Insights

A Brief Introduction to Amazon’s Demand Side Platform

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In 2019, Amazon launched its DSP programmatic platform. Programmatic advertising is shrouded in acronyms — DSP, ACOS, CPM, and a half dozen or so more. Despite being difficult to understand, programmatic advertising is one of the most useful tools in a marketer’s toolbox.

 

So… What Exactly Is Amazon DSP?

DSP stands for demand-side platform: a system that automates advertising purchases according to real-time demand. In traditional media buying, a broker would sell ad placements in magazines and newspapers based on a target audience. DSP automates that process for digital ad placements.

Unlike other forms of digital advertising, programmatic ads are priced by the cost per thousand impressions (CPM). Countless impressions are available for purchase at any given moment, but not every impression will be suitable for a specific ad. A demand-side platform uses buyer personas and audience segments to automatically decide which impressions make the most sense for ad placement. All of this takes place in a real-time bidding system. Every time a webpage loads, DSPs submit bids for ad spots and the winning bid gets the impression.

 

What Amazon DSP Is Best At

A good advertising strategy plays on the strength of each tool. Keyword advertising and sponsored products are great for reaching low-funnel shoppers that are already on Amazon, but Amazon DSP is different. Its ability to use the marketplace’s data to target consumers off Amazon makes it perfect for reaching high-and-mid-funnel shoppers.

 

 

Amazon knows shoppers better than anyone. Gaining access to their data via DSP gives brands an unprecedented ability to target more customers like the ones they already have, and to test new messaging/creative on an even wider audience.

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Here are some of the best use cases for Amazon DSP:

Reach more customers like the ones you already have – whether consumers know about a brand or are totally in the dark, DSP excels at understanding who a brand’s current customers are, what makes them similar, and where more of them can be found online.

Maintain a competitive advantage – Amazon DSP allows brands to get in front of audiences that are considering a purchase. Getting a brand in front of the right audience with the right intent is key to winning over competitors.

Retarget “window shoppers” – timing is everything. Just because a customer didn’t reach a purchase decision today doesn’t mean a brand is down for the count. Amazon DSP helps brands reach consumers in just the right places and times to stay top of mind.