What distinguishes one DSP from the other

What is Amazon DSP and how is it different from Sponsored Ads?

With Amazon Sponsored Products (opens new window) or Amazon Sponsored Brands (opens new window), advertisers can target potential customers on the Amazon platform. But besides Amazon there are many other websites on the Internet that can be used to address potential customers. So that advertisers can reach these target groups outside of Amazon's own platform, Amazon sellers and vendors offer a solution called “Amazon DSP”.

Definition of terms and example

DSP is a term from online advertising and stands for “Demand Side Platform”. Behind this is technology or software that enables advertisers to place bids for advertising space on other websites. Thus, with the help of the Amazon DSP software, you can address Amazon customers who are also on other websites.

Here is a quick example:

  • As an Amazon seller or Amazon vendor, you have launched a campaign via Amazon DSP that is intended to address people who are interested in washing machines.
  • A person visits the website spiegel.de, on which advertisements from third parties such as Amazon are also displayed. The website owner offers the advertising space on his website for auction to various advertisers (including Amazon).
  • Amazon's DSP software recognizes that the visitor has recently shown increased interest in washing machines, but has not yet bought one. Amazon therefore bids in this auction according to your settings. This also applies to other advertisers.
  • If you were the highest bidder, you will win the ad impression.
  • Then, your ad about washing machines will be shown to the person on the website.
  • In the best case scenario, the person clicks on your ad and lands on the Amazon product detail page of the product being advertised.

However, Amazon DSP is not only available to sellers and vendors. Even companies that are not active as sellers or vendors on the Amazon marketplace can use Amazon DSP for themselves.

Differences between Amazon Advertising and Amazon DSP

The fact that it is possible for every DSP user to place advertising outside of Amazon is one of the biggest differences to "classic" Amazon advertising (Amazon Advertising). Compared to sponsored ads, DSP has a far greater reach. The following table shows further distinguishing features between Amazon Advertising and Amazon DSP.

Amazon AdvertisingAmazon DSP
BillingCPC (cost per click)CPM (cost per impression)
Minimum budgetNoneapprox. 10,000 EUR
accessSelf serviceManaged service or self-service
inventoryInside AmazonInside and outside of Amazon
TargetingKeyword and product based, limited target group basedTarget groups or retargeting

Amazon Advertising

  • Billing: CPC (cost per click)
  • Minimum budget: none
  • Access: self-service
  • Inventory: Inside Amazon
  • Targeting: Keyword and product based, limited target group based

Amazon DSP

  • Billing: CPM (cost per impression)
  • Minimum budget: a. 10,000 EUR
  • Access: managed service or self-service
  • Inventory: Inside and outside of Amazon
  • Targeting: target groups or retargeting

Billing

With classic advertising formats, you only pay when a user clicks on your ad (CPC - Cost Per Click). With Amazon DSP, on the other hand, you pay when the ad is played and thus displayed. One speaks therefore of "impression-based billing" (CPM - Cost Per Mille).

Minimum budget on Amazon DSP and access to the campaigns

If you use Amazon Advertising, you only have the option to access the measures via the self-service procedure. This means that you monitor and control, for example, your Amazon Sponsored Products (opens new window) or Amazon Sponsored Brands (opens new window) completely yourself and there are no administration fees. In comparison, Amazon DSP offers the option of choosing between the self-service or managed service process (opens new window). Within the self-service process, you also have full control over your campaign and there are no administration fees. However, if you want to use the managed service it usually requires a minimum budget of approx. 10,000 EUR. This is due to the fact that Amazon creates the advertisements for the advertiser itself (managed service) and a campaign manager is provided to you.

Amazon DSP inventory

In particular the so-called "Inventory" from Amazon DSP is different from other advertising options. The inventory refers to all advertising space that can be sold to an advertiser. This means that you not only have the option of displaying your ads on Amazon yourself, but also have access to other platforms that display advertising on your site. These third parties are called "Publisher" referred to, which via so-called "Exchanges" are connected to Amazon.

Thus, the Amazon DSP inventory gives you access to a much larger target group, as the majority of potential customers move outside of Amazon's own platform. As far as the advertisement itself is concerned, you can - as before - send the potential customers to a product detail page on Amazon or to a self-defined page, e.g. your own homepage.

