Podcast: Download (Duration: 50:46 — 58.4MB)
Amazon DSP stands for demand side platform, and it lets you run display ads across the web that are targeted using Amazon’s shopper data. The headline capability is competitor retargeting: you can show ads to people who viewed a competitor’s product listing and did not buy.
Brett Curry runs OMG Commerce, an ecommerce agency of 30 people that has helped over 125 companies with their pay per click advertising. He came back on the podcast to break down how Amazon DSP works, what the minimum spend requirements are, and where it fits in an Amazon ad budget.
Below is the full breakdown of DSP audience types, the returns Brett is seeing on each, and his warning about Amazon’s automated bidding.
Get My Free Mini Course On How To Start A Successful Ecommerce Store
If you are interested in starting an ecommerce business, I put together a comprehensive package of resources that will help you launch your own online store from complete scratch. Be sure to grab it before you leave!
Table of Contents
Key takeaways
- Amazon DSP is a self-service platform that layers Amazon’s shopper data onto seven ad networks plus Amazon-owned properties like amazon.com and IMDb.
- You can retarget people who visited your competitors’ product listings and did not buy, something the Google Display Network cannot do.
- Minimum spend is roughly $15,000 to go direct on DSP, or about $35,000 for Amazon’s managed service. Agencies meet the minimums for you.
- Brett sees 11x to 20x direct return on ad spend from retargeting your own ASINs, 4x to 5x from competitor targeting, and up to 3x from in-market audiences.
- Ads built inside DSP that mimic an Amazon listing outperform custom-designed display creatives by a healthy margin.
- Brett recommends putting 60% to 80% of your Amazon ad budget into sponsored products and sponsored brands before touching DSP.
- Amazon’s bid up and bid down automated bidding performed poorly in Brett’s testing. Only 10% of the campaigns he tested still use it.
What is Amazon DSP and how does it work?
Amazon DSP is Amazon’s demand side platform, a self-service ad tool that lets you build display campaigns targeted with Amazon’s own shopper data. The “DSP” is often mistaken for “display” because you do run display ads through it, but the name means the platform is self-service.
The mechanism is a layering of what Amazon knows about millions of shoppers onto ad inventory. You tell Amazon which ASINs matter to you, Amazon builds audiences from the people who interacted with those ASINs, and your ads follow those people around the web.
These are standard retargeting ads. Someone views your product page on Amazon, does not buy, then sees your ad later on ESPN.com or MSN.
Which ad networks does Amazon DSP run on?
Amazon DSP runs on about seven open ad networks plus Amazon’s own properties. The Amazon-owned inventory includes amazon.com itself, IMDb, and Amazon Publisher Services, which covers several Comscore 100 sites Amazon controls.
The open networks are third-party ad networks like AOL’s, ones you could buy from directly on your own. What makes DSP different is that you are buying that same inventory using Amazon’s shopper data for targeting.
Brett’s agency builds campaigns targeting both Amazon properties and the open networks, segmented separately. The open networks perform well in his experience.
Why pay for Amazon DSP when Amazon already retargets your listings?
Paying for DSP buys you control and visibility that Amazon’s own retargeting does not give you. Amazon retargets on your behalf for some products some of the time, and typically only for best sellers.
With DSP you choose which of your products get retargeted rather than accepting Amazon’s picks. You also see all the data, including cost per impression and return on ad spend, so you can actually optimize.
There is no visibility into Amazon’s own retargeting activity that Brett is aware of. That data blindness is the core argument for running it yourself.
Amazon DSP requirements and minimum spend
Amazon DSP has a minimum initial spend of roughly $15,000 if you go direct to the self-service platform. Amazon’s managed service, where a rep builds and runs the campaigns, carries a minimum of about $35,000, though that can be spread over a couple of months.
The third path is an agency that already meets the minimums, which lets smaller sellers test DSP without committing that spend themselves. OMG Commerce has no minimum for clients running on their DSP access.
| Access path | Minimum spend | Who manages it |
|---|---|---|
| Amazon managed service | ~$35,000 | Amazon rep builds and runs campaigns |
| Direct DSP self-service | ~$15,000 initial | You build and run everything |
| Through an agency | Agency meets the minimum | Agency, using their DSP access |
You do not have to be brand registered to run Amazon DSP. Restrictions on the ads themselves are light, and you can even send clicks to your own website instead of your Amazon listing.
DSP is a separate platform from Seller Central. You access it through advertising.amazon.com, not through your seller account.
How to retarget your competitors’ shoppers with Amazon DSP
You retarget competitors by giving Amazon a list of your ASINs and letting Amazon automatically build an audience of similar ASINs. That audience consists of people who visited those competing product pages and did not purchase.
