Your Complete Guide to the Amazon DSP (2021 Update)
By Alec Tulett on March 5th, 2021
Amazon is increasingly capturing more brand-awareness budgets from advertisers — and for good reason. With more ways to move people up the advertising funnel with the Amazon Demand Side Platform (DSP), advertisers can execute full-funnel strategies that help to amplify their brand and reach new audiences.
For those that sell on Amazon, the Amazon DSP can be an incredible way to:
- Create awareness of your product/brand to an entirely new audience of customers
- Retarget people that have visited your product page but have not purchased
- Generate repeat purchases for those that have purchased your product in the past but not made a repeat purchase
- Drive incremental total sales growth
In this article, we'll outline everything you need to know about getting started with the Amazon DSP and how to leverage its full capabilities to grow your brand:
1. What is the Amazon DSP
2. Amazon DSP Ad Types
3. Campaign Structure
4. Full-Funnel Advertising with Perpetua
What is the Amazon DSP?
The Amazon DSP enables advertisers to programmatically buy display, video and audio ads both on and off Amazon. You can leverage Amazon's extensive first party user database to reach highly targeted audience groups with enhanced creative, wherever users are shopping online.
Advertising through Amazon DSP differs fundamentally from Sponsored Ads where you bid on keywords or individual ASINs. Through the Amazon DSP you bid on specific groups of Amazon users, compiled based on their online shopping behaviour.
Because of this, the Amazon DSP ad inventory is inclusive of, not restricted to, the search engine results page and product detail pages - and additionally unlocks valuable off-amazon real-estate like Amazon-owned sites and apps, such as IMDb, and leading publishers' sites.
These unique distinctions from Amazon search offer a platform with full funnel advertising capabilities, allowing brands to level up their Amazon strategy by focusing on brand awareness, competitor conquesting, OLV, and more.
Customers like Ready, Set, Food saw 4-5x more efficient ROAS compared to Sponsored Products and Sponsored Brands.
Not only were we able to drive a strong ROAS, but our customers are now leveraging all available ad inventory to sell their products and most importantly build a brand on Amazon.
Amazon DSP Ad Types and Inventory
Amazon DSP has four main ad types available to you and your brand to optimize based on your objectives.
1. Static Ads
Static ads require specific pre-determined creative and calls to action. These ads can link back to storefronts, product detail pages, or custom landing pages.
2. Dynamic Ads
Unlike static ads, dynamic e-commerce ads automate the creative displayed on the ad based on your goals. This can include include images, calls to action, reviews, and more. However, these ads can only link to a product detail page.
3. Video Ads
Video has proven to be the most compelling and engaging way to tell your brand story. 50% of internet users look for videos related to a product or service before visiting a store.
Amazon DSP video ads run in two placements:
- In-stream, within video content
- Out-stream, as a part of a display ad
These ads can link back to product detail pages or to your own site.
4. OTT Video Ads
OTT video ads are high quality, high impact video ads that appear across Amazon's publishing ecosystem including PrimeVideo, FireTV, IMDB, Twitch and more.
These ads are often non-skippable and are not clickable.
*Pro Tip: Invest in quality creative. Perpetua's Creative Studios works with brands to create high quality, commercial video with industry-class production teams with packages starting at $5000 USD.
Like all advertising campaigns, Amazon DSP campaigns are an amalgamation of strategies used to promote one or more products. Before diving deeper into the different strategies available to your brand via Amazon DSP advertising, it's crucial to understand the base structure of campaigns and how these different components fit together.
Plans are the first step when building a new Amazon DSP campaign. In Perpetua, this is where you set the parameters of your campaign, and map out an objective for a portion (or all) of the campaign. Think of them as the umbrella with which you create your goals under.
Critical fields set at the Plan level:
Flight: When will your campaign start and end.
Budget: How much money would you like to spend every day, each month, and for the life of the campaign?
KPI of Optimization: The Amazon DSP has an internal tool that can be configured to optimize for one of several KPIs, i.e. ROAS, CTR, VCR.
Target Markets (Audiences)
ASIN Builder Audiences
Amazon DSP's audience building tool allows you to create extremely customizable user groups by targeting consumers based on their engagement with specific products (ASINs) on Amazon.
With this audience creation tool, you can select
An ASIN or group of ASINs representing the products that your audience has engaged with (this can be your own ASINs or a competitors')
An action that these users have taken on that product, including
Viewed the product page
Purchased the product
Viewed the product on the search engine results page
The look back window where this action occurred that you want to target, i.e. viewed the product within the last 20 days
The ASIN Builder Audiences tool is very powerful as it allows you to directly target high intent purchasers. These segments, in some cases, even show returns higher than Sponsored Product Ads.
A few of the segments we recommend building using this tool are:
Retargeting: Retarget people who have viewed your products.
Lapsed Purchasers: Someone that has purchased your product in the past, and you'd like to move them towards a repeat purchase.
Competitor Conquesting: People who have viewed your competitors products.
Brand Expansion: People who have purchased a different product from a specific brand. People who have purchased complementary or similar products.
The real power of Amazon DSP targeting is in the ability to combine these custom audiences with AND, OR, and NOT logic. For example, you can target users who viewed your main competitor's product and viewed your product, but did not purchase either one. This combination of audiences is known as a Target Market, which collectively contributes to higher-level advertising objectives.