Amazon DSP targeting and retargeting

Another difference is the selection of target groups. While Amazon Advertising only allows keyword, product and limited target group targeting, Amazon DSP also offers the option of Retargeting and creating your own target groups (Advertiser Audiences and Lookalike Audiences).

Retargeting

With retargeting you have the possibility to address the following users again:

Page visitors who have already been to your homepage, Amazon users who have interacted with your own products or your brand or with products from third-party providers (Remarketing Amazon users).

In order to be able to use retargeting, you have to use an Amazon tracking pixel on your homepage to mark the page visitors.

Advertiser Audiences and Lookalike Audiences

An advertiser audience is a company's own target group of customers. You can create this by uploading your own customer data. You can then use the Advertiser Audience to address your own users on the Amazon platform. In addition, Amazon compares this data with its own and tries to find matches. A so-called Lookalike audience form. They are also called statistical twins, as they are very similar in their buying behavior to the target group you uploaded. You can also create a lookalike audience by referring to the data of your tracking pixel built into the website.

Amazon target group targeting

Using characteristics such as demographic information (age, gender), information on the device or location, target groups on Amazon can be further narrowed down. In this way, you can try to reach new consumers who, based on their user behavior, are more likely to purchase a particular product.

The following target group targeting options are possible:

  • In-market: Customers who are interested in specific products and with whom a deal is likely
  • Lifestyle: Customers to whom certain segments can be assigned based on their consumer behavior
  • Context: Customers who are active in certain subject areas
  • Demography: Customers with a specific age or gender
  • Location: Customers from a specific region
  • Daytime: Campaigns are played out at a specific time
  • Technology: Customers who use certain devices, browsers, operating systems or screen sizes

Overall, the targeting options are quite diverse, so you should pay close attention to which settings you make. Due to the large inventory, there is a risk of "burning" a lot of money quickly if the wrong or too rough settings are made. Accordingly, you should deal intensively in advance with which targeting options are best for your target group and to what extent. If you are unsure at the beginning, we recommend that you first carry out smaller tests with a manageable budget, observe the results and then scale the most promising option.

Advertising material from Amazon DSP

Amazon DSP offers advertisers various forms of advertising with different design options so that customers can be addressed in a variety of ways. The different options are presented below.

Amazon DSP - Standard Display Ads

The first option for advertisers is to create standard display ads in various sizes. These can in turn consist of a static image or a Flash animation. The formats can be selected depending on the campaign goal.

Amazon DSP - Dynamic eCommerce Ads (DEAs)

Dynamic eCommerce Ads (DEAs) are a special form of standard display ads. They are used to promote individual products that are sold on Amazon. After clicking on the ad, the customer is redirected to the respective product detail page. Amazon automatically optimizes your display format in real time. In general, DEAs consist of two components: a static image and an e-commerce element (e.g. a for offer button). DSP generates various display variants from the product image.

Amazon DSP - Video Ads

With Video Ads, Amazon's Demand Side Platform gives advertisers a powerful advertising tool. Hardly any other medium can convey advertising and brand messages as effectively as a video clip.

DSP delivers the video ads in different forms:

  1. In-Stream Video Ads: They are integrated into existing video content and appear, for example, before the actual video content.
  2. Out-Stream Video Ads: They stand for themselves and appear outside of video content.
  3. In-App Interstitial Video Ads: They are a special form of out-stream video ads that appear in apps and hide the actual content. Users therefore quickly find them annoying. So far, however, they can only be switched in the USA.

Amazon DSP reporting API

To give advertisers a better overview of your campaign, the Amazon DSP report API has been available in a beta version since May 2020. Advertisers, agencies and tool providers can now use the Amazon Advertising API to get reports for all of their Amazon DSP campaigns. You can filter results by advertiser ID and choose from over 400 available metrics.

This API functionality saves hours of manual retrieval of reports. It also makes it easier for you to get reports in the tools you use to manage other marketing channels. This functionality is available to those who have self-service access to Amazon DSP. If you are interested in this API, you can inquire on the Amazons Advertising API website (opens new window).

Conclusion

Amazon DSP can generate attention for your own brand and products. In addition, consumers can be reached who have already dealt with the products and are interested in you, but have not yet become buyers. In addition, DSP not only provides granular targeting options, but also a huge inventory to increase reach. Nevertheless, you should have informed yourself in detail about the demand side platform from Amazon and know its possibilities before investing a lot of money in it.