What is Amazon’s Demand Side Platform (DSP)?

A demand side platform, or DSP, is a unified network where users can purchase ad placements that can be served all over the internet.

Amazon’s DSP is actually one of many. Google, Lowes and Home Depot, for example, all have their own demand side platforms where they sell advertising space. What these DSPs all have in common is that they reduce friction for users by allowing them to automate their marketing through a single interface.

How does Amazon’s DSP work?

Like other demand side platforms, Amazon’s DSP serves programmatic ads that can be designed to target highly specific audiences. Investing in DSP advertising gives users access to Amazon’s entire advertising network, including spaces offered by their subsidiaries like IMDb, Kindle, and other third-party exchanges.

This advertising opportunity is called a DSP seat. Like a buy-in at a Las Vegas blackjack table, purchasing a seat gives your organization the right to bid on ad placements in spaces offered by that platform. Using a robust arsenal of targeting tools, Amazon’s DSP can serve your ads to audiences on or off their website based on factors like past engagement with your products, browsing history and related keyword searches.

How is Amazon’s DSP different from traditional Amazon Advertising?

While Amazon’s DSP does have some features in common with traditional Sponsored Display ads, it offers greater flexibility and more granular targeting. Both advertising strategies allow you to reach users who are browsing off of Amazon’s website, but DSP’s enhanced functionality means that it can go places and utilize data that sponsored display ads can’t.

What’s more, while traditional Amazon Advertising offers more limited targeting tools, DSP advertising helps you put your ads in the path of your precise end user. This can be the difference in serving your content to people who are searching for organic mattresses and serving it to environmentally-conscious heads of household in your region. Broadly targeting a highly-specific segment of consumer helps brands build recognition amongst the shoppers who are most likely to convert in the future.

Another useful feature of Amazon’s DSP is that it can be used to promote products or services that aren’t sold on Amazon – a huge benefit for deliverables that may not be a good fit for their shipping model.

What are the benefits of Amazon’s DSP?

Advertising on Amazon’s DSP is a valuable awareness play for brands that want to increase recognition amongst consumers. Because these ads can target your ideal consumer even when they aren’t actively browsing in your category, they are a good strategy for ensuring your products are top-of-mind for these shoppers when they are ready to make a purchase.

How much does Amazon’s DSP cost?

Compared to traditional Amazon Advertising, their DSP is expensive. Though minimums vary by country, you can expect a DSP seat on Amazon to cost a minimum of 50k per month. Businesses that purchase a DSP seat should also be prepared with a budget to bid against competitors for targeted keywords.

If this sounds cost-prohibitive, you also have the option to partner with a marketing firm that already owns a DSP seat. This arrangement allows you to effectively “sublease” the seat so that you can set your own budget for advertising.

Is Amazon’s DSP worth it?

DSP advertising is a powerful driver of brand awareness, but it does require a significant investment. Brands that aren’t prepared to allocate at least $3,000 per month towards ad placements will more than likely come away feeling that they’ve wasted their money.

The reason? Finding your true target audience and ideal marketing mix takes time, especially when you are new to the platform.

Think of your DSP advertising like mining for gold on a huge tract of land. Each excavation site will cost money, but the more you dig, the more likely you are to strike it rich. If you’re only prepared to invest in one or two mines, you will probably come up empty.

Fortunately, partnering with a research-based marketing firm has advantages that extend beyond access to affordable DSP advertising. An agency that collects and analyzes consumer insights will help you be strategic with your advertising investment so you see the best possible returns.