This is the capability Brett gets most excited about, because Google has never allowed it. On the Google Display Network, the closest thing is a custom affinity audience, which builds a lookalike rather than actual visitors to competitor sites.
The audiences update in near real time. Someone views a competing spatula page and does not buy, so they land on your list this morning. They buy that afternoon and drop off the list almost immediately.
Brett notes you cannot hand-pick specific competitors anymore. Early on you could submit a list of competitor brands, and it is now fully automated from your own ASIN list.
The targeting is view-based, not purchase-based. You reach people who looked at competing products and did not buy, and you cannot target people who bought from a competitor.
Amazon DSP audience types and expected return on ad spend
Amazon DSP offers four main audience types that map onto different stages of the shopping funnel, and returns drop as you move up the funnel. Retargeting your own ASINs sits at the bottom, competitor targeting sits in the middle, and in-market audiences sit near the top.
| Audience type | Funnel stage | Direct ROAS Brett sees |
|---|---|---|
| Your own ASIN retargeting | Bottom | 11x to 20x |
| Similar product (competitor) targeting | Middle | 4x to 5x high end, 1x to 2x low end |
| In-market audiences | Top | Up to 3x, averaging 1x to 2x |
| Buyer audiences (cross-sell) | Post-purchase | Varies by attach product |
Retargeting your own ASINs is what Brett calls a no-brainer that works for essentially everybody. Competitor targeting works for most sellers, though not in every case.
What are Amazon in-market audiences?
In-market audiences are built from category page activity on Amazon, so you can reach people shopping a category like organic dog food without them having clicked a specific ASIN. Amazon infers intent from browsing behavior rather than from product page views.
Brett considers this more powerful than Google’s version of in-market audiences. Google infers intent from searches and site clicks, while Amazon is watching people actively shop inside a store with much higher conversion rates.
These audiences also refresh in near real time. Buy the organic dog food and you drop off the list, then return to category browsing 30 days later and Amazon adds you back.
DSP charges by impression rather than by click, which is why the real-time audience refresh matters so much for wasted spend. Brett ran in-market heavily for a large toy seller over the holidays and it performed very well.
Using Amazon DSP buyer audiences to cross-sell
Amazon will also build you an audience of people who actually bought your ASINs, which you can use to cross-sell related products. Someone bought your guitar and did not buy a case, so you advertise the case.
Brett’s other example is skincare: the customer bought the eye serum and skipped the facial mask, so you run ads for the mask. This is the one audience type that targets buyers rather than non-buyers.
The Amazon DSP audience size requirement
You cannot build a DSP audience unless the ASIN or ASIN group receives at least 5,000 unique visitors per month. That threshold is the practical barrier for smaller sellers.
If you do not have that traffic on a single ASIN, you bundle multiple ASINs together to reach a large enough audience. The tradeoff is relevance, because a bundle of very different products makes it hard to serve a matching ad.
There is no dynamic creative in Amazon DSP yet. You build an audience, then you build an ad, and you match the ad to the audience manually.
Amazon DSP audience duration settings
You can set the audience duration in Amazon DSP, and the default is around 30 days. Control is coarser than what Google offers.
On Google, Brett’s team builds three-day, seven-day, and 14-day audiences and bids more aggressively in the tighter windows. Amazon does not support that level of segmentation, so it is closer to a blanket 30-day window.
What Amazon DSP ad creative works best?
Ads that look like an Amazon listing beat custom-designed display creative by a healthy margin. DSP lets you build these automatically inside the platform, pulling in your product images, star ratings, and an Amazon-style add to cart button.
Brett’s team tested their own designer-built GDN-style creative against the auto-generated Amazon-style ads. The Amazon-looking ads won, likely because shoppers recognize both the product and the listing format they were just browsing.
You can still add headlines even on the Amazon-style ads, and Brett’s team tests headlines because copy has always mattered in search ads and landing pages. Whether a headline displays depends on the ad size.
DSP creative is image-based only, with standard display sizes like 250×250 squares, skyscrapers, and banners. The builder auto-adjusts your base ad to fit different sizes, and you can also create individual sizes manually.
Placement controls exist but are limited. You can restrict to Amazon properties only, the Amazon app only, or the open networks, without the finer content exclusions Google now offers.
How to prioritize your Amazon ad budget across ad types
Maximize bottom-of-funnel sponsored products and sponsored brands before spending a dollar on DSP. Brett’s allocation for a seller doing $1 million a year puts 60% to 80% of the budget into those two ad types, with sponsored products taking the majority.
Product targeting ads, where your listing appears on a competitor’s product page, are a subset of sponsored products and Brett rates them highly. The returns are nearly identical to sponsored products elsewhere, with lower volume.
From what is left, roughly 10% to 30% goes to DSP retargeting, and a smaller slice goes to similar-product and in-market audiences. Start small on the higher-funnel types and ramp up as results justify it.
