An Introduction to Amazon DSP

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Amazon’s demand-side platform – or DSP for short – is a form of programmatic advertising developed by Amazon to broaden the horizons of opportunity for those advertising their products on Amazon.

It is extremely unique in its features; from Amazon’s own inventory of websites to hundreds of third party publishers in the most relevant locations, DSP users can market, remarket and cross sell to audiences via a plethora of mediums. 

Not only is the targeting highly precise and versatile, third-party publishers are strictly monitored against Amazon policies and impressions and clicks are free of ad fraud, allowing sellers to be reassured of their brand’s security. Further to this, over many decades Amazon has accumulated an abundance of user insights; recording shoppers’ behaviours, demographics and purchasing habits to provide advertisers with infinite targeting opportunities.

Ads are sold based on views (CPM – cost per thousand impressions), in contrast to the CPC (cost-per-click) model and are displayed as video or display ads. This combination stems from the fact that Amazon DSP is primarily designed for expanding brand reach, instead of to drive user interaction. 

Towards the end of 2020, the wealth of possibilities that come with Amazon’s DSP led to it being renamed advertisers’ number 1 preferred platform, a title that it has stolen back from Google, bolstered by the last few months’ ecommerce surge. 

Unsurprisingly, 27% percent of respondents in the survey that led to this achievement told the market research firm that Amazon was their preferred DSP, followed by Google and The Trade Desk. An astronomical 46% percent of respondents said they used Amazon’s DSP in the past 12 months. 

On this platform, advertisers can capitalise on link-in and/or link-out campaigns and may market to the open exchange (OE) or Amazon’s owned and operated (O&O) supply sources. This blog will explore both of these subcategories, showing the many varieties of advertising DSP offers.

Open exchange vs Amazon O&O

Open exchange is the medium by which advertisers using Amazon DSP can market to people on a variety of platforms away from Amazon’s own sites. Open exchange includes Amazon Publisher Services (APS). Firstly, advertisers can access Amazon’s marketplace of 10,000+ directly integrated sites and apps to place their ads. In addition, there is access to inventory on sites not owned or operated by Amazon, available through leading exchanges such as Google AdX and Rubicon. These are known as third party services and are a unique feature to Amazon DSP. Open exchange is massively beneficial for many who want to expand their reach to people who are not on Amazon and can be used – with pixel tracking – to follow a customer on their internet journey. Hence, open exchange is both efficient and provides opportunity to scale.

Amazon O&O, on the other hand, provides exclusive advertising inventory from Amazon retail sites and O&O properties such as IMDb. This spreads the reach of ads across different Amazon apps which can be utilised to leverage specific audience types to generate sales. As the viewer of the ad is always on an Amazon site, it could be argued that they are more likely to convert as they may be less distracted by external factors and are more focused on shopping.

iphone screen showing icons on screen

Both O&O and OE can be used in link-in and link-out campaigns, but below we will dive into the differences between the two…

Link-in vs Link-out

In principle, link-in and out variations have separate functions and will lead the viewer to different destinations. Essentially, link-in campaigns display ads that, when clicked, will direct customers to a brand’s product detail page, storefront or campaign landing page. In contrast, link-out campaigns take audiences away from Amazon sites, leading them to a non-Amazon destination, such as a brand’s website. 

Link-in

Link-in campaigns are the more commonly used type and are predominantly adopted to drive consideration and purchase. The customer journey through a link-in campaign is as follows:

This simple flow shows the ease of link-in campaigns which provide a way for sellers to bring in traffic from external mediums as well as directly on Amazon sites and bring them to their product. As both of these types can be used to leverage ad impressions, both open exchange and Amazon O&O campaigns can be built. 

The audience link-in campaigns reach is entirely subject to the advertiser and can be decided on a multitude of factors. Audience insights can provide a foundation for who you may like to bring to your detail page. For example, if you own a skincare brand and audience insights show your best converting demographic are women between the ages of 18-26, you can show your ad for a face cream to this cohort. Alternatively, you could remarket your product to those who have purchased your product in the last 3 months who have not made a purchase. The power to manipulate audience insights to generate audience types regarding purchasing behaviour is the driving force behind the influence DSP has in advertising. To learn more about building DSP audiences from scratch you can read the blog attached here.

Below is an example of an open exchange link-in ad, when a customer clicks on it they will be directed from their current page to your Amazon display page.

Link-out

Link-out campaigns are an untapped goldmine for a lot of advertisers who are promoting external sites. They take the enormous amount of customers from Amazon sites away from Amazon to the advertisers’ desired location. For example, a new school attempting to recruit new students could target Amazon shopper mums and dads who have searched for back to school items and take them onto their school website landing page. Only certain campaigns can be approved for link-out, these include:

Link-out campaigns are purposed in moving people from Amazon to external websites. Hence, typically the only type of supply source used is Amazon O&O sites. Below is an example of a link-out campaign, advertising a product and brand that can’t be found on Amazon.


https://insights.nozzle.ai/what-is-amazon-dsp

Conclusion

Advertisers have already begun to shift spend to Amazon DSP in order to leverage impressions in the most relevant places, with millions of viewers at their disposal. The link-out feature makes advertising on Amazon a simple way to expand your reach and means that the DSP can be adjusted to be useful for every brand and organization! After all, if your audience tends to shop on Amazon – as 197 million people do in the US each month (more than the population of Russia) – then DSP can hit your target audience. With all things DSP considered, now is the time to move onto the platform, with confidence in the safety and potential of your ads. 

For more information on how our Amazon DSP agency could help you to scale your business using the platform you can visit our DSP website pages and enquire today.

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