Amazon DSP Ads: Your Hidden Key to Modern E-Commerce Success

Struggling to scale your e-commerce business? Need more visibility? Amazon DSP Ads might be the key to unlocking your business’s hidden growth, whether you sell on Amazon or off it. Learn how to build an Amazon DSP Ads campaign that works for your business goals in this article.

Amazon DSP (Demand-Side Platform) is a programmatic advertising platform that allows brands and advertisers to buy and place various types of ads, including display, video, and audio automatically.

Amazon DSP ads can appear both on Amazon and outside of Amazon:

• On Amazon: Ads can be shown across Amazon’s website, mobile app, and devices like Fire TV and Kindle.
• Off Amazon: Ads also run on Amazon-owned sites such as IMDb and Twitch, and on a wide network of third-party websites and mobile apps through connected ad exchanges.

What are the Benefits of Using Amazon DSP Ads?

When you use Amazon DSP, you’re not just buying ad space; you’re leveraging a powerful platform designed to help you connect with customers and grow your business. Here are some of the key benefits:

In-Depth Audience Insights

Amazon DSP offers access to detailed analytics before, during, and after campaigns. You can review key metrics such as total sales, add-to-cart rates, and product units sold to track what’s working over time. These insights can also include behavioral data, like branded search activity or peak shopping periods in your product category. 

Extensive Reach and Cross-Device Targeting

A major advantage of Amazon DSP is its ability to reach your audience both on Amazon and across a wide network of third-party sites and apps. It can recognize and reach the same user across multiple devices, whether they’re browsing on a smartphone, tablet, desktop, or connected TV.

Advanced Audience Retargeting

With Amazon DSP Ads, you can even retarget users who’ve already shown interest in your brand, whether they viewed your product, visited your site, or made a past purchase. You can reach these audiences with personalized ads designed to re-engage their interest.

A Variety of Ad Formats

The platform supports a range of creative ad formats, giving you the flexibility to present your brand in different ways. You can use display ads, which are common on websites and apps, or leverage video and audio ads to create a more immersive brand experience.

How Does Amazon DSP Ads Work?

Amazon DSP operates on a programmatic basis, which means it uses a system to automatically buy and place ads in real time. Instead of you manually booking ad space, the platform uses its powerful technology to find the best opportunities to show your ads to the right people.

What makes Amazon DSP unique is its access to Amazon’s first-party data. This includes customer search queries, browsing patterns, and purchase history. By analyzing this information, the platform can build detailed audience profiles and match ads with users who are most likely to be interested.

What are Types of Amazon DSP ads?

Amazon DSP supports a variety of ad types, allowing you to choose the best format to connect with your audience across different platforms and devices.

Static Ads

Static ads are simple image banners that include your brand’s logo, a clear call-to-action, and a product image. They are designed to be straightforward and visually appealing, encouraging users to click and take a specific action, such as making a purchase or visiting your website.

Dynamic Ads

Dynamic ads are highly personalized. They automatically change the content based on a user’s browsing history to show them the most relevant products or information. These ads can include dynamic elements like coupon codes or customer reviews to drive engagement and can link directly to a product’s detail page on Amazon.

Video Ads

Video ads allow brands to tell a richer story by combining visuals, sound, and movement. These can appear within web content, mobile apps, or streaming environments and often include a clickable link to a product page or brand site.

Over-the-Top (OTT) Ads

OTT ads are a type of video ad that appears on streaming platforms and connected TV devices, such as Amazon Fire TV. Unlike other ad types, these are full-screen, non-clickable, and non-skippable – designed mainly for brand awareness rather than direct conversions.

How Much Does Amazon DSP Ads Cost?

Amazon DSP primarily operates on a Cost Per Mille (CPM) model. This means you pay a certain price for every 1,000 times your ad is shown to a user. The actual CPM can vary based on factors such as ad format, audience targeting, and placement type.

For example, standard display ads on a third-party website often have lower CPMs compared to premium video ads shown on a platform like Fire TV. 

And broader awareness campaigns aimed at top-of-funnel audiences, especially in competitive sectors such as electronics or health and beauty, often come with higher CPM rates due to increased competition for ad space. In contrast, campaigns that target a narrow, high-intent audience or focus on retargeting can have lower costs.

Amazon offers a managed service option with the required minimum spend typically ranging from $35,000 to $50,000 USD, depending on the region and market. This service includes campaign setup and optimization handled by Amazon’s internal team, but it may come with additional costs.

If you have a smaller budget or are just starting out, you can also partner with a third-party DSP provider. These companies often give you self-service access to Amazon DSP, with monthly budgets ranging from $5,000 to $15,000.