The logic is predictability. Sponsored products deliver a consistent, reliable return, so you build that foundation first and treat DSP as incremental growth on top.
Why you should avoid Amazon’s automated bidding for now
Amazon’s bid up and bid down automated bidding performed badly in Brett’s testing, and he recommends avoiding it. Of the campaigns his agency started testing it on across roughly their top 20 advertisers, only about 10% still use it.
Half the campaigns went haywire and spent aggressively with no corresponding return, so his team killed those quickly. Another 30% fluctuated too much, doing something reasonable one week and something inexplicable the next. About 20% performed acceptably.
Machine learning systems need enormous volumes of data to work, and Brett’s advice is to let other advertisers supply Amazon with that data for now. Test it on a campaign or two if you want, and expect increased spend and increased ACoS.
Google’s smart bidding followed the same arc. It was poor for about a year after launch and is now good enough that Brett’s team hands the algorithm a target ROAS and lets it optimize against signals no advertiser can see.
Bid down only, which has been available longer, still works well. The caution applies specifically to bid up and down.
How Amazon ad costs compare to Google and Facebook
Amazon CPCs are often higher than Google Shopping CPCs, but Amazon conversion rates are substantially better, sometimes 3x better, so the economics still work. That is the tradeoff Brett sees across his client base.
Google search CPCs have risen across the board, though ecommerce specifically has been stable over the past year. Brett attributes that to maturity in Google Shopping, where auction-based pricing self-regulates once advertisers hit the point where more spend stops being profitable.
Facebook costs have climbed roughly 30% or more, driven partly by Facebook restricting ad inventory to clean up the feed. YouTube costs are rising too, though Brett’s team is finding ways to keep it profitable for ecommerce.
Can you run Google Shopping ads to Amazon listings?
You cannot run Google Shopping ads that link directly to Amazon listings. Amazon has been on and off about running Shopping ads for its own listings, and third-party sellers cannot feed products that point to Amazon.
Google search ads to your Amazon listings are allowed and Brett’s agency runs a decent amount of them. It is a good way to drive external traffic that increases velocity and organic ranking on Amazon.
The catch is Google’s one-ad-per-domain rule for any given keyword. If Amazon is already bidding on your top keywords, you likely will not be able to show, though it is still worth creating the campaign to see whether you win the auction.
Tracking is the real problem. You see click and cost data in Google, and Google and Amazon do not connect conversion data back to each other.
You can route a Shopping ad to a page on your own domain with an add to cart button that sends the buyer to Amazon. That works, and it makes the data messy.
What is Amazon Attribution?
Amazon Attribution is a pixel-based tool that tracks off-Amazon campaigns and reports whether those visitors converted on Amazon. You create pixels for Google search campaigns, display campaigns, and similar off-platform traffic.
At the time of this episode it was in beta and available only to vendors, so Seller Central accounts could not use it. Brett expects it to reach everyone eventually and calls it a potential game-changer for measuring external traffic.
Frequently asked questions
What does DSP stand for in Amazon advertising?
DSP stands for demand side platform. It means the platform is self-service, so you build and manage your own display campaigns rather than going through an Amazon rep.
How much does Amazon DSP cost to get started?
Amazon’s self-service DSP requires an initial spend of roughly $15,000, and Amazon’s managed service requires a minimum of about $35,000, which can be spread across a couple of months. Agencies that already meet the minimums can run smaller test budgets on your behalf.
Do you need Brand Registry to run Amazon DSP?
No. Brand Registry is not a requirement for Amazon DSP, unlike sponsored brands ads, which do require it.
Can Amazon DSP target your competitors’ customers?
Amazon DSP targets people who viewed competing product listings and did not purchase, based on a similar-ASIN audience Amazon builds automatically from your own ASIN list. It does not let you target people who actually bought from a competitor.
What return on ad spend does Amazon DSP deliver?
Brett Curry sees direct ROAS of 11x to 20x on retargeting your own ASINs, 4x to 5x on the high end for competitor targeting, and up to 3x for in-market audiences. Amazon also reports a brand halo figure that Brett considers overstated by as much as 3x.
How many visitors do you need to build an Amazon DSP audience?
You need at least 5,000 unique visitors per month to a single ASIN or to a group of ASINs before Amazon will build an audience from it. Smaller sellers typically bundle ASINs together to clear the threshold.
Should you use Amazon’s automated bid up and bid down?
Brett Curry recommends avoiding it for now. In his agency’s testing across roughly 20 top advertisers, half the campaigns overspent wildly, 30% were too volatile to trust, and only about 10% of the original test campaigns still use the feature.
Where do you access Amazon DSP?
Amazon DSP lives at advertising.amazon.com, separate from both Seller Central and Vendor Central. You will not find it inside your regular seller account.
