Amazon DSP & How It Can Grow Your Business

2021-10-15 16:38

Since the pandemic, eCommerce has become a focus of attention. With an increasing trend of small to large scale businesses making a shift to digital, it is more than clear that eCommerce is here to stay. With Amazon being the world’s largest eCommerce platform for merchants across the world, the race to reach and connect with desired customers before the competition is never ending. For the millions of active sellers on Amazon including cross-border eCommerce merchants, do more effective ways of capturing desired audiences, driving loyalty and scaling conversions exist?

The answer is yes. While product quality and a positive purchase experience are the basis for attracting loyal customers, marketing strategy is also key. SP is the most common form of advertising for many Amazon stores where keyword search optimization, brand exposure and clicks help us better understand and obtain consumer insights. However, other more specific advertising methods that take into account precise audience targeting to influence consumer behavior exist too; That is where paid display advertising through Amazon’s demand-side platform or best known as Amazon DSP comes in. 


What is Amazon DSP?

DSP stands for Demand-Side Platform. In other words, Amazon DSP is a demand-side platform that allows advertisers and agencies (SparkX is an authorized Amazon DSP service provider in China) to reach online audiences with programmatic buying. Amazon DSP serves both advertisers who are sellers and those who exclusively use DSP to access Amazon's robust audience data.

Amazon DSP places ads on the websites and applications it owns and operates, such as its official website and IMDb through programmatic buying. As a result, Amazon DSP enables access to advertising resources directly from leading publisher sites through Amazon Publisher Services (APS, overseas high-quality traffic resources, including PC and mobile devices) and large third-party exchanges. Compared to CPC advertising models, the main benefits of Amazon DSP can be defined as:

1. DSP advertising is purchased programmatically. Based on a dynamic pricing model, advertisers can carry out real-time bidding, purchase and manage display advertising more efficiently and reduce the 1000-exposure cost of display advertising to maximize its value.

2. SP advertising mainly covers the middle and lower stages of the marketing funnel to promote purchase intent and drive conversions. Although this method is widely practiced, it is a passive approach towards advertising. DSP is an active type of advertisement which runs throughout the whole marketing funnel from top to bottom (brand awareness, consideration to purchase). DSP advertising is considered to be more accurate because it pinpoints audiences through behavioral targeting based on:

a. First-party consumer data that can be uploaded on to the DSP, allowing advertisers to expand the matching of similar groups according to these lists.

b. Amazon Audiences, which are unique to Amazon. Data is collected on the behavior of Amazon users. Groups of people are then divided according to their shopping habits such as search, clicks, browsing, add-on purchase and purchase behavior, including basic demographic attributes (age/gender), lifestyle, in-market, ASIN targeting, contextual targeting and remarketing.

Access to Amazon's unique, real-time eCommerce data is one of the biggest advantages of using Amazon DSP, which can help brands redirect target audiences with precision based on the behavior and habits of these users.

3. It combines diversified ad formats to capture core audience groups across different devices like mobile, tablets and PC. Formats include video ads, dynamic eCommerce ads and static image ads.

4. Covers display advertisements onsite and offsite according to the previously mentioned targeting strategies. At the same time, it can also reach target audience groups offsite to create closed loop traffic and reintroduce customers offsite to onsite.

On a final note, Amazon DSP can help brands throughout different stages of the marketing journey to improve brand awareness, increase consideration, and drive purchase intent of all target groups such as new category users, new brand users, new product users as well as new users to old users.