What Makes Amazon DSP Unique?

In a marketplace as competitive as Amazon, relying on PPC alone to drive growth and revenue can hold back your brand’s potential. Amazon DSP (Demand Side Platform) goes beyond keyword-based advertising to help brands leverage Amazon’s first-party data and gain visibility with custom audiences both on and off the platform. Also, Adverio even support you with Amazon DSP Management. 

Maximizing Amazon DSP: Going Beyond the Basics to Win Market Share

But DSP isn’t just another ad channel; it’s a strategic tool that allows brands to reach untapped markets and secure incremental growth. 

Whether you’re looking to retain customers, cross-sell, or even intercept competitors’ traffic, Amazon DSP provides advanced audience targeting options that are unmatched. 

Here’s a deep dive into what makes Amazon DSP unique, with strategies and insights to make it work for your brand.

What Makes Amazon DSP Unique?

Amazon DSP offers access to Amazon’s rich first-party data, setting it apart from traditional ad platforms that rely on generalized browsing behavior. Amazon’s data comes from the platform’s shopping and browsing activity, giving a detailed view of customer preferences, purchase intent, and even competitor product interactions.
This approach means DSP can target audiences based on actual purchase behavior, from previous orders to specific brand engagement. This data enables you to advertise in a way that’s not only targeted but also uniquely tailored to audiences who are highly likely to convert.

Amazon DSP Funnel Segments: Customizing for Maximum Impact

DSP’s power lies in audience segmentation, and it all starts with building a targeted funnel that meets customers at different stages of their journey.

1. Loyalty Audiences

This group includes customers who have previously purchased from your brand but haven’t returned recently. DSP allows you to segment based on purchase timelines—such as those who bought in the past year but haven’t repurchased in 90 days. This is especially valuable for consumable products where regular reorders drive long-term revenue.

2. Cross-Sell Audiences

For brands with a broad product portfolio, cross-selling is a powerful strategy. By identifying customers who bought one product (say, a supplement) but haven’t purchased others (like protein powder or workout accessories), you can easily grow your customers’ lifetime value without increasing acquisition costs.

3. Retargeting for Consideration

Retargeting is at DSP’s core, letting you reach people who viewed your product but didn’t convert. This audience has already shown intent, so this strategy is essential for bringing them back to close the sale.

4. Competitor Targeting

Capture market share by targeting those who visited or purchased from competitors but haven’t engaged with your brand. Amazon DSP enables you to create custom audiences based on competitor ASINs and intercept audiences who may not yet be aware of your product.

5. Complementary Product Targeting

Targeting complementary products allows you to reach people whose recent purchases align with your offerings. For instance, a brand selling outdoor gear could target customers who recently bought camping equipment or hiking shoes.

6. In-Market Audiences

This segment includes customers actively browsing in your category. Amazon’s in-market data helps DSP identify audiences likely to be in a buying phase, making this audience segment ideal for brands with a significant product differentiation.

7. Demographics and Contextual Audiences

DSP also enables broader reach through demographics or real-time browsing behavior. Demographic targeting is useful for higher-level brand awareness, while contextual audiences let you serve ads on pages with relevant content.

Developing Your DSP Strategy: Audience, Budget, and Bid Optimization

Building an effective DSP strategy means understanding where to allocate budget and how to balance audience targeting with optimized bids.

