What is Amazon DSP?

Welcome back to the Amazon Blueprint Podcast. One of Amazon’s best-kept secrets is Amazon DSP. I’m going to expose Amazon DSP. I’m going to give you a step-by-step guide on how to use it. I’m going to show exactly who this is going to work for and who this is not going to work for. You don’t want to waste your money? Make sure you follow along because I’m going to explain everything. There’s a lot of nuances, so pay attention because there’s things that if you don’t get right, you might end up burning a lot of money. My name is Mina Elias, aka the Egyptian Prescription, and I am the founder of Trivium Group, an Amazon ads agency. We run a lot of brands on Amazon, over 150 brands. We do Amazon PPC, DSP, creatives, SEO, all that stuff. I’ve been diving deep into Amazon DSP. This goes back two years ago when I first got my own seat, and I actually spent a year mastering Amazon DSP on my own account, MMA Nutrition. There were so many nuances. Before starting my agency, I interviewed a lot of other agencies on using Amazon DSP back when it was just MMA Nutrition.

I found out that there’s a lot of shady people are doing, and I want to expose all of that. This is not to talk down on anyone, but make sure that you understand what’s going on so that you don’t get scammed. In the description below, I’m going to link a full guide to this Amazon DSP just so you don’t have to memorize everything. It’s in something called the toolbox, the Amazon Growth toolbox. In that toolbox, you’ll find a lot of other free guides. But anyways, let’s get right into it. What is Amazon DSP? Amazon DSP stands for Amazon’s Demand-Side Platform. What that means is it’s programmatic advertising by Amazon. Now, in layman terms, think of Men’s Health Magazine or think of any of those big blogs on the internet. They’re pumping out a ton of content every single day, 10, 20, 30 articles a day. They’re bringing in millions of visitors to their site. Why do you think they’re doing that? Because they want to sell ads on their site. They’re saying, We’re bringing millions of people to our site. We’re going to sell this inventory. You’re reading an article and there’s a link here and then there’s an ad there.

That is called Supply Side. That’s where you supply the ads. Now, Amazon’s Demand Side is basically where it connects the Supply Side with people like us who have demand on advertising. Basically, they’re middleman. They’re a middleman. They collect the fee. We pay money to advertise, they pay out advertising to the supply side, and they keep a little bit of it. That’s Amazon DSP advertising. Now, let me break it even further. Amazon’s DSP advertising is a separate platform from Amazon PPC. It’s not like Campaign Manager, it’s its own separate entity. You actually have to get a seat. I fought to get a seat. I had to commit to $100,000 a month minimum in ad spend. We spend now like $800,000 a month on DSP because we have a lot of clients. But most brands can’t afford to do that, and so it’s very hard to come by a seat. But once you have that seat, you get access into Amazon’s DSP platform. This is where you can advertise for literally any product. What you do here is you basically have audiences, so people that you’re going after, and you have placements where you’re going to show the ads.

You also have creatives, what you’re going to show the ads. Then there’s a few other nuances. Now, let’s talk about audiences. Audience is the thing that makes Amazon DSP super valuable because you get access to Amazon’s first-party data. I’m talking about people who viewed different products on Amazon, people who purchase different products on Amazon, people who are new home buyers, or they just had a newborn or newlyweds or all of these different kinds of things. Amazon has that data and it sells it to you. Now think about this. How valuable would it be if you could figure out people who viewed your product but didn’t purchase yet, or people who viewed a competitor’s product but haven’t purchased yet. Super valuable. Amazon gives us advantage of all of that data. How does Amazon DSP compared to Amazon PPC? Amazon DSP is completely different. When it comes to PPC, you’re basically going after search terms. People are typing in search terms in the search results on Amazon and your product is showing up. There’s none of that in DSP. With DSP, you’re following people around, so it’s all audience-based. I’m saying, okay, I want you to find everyone who’s viewed my product in the last 30 days but hasn’t purchased my product in the last 30 days.

These are people that came to the listing, they just didn’t convert, and exclude people who converted on other products, competitors’ rights. So anyone who purchased any of my competitors’ products, let’s exclude them. You find that segment of people and then you start following them around. Then you can say you want to follow these people around and advertise on Amazon. Com or Amazon Mobile-Web or mobile app or even third-party publisher sites. I’ve actually seen some ads on Tinder. You can also do Twitch. You can also do Amazon Fire TV, so you can also do streaming and a lot of cool things. But the point is you’re following these people around. Next, let’s talk about the structure of Amazon these things. The way that the structure works, like campaign structure and that stuff. You have an order. An order is basically like a campaign, or I like to call it a funnel segment. It’s basically what product are we advertising and what funnel segment are we advertising in? Funnel segments are basically loyalty, competitor targeting, complementary product targeting, in-market. I’m going to talk about a funnel in detail in a second. You have the order, and under the order, you have the line items.

