How Amazon DSP Works: A Detailed Guide

Last updated on August 9th, 2023

Written by Himanshi Raj

Your Amazon business is running smoothly, and you're ready to take that jump. You want to delve deeper into the large-scale, programmatic type of advertising through Amazon called Amazon Demand Side Platform (DSP) and learn how Amazon DSP works.

We’ve got you covered! Let’s learn the basics of this Amazon advertising type and discover how to maximize its use and potential.

Which Business Types Use DSP?

Amazon DSP is intended for existing sellers with a successful online track record and are now scaling up. However, this feature is not limited to established brands; it’s accessible to Amazon sellers and brands of all sizes and on other platforms looking for new growth opportunities. 

Businesses interested in DSP typically have the budget to scale their businesses by ramping up their brand awareness and reaching wider audiences on and off Amazon. Amazon DSP allows them to go beyond the Amazon platform.

Types of Ads for Amazon DSP

Amazon DSP advertising supports several different options for media advertisements. You can build campaigns using display, video, audio ads, or a combination to promote your brand/products. 

DSP campaigns are typically launched to raise brand awareness or drive traffic on a cost-per-impression (CPM) basis. You can also use Amazon DSP to run video campaigns on a cost-per-view (CPV) basis.

While brands often upload their own media, Amazon also provides creative resources for advertisers. Using these resources, you'll have access to display image ad tools and a free video creative builder with varying styles. 

Sellers can use these features to help align their advertisements with their brand style and image. 

Available Amazon DSP Options

Advertisers have the option of two types of DSP: self-service and managed service. 

In self-service DSP, advertisers manage the campaigns themselves manually. Self-service DSP advertisers run their own advertising, so management fees are waived. However, it’s crucial to note that ad format and placement still take up most of the ad spend. 

On the other hand, managed-service DSP is a service for brands looking to hire agency-level management to handle their accounts. Managed-service Amazon DSP comes with a costly fee of  $50,000 (may vary per country). Established brands typically use this service as part of their marketing strategy. 

How Amazon DSP Works

Amazon's marketplace alone opens up millions of visitors daily. With the variety of online products, sites, apps, and brands Amazon has partnered with for DSP advertising, there are many growth opportunities and possibilities with Amazon DSP, increasing advertisers’ reach and skyrocketing their brands’ potential. 

Here’s how the DSP system works: 

• Audience Targeting - Consider demographics and behavior to capture them and strategically plan your campaigns throughout the buyer's journey. 
• Bidding - To use Amazon DSP, advertisers compete against each other in real-time ad inventory auctions.
• Campaign Monitoring - Monitor your campaigns easily using a neat dashboard displaying metrics.
• Campaign Analysis - Measure your ad and campaign performance using key metrics.

Let’s specify each step further.

How to Use Amazon DSP

The Amazon DSP program process is quite simple. You can create a powerful ad campaign with simple steps to reach millions of potential customers. To get started with Amazon DSP:

1. Create a DSP account, input basic information about your business, and wait for Amazon’s approval. 
2. Start creating your ads using the Amazon Ad Builder tool or upload your HTML code. Pick an objective, targeting option, and ad format.
3. Select the keywords you want to use. Target broad keywords or long-tail keywords. 
4. Set a bid and budget strategy for your campaign.  
5. Add some ad creatives (images or videos) to your campaign.
6. Launch your campaign.
7. Once your campaign is running, track its performance and make necessary adjustments.

How to Create an Impressive Amazon DSP Program

As an Amazon DSP partner, you have access to a powerful tool to help you reach your advertising goals. Ensure to make the most of the Amazon DSP program and bring your business to heights you never thought possible! Here are some pointers to get you started:

Look Closely At Your Data.

Review your campaign performance data and identify areas where you can improve. By understanding the data about your campaign’s performance, you can make more informed decisions about optimizing your campaigns in the future. Consider these questions:

• Are there times of day or days of the week more successful than others? 
• Are there certain targeting criteria that work better than others?

Use Innovative and Creative Materials.

Remember that you only have a few seconds to grab a customer's attention, so ensure your ads are well-designed and relevant to what you're selling. From desktop display ads to video ads, you will surely get a spark of inspiration from the vast selection of ad types available for DSP.

Improve Customer Targeting.

Use data to create targeted ad campaigns that reach customers with the right message. For example, Amazon DSP helps reach Amazon shoppers interested in your products or services whether they are browsing on the Amazon page or not. 

You can target customers based on their demographic information, such as age, gender, location, and interests.

Use Negative Keywords.

Your campaigns should include negative keywords to prevent unrelated searches from displaying your advertising. Using negative keywords will help you avoid wasting money on clicks that don't convert and improve ROAS.

Experiment with Different Ad Formats and Strategies.

Testing what works for you can help you find the DSP ad format and strategy that guarantee desirable results. Amazon DSP offers a variety of advertisements, each of which has its strengths and weaknesses. Try different ad formats and tactics to uncover the winning combination for your advertising campaigns.

Ensure You're Bidding Appropriately.

Review your DSP ad campaigns and ensure you get the most bang for your buck. Ensure you're bidding enough to meet your goals but not so much that you're wasting money on clicks that don’t convert. Don't just set a flat rate for all your ads and adjust your bids based on how likely each customer is to convert. 

Monitor Your Metrics and Make Necessary Marketing Adjustments.

Your Amazon DSP reporting dashboard provides valuable data to help you understand how your Amazon DSP ads perform. Ensure you have access to all the data and information you need to make informed decisions about your campaigns and continue improving the results. Keep tabs on your campaign performance and adjust accordingly.

Mix and Match Multiple Amazon Advertising Strategies and Solutions.

Instead of using one over another, many brands have incorporated combinations of DSP and other Amazon advertising services into their marketing campaigns. Here are some actionable tips to consider:

Final Thoughts

The world of advertising is dynamic. What performs well now may not always be a viable strategy later. For this reason, you are responsible for monitoring trends, keeping your brand relevant, maintaining and surpassing your target sales, and exceeding your competitors. 

Although it can get complicated, Amazon DSP offers solutions to help build campaigns that will better give your brand the exposure it deserves by allowing users to advertise on other Amazon sites.

And with Seller Interactive, we can help you achieve the marketing results you set for your brand. By employing industry-standard Amazon KPIs and in-house metrics for advertising performance, you can rest assured that your brand is in good hands.

Work with us for your Amazon DSP campaign, and you'll attain peace of mind knowing that a team of dedicated, expert advertising professionals will manage your campaign confidently down to the smallest detail. 

Let's get in touch. Book a call with us today!