• Prioritize Custom Audiences First: Start with high-intent custom audiences like loyalty and retargeting, which tend to deliver higher conversions. Custom audiences allow you to allocate ad spend effectively and reach customers at different points in their journey.
• Use Frequency Caps: DSP offers the option to set frequency caps, which helps avoid ad fatigue. By setting limits on how often a user sees your ad, you ensure your brand stays top of mind without overwhelming potential customers.
• Cross-Sell with Specific Intent: When targeting cross-sell opportunities, consider pairing products that complement each other naturally. For example, pair a fitness supplement with a muscle recovery product or bundle items that enhance the customer’s original purchase.
• Leverage Competitive Edge with Competitor Targeting: Targeting competitor audiences requires a clear understanding of your competitive advantages. If your brand has a higher review count or superior product attributes, DSP can help you intercept customers on competitors’ product pages, converting them with a clear, differentiating value proposition.
• Ad Creatives: Use Amazon-Centric Ads: DSP ads that pull in the Amazon Prime badge, reviews, and “add-to-cart” options tend to perform better. Customers feel reassured when they know they’re staying on Amazon, making responsive e-commerce ads highly effective for DSP.

Measuring Success: How to Track DSP Performance and Incrementality

A unique challenge with DSP is tracking real impact beyond just the ROAS shown in the dashboard. Here’s how to make sure you’re measuring DSP’s value effectively:

• Track Incrementality, Not Just ROAS: ROAS is important, but a better metric is incremental sales. Track overall sales before and after implementing DSP to see how it’s contributing beyond what PPC achieves alone.
• Test and Iterate with Lookback Windows: Test different lookback windows (7, 14, or 30 days, and even up to 365 Days) depending on your average customer buying cycle. Longer lookback windows are ideal for higher-priced items, while shorter windows work better for fast-moving products.
• Consider Detail Page View Rate and Click-Through Rate: When assessing mid-to-top-funnel campaigns, pay close attention to the detail page view rate and click-through rate. These metrics offer a clearer view of how many people DSP drives to your listings and the engagement levels your campaigns are generating.
• Monitor Branded Search Lift: DSP’s influence often shows up in branded search volume, where customers familiarized with your brand begin searching for it specifically. Keep an eye on brand-name search growth, as it’s a sign of increased awareness and brand loyalty.

Common DSP Pitfalls to Avoid

DSP offers a powerful way to scale your reach, but there are common missteps that can waste budget and reduce effectiveness:

• Avoid Over-Targeting Competitors without a Unique Value Proposition: Targeting competitors is effective only when your product offers a noticeable advantage, whether in price, reviews, or quality. Otherwise, ad spend is better allocated toward retargeting or cross-selling.
• Using Wide Audiences Prematurely: Start with custom and in-market audiences before expanding to broad demographics. Wide audiences are typically more costly and less targeted, which is why starting with custom, in-market, or retargeting audiences offers better ROI.
• Neglecting Off-Amazon Inventory: Brands often miss the potential of off-Amazon placements. For categories with high competition, off-Amazon placements can provide cheaper impressions and drive substantial traffic back to your product pages.
• Not Testing AMC for Audience Insights: Amazon Marketing Cloud (AMC) offers valuable insights into how your audience interacts with DSP ads. With AMC, you can identify lookback windows, purchase behavior, and additional audiences that can be useful for both DSP and PPC strategies.

Combining DSP with PPC for Full-Funnel Domination

While DSP offers powerful targeting options, PPC is still critical for capturing high-intent traffic. Here’s how to use both together:

• PPC to Capture Demand, DSP to Build Awareness: PPC is ideal for users actively searching for your products, while DSP drives top-of-funnel awareness, helping to create new interest and capture demand when customers are ready to convert.
• Use Retargeting to Bolster PPC Efficiency: DSP lets you retarget customers who clicked on PPC ads but didn’t buy. This approach creates a closed-loop system that maximizes the value of your PPC traffic and increases conversion rates by reinforcing purchase intent.

Final Thoughts: Is Amazon DSP the Next Step for Your Brand?

For brands that have grown as far as PPC alone can take them, Amazon DSP offers a powerful way to capture incremental revenue, drive repeat sales, and establish deeper market penetration. DSP is ideal for brands with a defined competitive edge, sufficient customer reviews, and a clear market position.
Looking to see what DSP can do for your brand? Connect with our team to learn more about how DSP can open up new revenue streams and drive meaningful growth.