In Market/Lifestyle Audiences
The Amazon DSP has over 1000 pre-built in market and lifestyle audiences which give sellers and Brands another way to try to connect and reach a larger number of people interested in their category of products.
In-market and lifestyle audience segments are created based on Amazon shopper search data in the last 30 days. Some examples of these segments are:
Premium Women's Clothing
Healthy Lifestyle, Home Security, Pet Lovers.
Typically seen as top of funnel marketing, these in-market and lifestyle audiences are targeting people who are at the awareness or consideration stage in the funnel.
However, we have seen in certain instances these segments perform in line with the retargeting segments. The challenge here is predicting which In Market Audiences will work and which won't. This can be an impossible task at the outset, and we strongly recommend initially testing into many relevant segments as budget allows and expanding from there based on the results.
Since results can vary dramatically based on segments, it may appear risky to test many different segments. However, given that these are potential shoppers that are completely new to your brand and products the reward is most definitely worth the perceived risk.
As stated above, the key to effective advertising is reaching a specific audience with the correct messaging - highlighting the unique value proposition of your product/brand to the people who are seeing your ad. This stage of campaign creation is arguably more art than science, but we have developed best practices for creative strategy based on the objective of the campaign.
The Amazon DSP has a creative tool that enables easy asset creation by pulling image and product information from a products detail page. This creative will include star rating, reviews, price, prime check, any promotional offer and a CTA - all of which is dynamically updated.
Line items are the building blocks of DSP campaigns - this is where a target market is paired with the appropriate creative and delivery parameters are set:
Line items live within a specific order, which governs the total budget of all the line items associated, and the dynamics of budget allocation across these line items as a function of plan-level optimization.
At Perpetua, we have no line item minimums, meaning you can easily build and optimize granularly structured campaigns, separating individual products, targeting strategies, and even digital inventory into separate line items for maximum efficiency.
Full-Funnel Advertising with Perpetua
We like to think of the different levels of the Amazon DSP advertising funnel - and the targeting strategies within these levels - as being mapped to stages in a consumer's in-store shopping experience.
To drive new-to-brand customers and convert them to repeat purchasers, you need to be utilizing Amazon DSP's full-funnel advertising and brand building capabilities. From brand awareness, to consideration, to competitor conquesting - using a combination of DSP strategies and targeting is where we see the most effective return for advertisers. And when it comes to measuring success, each stage of the funnel has different metrics you should be focusing on.
20% of brand-based decision making occurs before a shopper even looks at products. With OTT, you can easily reach users before they begin their shopping journey and share your brand message to unique and relevant audiences at scale.
While OTT ads are not clickable, you can measure the impact of your brand awareness with downstream attribution via the Amazon Marketing Cloud (AMC). AMC provides greater visibility into the downstream effect of your awareness marketing by integrating your TV advertising with bottom-funnel digital and retail channels via OTT remarketing.
KPIs to focus on: VCR (video completion rate), Branded Searches, Downstream Conversions, Brand Lift (shopper perception of brand)
Top-of-Funnel: OLV and Display
Top-of-funnel ads can be particularly effective when aiming to grow your Amazon business and consumer pipeline. To reach users "in the aisle" - consumers who are broadly shopping in the same space or category as your products - we recommend honing in on appropriate In-Market segments via overlap reports, and demographic information via audience insights.
This allows you to reach new-to-brand customers who have not shopped for your product before, but that you can capture and lead to your brand store or product detail page.
KPIs to focus on: CPM (impressions), CPDPV (cost per detail page view), DPVR (detail page view rate), CTR (click through rate)
Middle funnel ads is where you can get very granular with competitor conquesting, contextual targeting and cross-selling strategies. We suggest leveraging Amazon’s custom audience-building tool to strategically target users who have recently engaged with competitor or complementary products. This is where you can really find creative ways to reach highly interested groups based on their shopping behaviour.
For example with Perpetua, if you're trying to capture market share from competitors, you can build individual competitor conquest segments for each competitor (because we have no line item minimums), and A/B test how your product performs against each competitor brand.
The purpose of these classic targeting strategies shouldn’t be to maximize your ROAS – instead, your goal here is to continue reaching consumers who are on the edge of making a purchase but have fallen off – ensuring that all of your sponsored product, brand, mid-upper funnel as well as omni-channel efforts don’t end with an abandoned cart.
At Perpetua, to produce incremental sales, we take every possible effort to ensure your retargeting and remarketing audiences are exclusive from users who are on track to make an organic purchase. This is also where you can promote repeated repurchase behaviour to maximize the average LTV of new-to-brand customers.
KPIs to focus on: ROAS (return on ad spend), CPP (cost per point), CTR (click through rate), DPV Clicks : Views (detail page view clicks : views)
What sets the Amazon DSP apart, is its unique and granular campaign structure and audience insights. You can leverage the Amazon DSP to easily execute strategies to build your brand, refine and optimize targeting with Audience Insights and create effective competitor conquesting strategies.
If you want to learn more or if we can help support your full funnel advertising strategy in any way, reach out to us at email@example.com and we would be happy to present you with our recommendations.
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