options

Amazon DSP offers advertisers a plethora of targeting features. This allows you to reach a specifically defined audience to market your products and ensure better conversions.

Targeting options you can set for your Amazon DSP advertising include:

In-Market

This audience is in the market for your product. These people recently searched for your or competitors’ products on Amazon but haven’t purchased them yet.

Cross-Selling

People in this audience have already purchased a product from you but haven’t purchased complementary products. Therefore, you create DSP promotions to target customers and cross-sell complementary products.

Lookalike Audiences

They’re people who haven’t purchased from you but share several similarities with those who have purchased from you. This type of targeting allows you to reach new audiences likely to buy from you.

Other targeting options include contextual, demographic, behavioral, and lifestyle.

In-Depth Customer Analytics and Insights

Amazon provides a wealth of data on customers and purchase behaviors. 

Advertisers tap into the DSP database to reach the right people at the right time. You can also measure your ad performances and receive insights on ad KPIs.

Brand Awareness

OTT video ads serve the primary purpose of brand awareness. They reach audiences off Amazon to show them your brand and products.

With carefully crafted ad creatives, you can deploy memorable ads that attract new customers to your brand.

What Are the Pros and Cons of Amazon DSP?

Amazon DSP provides many proven benefits to businesses looking to reach new audiences. 

Here are the pros and cons of Amazon Demand Side Platform.

Pros

  • Amazon DSP offers several targeting options, such as in-market, lookalike audiences, remarketing, and lifestyle.
  • Advertisers can access Amazon’s vast customer data collection to reach the right people at the right places.
  • Advertisers can take control of the whole process by creating their Amazon DSP campaigns and choosing where their ads appear.
  • Amazon provides creative tools and ad templates to advertisers.

Cons

  • DSP is costlier than Amazon PPC.
  • It has hidden agency fees.

Is Amazon DSP Available for All Amazon Marketplaces?

Amazon DSP is available for most Amazon marketplaces. Here are the ones that support DSP advertising:

  • North America: Canada, Mexico, United States
  • South America: Brazil
  • Europe: Germany, Spain, Italy, France, Netherlands, Poland, Sweden, Turkey, United Kingdom
  • Middle East: Saudi Arabia, United Arab Emirates
  • Asia Pacific: Australia, India, Japan, Singapore

Advertisers can’t use Amazon DSP in the Amazon Poland and Singapore marketplaces.

How to Track the Performance of Your Amazon DSP Ads?

Amazon provides standard and custom-defined ad insights and metrics into your DSP performance. That way, you can identify your return on ad spend (ROAS) and optimize your strategy for success.

Here are the major ways you measure the performance of your DSP adverts.

Standard Campaign Reporting

Every Amazon DSP campaign you create comes with in-built reports with insights on page view counts, click-through rates, and new-to-brand metrics.

Amazon Marketing Cloud (AMC)

AMC provides an even more robust insight into how your ads reach and convert customers. 

It allows you to track specific events like views, impressions, and clicks attributed to each ad deployed in your DSP campaign.

One of the major benefits of AMC over the standard reporting in Amazon DSP is that it allows for cross-channel reports, and you can use the tool to build more custom audiences than the basic DSP suite allows.

The best part is that it comes free with your Amazon DSP account as long as you’re eligible to use it.

Can You Improve Amazon DSP Performance With Third-Party Tools?

Amazon has already equipped the DSP platform with lots of audience-targeting features. However, there are third-party tools that offer extended audience-building and tracking features.

Here are the best of the bunch.

Quartile

Quartile is an ad management tool that provides advanced DSP audience-building features, extra targeting options, and custom dashboard campaign reporting.

Quartile uses AI and machine learning technology to study the performance of your DSP ads and automatically adjusts them to improve RoAS.

Furthermore, you can work with Quartile’s ad experts team, who’ll set up your DSP ads and build custom audiences.

You can see all these in action by booking a demo with the Quartile team via the link below.

BidX

BidX stands out because it provides a fully managed service where the ad team sets up all your DSP adverts and optimizes them for success. But why not just choose Amazon’s managed service option, anyway?

Amazon’s option requires a monthly spend of $50,000 (which may vary by country), while BidX recommends a minimum of EUR 5,000. Hence, more sellers can grab the fully managed option from BidX to start winning with Amazon DSP ads now.

Furthermore, the team at BidX charges very affordable management fees, takes control of the whole process of creating and optimizing DSP ads, provides you with complete visualization of performance dashboards, and commits to regular meetings about ads progress.

3 Tips to Get the Best Results With Amazon DSP

Here are three tips on how to get the best results on Amazon DSP.

Start With Bottom-Of-Funnel (BOFU) Conversions

You should start creating DSP ads for the BOFU marketing campaigns to get the best results. Here, you’ll market directly to people who have purchased from you before or are very similar to your current customers. This way, you’ll get the highest return on ad spend.

Then, depending on your overall strategy, you can start minimally or rapidly expanding to lookalike customers and new audiences.

Spend Enough Money on Ads

You must put away enough money for monthly spending on Amazon DSP promotions. 

If you want the managed-service option, Amazon will require you to have an ad spending budget of $50,000.

Thankfully, you can get away with spending less by trying services like Quartile or BidX, which only charge you a percentage of your ad spend.

Track Your Metrics

It’s best to track the data you get from your Amazon DSP dashboard to identify how your campaigns are faring. Even when you’re doing well, remember that

  • You can always do better, and
  • You should note the success formula to replicate it in other campaigns.

And if your campaign has yet to kick off, ensure you have given it enough time. 

Remember, throwing a reasonable budget at your campaigns and consistently tweaking it based on the data you get in your dashboard is essential.

Recommended Readings

FAQs

The main difference between Amazon DSP and SSP is the service each provides. 

Amazon DSP allows businesses to bid programmatically for ad spots for their products. 

On the other hand, SSP (supply side platform) provides the ad spots that advertisers bid for.

Yes, a non-Amazon seller can use Amazon DSP to market their products. 

You must create an Amazon DSP account, get it approved, and start creating your ads.

Yes, you can create your own Amazon DSP adverts with the provided templates or from scratch. However, custom-creating your ads is more intensive than letting Amazon generate the ads from your product details page.

Reach New Audiences With Amazon DSP

Amazon DSP enables businesses to market their products effectively on and off Amazon. The platform also allows advertisers to tap into the vast Amazon digital advertising inventory to build audiences for their products.

Remember that if the Amazon DSP managed service requirement is too high for you, reliable alternatives like Quartile and BidX require a fraction of the price to help you get set up. 

In fact, they’ll provide custom reporting and one-on-one support that you may never get from Amazon.

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Adam Wood
Adam Wood
Adam Wood is a seasoned E-commerce Strategist and SaaS Analyst, acclaimed for empowering Amazon sellers with actionable strategies and advanced analytics insight. His expertise in leveraging technology for market success makes him a pivotal resource for both budding entrepreneurs and established online merchants. Adam's approach combines rigorous data analysis with a deep understanding of the nuances of e-commerce, positioning him as a leading authority in the Amazon FBA sphere.
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