When it comes to advertising on Amazon, the abbreviation Amazon DSP has been on everyone’s lips for some time now. But what does the abbreviation mean? We’ll explain it to you!
What is Amazon DSP and what does it do?
According to AbbreviationFinder, Amazon DSP is programmatic advertising designed to reach specific target groups on and off Amazon to increase sales, brand awareness and traffic. On the one hand, the demand side platform helps to achieve goals of profitability and sales growth, but at the same time it also helps to increase brand value and brand awareness through greater reach.
DSP makes it possible to form target groups based on collected data about buyer groups and their purchasing behavior and to address them through display and video ads.
DSP audience targeting strategies can be diverse:
- Target groups by demographic characteristics
- Prospective buyers of relevant product categories
- Targeting and retargeting through relevant competitor products
- Targeting and retargeting through the previous reach of your own products in order to reach interested parties who have already had contact with your own products but have not yet made a purchase.
Where is DSP available?
Amazon DSP can currently be used in the following countries: Canada, Mexico, USA, Brazil, Germany, Spain, France, Italy, Netherlands, United Kingdom, Kingdom of Saudi Arabia, United Arab Emirates, Australia, India and Japan.
Amazon DSP can be used by sellers and vendors who sell their products on Amazon, but also by companies that are not active on Amazon.
How is Amazon DSP different from other forms of advertising on Amazon?
The biggest difference between Amazon DSP and Amazon Advertising Console ads is where the ads are displayed. With DSP, this is possible on both advertising spaces on and off Amazon, meaning the possible reach is much greater.
Billing also differs. While classic Amazon advertising only incurs costs when you click on the ad (CPC = cost-per-click), DSP retailers pay for the display of the ad (CPM = cost-per-mille). Due to these different billing models, other strategies must be considered when planning budgets and campaigns.
How can Amazon DSP be used?
Using Amazon DSP is not necessarily possible or sensible for every retailer. There are basically two ways to get access to the Amazon DSP:
- Managed service from Amazon: A minimum booking volume of around 10,000 euros is required for this. In this case, Amazon takes over the control and administration of the advertising campaigns.
- Self-service access: With self-service access, the company or agency itself takes care of the advertising campaigns. However, Amazon is very selective when granting access. Together with our partner BidX, we have access to the Amazon DSP and can therefore offer the service.
Conclusion: Reach your target group early with Amazon DSP
Advertising via Amazon DSP offers companies completely new possibilities. In particular, the option to display advertising on websites outside of the Amazon cosmos has many advantages. This way you can point out your product to your target group before they have even searched for it on Amazon – well at the beginning of the sales funnel.
The data behind DSP advertising is also a big advantage. While Google, Facebook & Co. can only make assumptions about users’ purchasing behavior, Amazon knows exactly who bought what and when or is interested in what. This means that DSP advertisements can be played out particularly precisely, wastage can be reduced and the profitability of the ads can be increased.
Amazon DSP experiences – our requirements
Amazon DSP is not a viable or worthwhile advertising option for every Amazon retailer. But DSP offers unimagined possibilities, especially for larger retailers. For our long-standing customer PinKey, we place advertising via both DSP and the Advertising Console – here are our experiences.
Goals that can be achieved with DSP:
- higher overall sales (both organic and advertising sales push)
- Increasing the brand’s market reach
- Strengthening brand awareness as an essential measure of brand building
- Increasing cart value and units purchased per order line
- Strengthen customer loyalty among regular buyers
- Acquiring new customers
- Expand competitive advantages over the competition and secure market shares
Our approach as an Amazon DSP agency
For good output, the first step should always be to define a DSP audience targeting strategy that fits the customer goal, the product and the market potential. In a practical context, for example, the focus can either be on purely profitable sales generation or the goal can be to expand reach and brand awareness.
However, these two exemplary focal points do not necessarily have to be in competition with each other: our aim is to be able to reconcile both goals and achieve the maximum output.
With this form of advertising, one must be aware that the success that can be achieved with DSP advertising depends on the general product performance, the financial budget options and the expected objectives of the customer. Practically speaking, this means that for some products, advertising on (ON) Amazon works best via display on competing sites, while other products reach the target when the campaigns are played outside (OFF) Amazon, with a focus on desktop Displays and geo targeting.
Regardless of the strategy chosen, DSP should always be approached in parallel with the entire SEO strategy in the seller account : In order for DSP campaigns to gain momentum and generate sales, the products must have an attractive listing and a stable conversion rate. This is the only way to improve rankings and sales through higher traffic and increased reach.
In principle, DSP campaigns are a major USP compared to the competition, as operating the DSP console is technically more demanding than regular PPC advertising.
DSP also offers a significantly broader range of advertising options with a larger output:
- Target groups can be defined and targeted in more detail
- Conquest and cross-promotion strategies can be built
- Custom lookback windows help evaluate reach, sales and profitability
- The campaign look can be split up depending on onsite and offsite presentation and visualized individually in the creative design
- Through day parting, the time, duration and frequency of the draws can be determined
Amazon DSP experiences: Our conclusion after more than 6 months
The biggest hurdle to using DSP is still raising a high minimum advertising budget: In general, the budget required for using DSP largely depends on the product category and the overall goals for the products or brand.
However, while Amazon requires a commitment of more than 10,000 euros for the use of DSP as a managed service, as an Amazon DSP agency we can tailor the budget to your customer benefits at the beginning. This means: Together with you, we will select a budget that you can use without any concerns – as soon as the first profitable results are achieved, we can then scale the performance and adjust the budget individually.