Amazon Demand-Side platform – what marketers need to know

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Amazon DSP is a demand-side platform that allows advertisers to automatically buy display and video ads. It was previously called Amazon Advertising Platform (AAP) until the eCommerce giant relaunched its advertising services in September 2018. For the most part, Amazon DSP functions in the same way that AAP did, but there are a number of recent developments advertisers should pay attention to.

As Amazon works to position itself as a true contender to Google’s dominance in online advertising, its demand-side platform is emerging as a key component of its strategy. Here’s what advertisers need to know about the newly-revamped Amazon DSP and what it could mean for the future of paid advertising on Amazon.

What is a demand-side platform?

Amazon describes its own DSP as a “demand-side platform that enables advertisers to programmatically buy display and video ads.” The key phrase in that definition is “programmatically”  which describes the core function of a DSP.

A demand-side platform is a piece of software that automates the process of buying ads at scale. The most advanced DSPs use data insights to select ads and placements based on user behaviours and the targeting settings defined by the advertiser. This is precisely how Amazon DSP operates.

The aim is to make ad purchasing cheaper, more efficient and more effective by removing the manual workload, as well as the need to negotiate ad rates. The end goal for advertisers is to buy the most effective ads and placements, at scale, across a range of publisher sites. It’s the DPS’s role to choose which impressions are most valuable to the advertiser and automatically deliver ads in the most effective places, based on user data and available budget.

DoubleClick was Google’s equivalent to this before it merged the platform with Google Analytics 360. Facebook Ads Manager is essentially a DSP that (uncharacteristically) only sells ads on its own inventory, as well as Instagram.

What do I need to know about Amazon demand-side platform?

Amazon’s demand-side platform has become a central part of its efforts to rival Google’s dominance in online advertising. The most important thing to understand about Amazon’s DSP is that it’s the only platform of its kind that can use Amazon’s customer data to target ads.

It’s also worth noting Amazon’s recent acquisition of Sizmek’s ad serving and dynamic content optimisation businesses, which incorporates even more data into Amazon’s vault of consumer insights.

That’s the real pull of Amazon DSP, which allows you to take advantage of Amazon’s growing knowledge of consumer behaviours, including purchase history, brand affinity and search history – data amassed from 2.65 billion monthly visits (May 2019, Statista).

That gives you an idea of the opportunities the Amazon DSP opens up, but there’s more you need to know about the platform before getting started.

Do you need to be an Amazon seller to advertise on Amazon DSP?

The first assumption many advertisers make about Amazon DSP is that you need to be an Amazon seller to use the platform. This is not the case. Any advertisers can make use of the platform (assuming you don’t violate Amazon’s advertising policies), whether you sell products on Amazon or not.

Naturally, this means retailers who aren’t selling via Amazon can use its demand-side platform to programmatically buy display and video ads. However, brands outside of the retail space can also use the platform to deliver ads using Amazon’s deep consumer insights. For example, insurance companies can use Amazon DSP to target users demonstrating an interest in expensive consumer electronics items, targeting them with ads for home insurance to protect their precious TV and other devices.

Where do Amazon DSP ads drive traffic to?

Another easy assumption about Amazon DSP is that it will drive traffic to Amazon product listings, but this isn’t the case either. Display and video ads delivered via Amazon DSP drive traffic to your website, which means you get every opportunity to turn those visitors into customers or valuable leads via email signups and other on-site lead-gen strategies.

What ads can I buy via Amazon DSP?

Amazon DSP is all about programmatically buying display and video ads; these are the only two formats you can buy through the platform. As you’d probably expect, these ads can show across platforms, including the website and mobile app, as well as Amazon-owned entities like IMDb and Audible.

Amazon video ads showing on the desktop site and mobile app.

That’s the official word from Amazon but reports from Digiday suggest Amazon is also working with major media publishers to incorporate its DSP ads through its Fire TV device. Apparently, Amazon has already tested this with multiple TV networks, which would allow them to sell advertising space to advertisers who could make use of all that Amazon data to deliver ads to individual users.

If this is accurate, it will be a huge breakthrough in delivering targeted video ads to consumers. Stay tuned.

How long does it take to see results?

Advertising through Amazon DSP is based on a CPM model, which means you’ll be paying for impressions rather than clicks. Due to the programmatic nature of this platform, it can take time for campaigns to generate enough impressions for the data being used to become “smart” enough to target the right audience.

So don’t be alarmed if performance metrics aren’t all that inspiring to begin with; you should see a spike in performance within three to six weeks.

On the plus side, this programmatic approach also means that, once performance has settled, it should continue to further improve steadily over time.

How much does it cost?

In terms of average CPMs, you should be looking at an average of £3-£5, although large catalogues (thousands of products) will need bigger budgets.

As far as budget goes, you’re going to want to have a minimum of £4,000/month available for Amazon DSP to get things moving. That said, we recommend budgets starting at £8,000/month to really make the most of this platform, which is pretty much on par with other demand-side platforms.

Who should use Amazon DSP?

If you think having exclusive access to Amazon’s wealth of consumer data is going to help your business, then Amazon DSP is a platform worth testing. Likewise, if you’re looking for a programmatic solution to deliver ads at scale, Amazon simply has more consumer data to feed its algorithms. Google may have more users and data overall but Amazon wins when it comes to consumer-centric data.

We should mention the caveat that Amazon DSP isn’t the finished product yet and there will be plenty of more innovation coming to this platform in the years ahead. As things stand, it looks like Amazon is going to make this the (or, at least, one of the) focal points of its advertising strategy; talk of bringing TV networks into the equation is certainly exciting.

When you look at Amazon’s current spread of media presence across Fire TV, Prime Video, Freedive (IMDb streaming) and everything else, its programmatic display and video ads service shows a lot of promise.

Need help with your advertising?

We have a large team of PPC specialists who can help with your advertising on Amazon! Call us on 023 9283 0281 or submit your details here.

Ashleigh Brown profile picture
Ashleigh Brown

Ashleigh is a PPC specialist at Vertical Leap. Managing PPC projects from strategy through to implementation and management, using multiple platforms.

More articles by Ashleigh
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