How to Set Up an Amazon DSP Ads Campaign Step-by-Step?

Ready to start advertising with Amazon DSP? Here’s a simple walkthrough for setting up your Amazon DSP campaign.

Step 1: Create Your Campaign Framework

Open Campaign Manager and click Create Order.

Name your campaign and select a goal:

• Awareness: Focus on reaching more people and boosting brand visibility
• Consideration: Drive engaged shoppers to your product pages or website
• Conversion: Target high-intent audiences likely to make a purchase

Choose the KPI metric that matches your objective.

Step 2: Set Budget and Schedule

Choose your bidding priority and set budget management allocation.

Define your total campaign budget and flight dates (ad start and end dates).

Step 3: Add Your Line Items

Within your order, click on Create line item.

Choose the ad type and product category.

Then, choose details on where your ads will appear.

Finally, choose the targeting settings for the audience to whom you want to show your ads:

• Device: Select the device type you want to reach, such as mobile, desktop, or connected TV
• Region: Choose the specific geographic regions for your ads to target
• Audience: Include or exclude first and third-party audiences to display your ads
• Location: Include or exclude audiences based on their location to see your ads
• Domain: Create a blocklist or allowlist to control which websites or apps your ads appear on

Step 4: Set Your Bid

Enter your target bid (CPM) for every 1,000 impressions. This will determine how competitive your ad is in the real-time bidding process.

Save your line item settings.

Step 5: Build Your Creatives

On Campaign Manager, click Create Creative.

Enter the name and choose the type for the creative

Choose the settings for your creative. Here, you can select creative variations (like Coupon, Reviews, or Add to Cart), customize the visuals with headlines, logos, disclaimers, and images

Save the creative and assign it to the relevant line items

Step 6: Launch and Monitor

Once everything is set up, you can launch your campaign. 

Regularly monitor your campaign’s performance and make adjustments if needed.

What are the Best Practices for Amazon DSP Ads Campaigns?

While each business may have different goals, running successful campaigns with Amazon DSP often comes down to a few strategic principles. We’ve listed some of the best practices to help you get the most out of your advertising efforts:

Start with Clear KPIs

Before you launch any campaign, it’s crucial to define your KPIs. Do you want to increase brand awareness, drive more sales, or get more people to add products to their carts?

In Amazon DSP campaigns, common KPIs include impressions, click-through rate (CTR), return on ad spend (ROAS), and new-to-brand conversions. These metrics allow advertisers to assess performance over time and identify areas for refinement.

For example, if your main focus is brand awareness, you might look closely at reach or video completion rates to understand how well your message is getting across.

Adopt a Full-Funnel Approach

Amazon DSP can help you reach customers at every stage of their shopping journey. Instead of just focusing on the final sale, you can build a full-funnel strategy that nurtures potential customers from awareness to conversion and even post-purchase. 

This involves creating different campaigns to engage users at each level. Upper-funnel ads often focus on building awareness, while mid- or lower-funnel campaigns may emphasize product features, social proof, or promotions to drive action.

A skincare brand might use streaming TV ads to introduce a new product line, then follow up with display ads showing reviews or a limited-time offer to those who previously viewed the product but didn’t buy, guiding them toward a purchase.

Set Frequency Caps

Frequency caps limit how many times a single person sees your ad in a specific time frame, such as daily or hourly. This feature is designed to help you avoid wasting money by showing the same ad repeatedly to shoppers who are unlikely to convert. 

A frequency cap of 7 times per day at the Order level is commonly used as a starting point. You can adjust it later depending on how your audience responds and whether conversion rates improve with more or fewer impressions.

Adjust Viewability Settings

Just because an ad is displayed on a webpage doesn’t mean it will be seen. Ads placed at the bottom of web pages or outside the main view may technically count as delivered, but often go unnoticed.

To ensure better visibility, advertisers often set the viewability threshold to 70% or higher. This means at least 70% of the ad’s pixels must be in view on the user’s screen for a minimum amount of time (based on industry standards) in order for the impression to count as “viewable.”

A/B Test Creatives and Targeting

To find out what works best for your audience, you should always A/B test your ads. This involves creating two slightly different versions of an ad and running them simultaneously to see which one performs better.

Even small changes in messaging, visuals, or placement can lead to noticeable differences in performance. Over time, this data helps fine-tune your creative approach.

You might test one ad with a headline that focuses on “quality” against another that highlights “affordability” and see which message resonates more with your audience.

Frequently Asked Questions (FAQ) about Amazon DSP Ads