The line items are almost like ad groups. Now, in each line item, you have to have a few different things. You have to have an audience, you have to have creatives, and you have to have placements. Audience is who you’re targeting. Creatives is what you’re showing them, and placements is where it’s going. There’s a lot of other settings as well, like budget and frequency, when you’re going to show, and then settings like what’s the goal? Is it a conversion goal? Is it awareness? But generally, all you need to know is orders of the campaigns. You’re going to pick a funnel segment, and that’s what you’re going to set as the order. One product, one funnel segment. Then under that, you have the different line items. Basically, what’s the audience? Where are you advertising? What are they going to see? Now, the bidding model on Amazon DSP is a CPM model. It’s a cost per million or basically what is the cost for showing your ad to 1,000 people. People seeing your ad and not even clicking, you get charged for that. This is important because there’s something called viewability. Now, if your ad loads on a page, it could be at the bottom of the page and you haven’t scrolled to the bottom, you would get charged.

You can set settings that specify that you only want to show if you’re above the fold. Don’t charge me if I’m under the fold. Obviously, this is going to be more expensive, but what’s the point of paying for an impression if you’re going to be at the bottom of the page and no one’s ever going to see you. Now, let’s talk about budgets. For each funnel segment, you probably want to start with at least $2,000. Anything less than that, I haven’t seen work well. $2,000 per funnel segment, again, I’m going to talk about the different funnel segments, but the incredibly annoying thing about Amazon DSP is that you have to wire the money to them. Here’s how it works. You hire me as an agency, you have to wire me the money, then I spend the money on ads, then I have to wire Amazon the money that was spent on ads. It’s incredibly annoying. It’s not like you can connect a card to an advertiser and they could just auto bill you. This happens once a month. That’s one of the downsides of Amazon DSP is their billing model. There’s also something to be aware of, and it’s something called the agency fee.

It’s actually a hidden agency fee. In the Amazon DSP platform, what I can do in the backend is set an agency fee, let’s say 10%. What that will do is you wire me $30,000, I spend that $30,000 on Amazon. Amazon shows that I spent $30,000, but it keeps $30,000 unspent, and it says that that’s the agency fee. Actually, agencies could be skimming off the top. You have to make sure that in the settings there’s no agency fee if you’re paying a retainer, or confirm that the agency fee is what you agreed on. Now, let’s talk about audiences. What are the different audiences that you can build an Amazon DSP? There’s views and purchases of products. These are the most powerful audiences in my opinion that you can build. Views is basically anyone who’s viewed any product on Amazon. Purchases is anyone who purchased any product on Amazon. Let’s do this. For example, Element T is a big, big brand. They’re spending a ton of money off of Amazon, and I want to take advantage of that. One thing that I can do is I could say, Show me everyone who’s viewed Element T’s product but has not purchased Element T’s products in the last 30 days and has not viewed me or purchased from my competitors in the last 30 days.

This is unique audience, someone who hasn’t viewed me, viewed Element T, but didn’t purchase and hasn’t purchased my competitors yet. Obviously, you can understand why that’s so valuable. Now, there’s other audiences you can take advantage of, like in-market, someone who’s in-market for a product. Amazon uses search history data based on your search results on Amazon to see what you’re in the market for. Contextual is another type of audience that you can build on Amazon. Demographics is another good one where if you understand your demographics, you can go after that. But any of those other funnel segments, in my opinion, that’s not views or purchases of a product, can sometimes lead to poor performance because it’s good for awareness, but is it good for conversions? I’m not really sure. Next, let’s talk about creatives. Creatives on Amazon DSP come in two ways. You can have custom creatives, like any image that you ever want to create, or responsive e-commerce or dynamic e-commerce. I think responsive e-commerce is the best. Responsive e-commerce is basically like sponsored display ads where Amazon takes elements from the listing and creates the ad. It looks very native, and I think that’s a big reason why that performs better than custom creatives, is because people don’t recognize it that much as an ad.

They’re like, Okay, it’s part of Amazon. But when it’s very custom, I think people realize that it’s an ad and they’re less likely to convert. Then for custom creatives, there’s a huge pain in the ass. For every single placement that you’re going to show up for, you have to create a custom image. I’m talking 16 different sizes for each custom creative that you’re going to launch. That just makes responsive e-commerce so much more attractive to use because Amazon does all of the work for you. In responsive e-commerce, you can actually pull a review. You can go into any one of your reviews on your listing, copy-paste it, and then when your ad shows up, it’ll show up with a star rating and actually a quoted review and the headline. All right, what about placements? Where can you advertise when you’re utilizing Amazon DSP? There’s Amazon Owned and Operated, which is Amazon. Com and IMDb, which Amazon owns. Then there’s third-party publisher sites. Third-party publisher sites is literally anyone in the world that wants to sell ads to Amazon. Anyone that’s on the supply side that wants to sell ads to Amazon. Think Men’s Health or any of the publishers that are supplying different sites and all that stuff that are driving a lot of traffic.

Any of those, you can advertise on them, you can advertise on Amazon. Com. What I found is that Amazon. Com, only Amazon. Com, desktop, mobile web, and mobile app, performed the best. All the other ones, even if we’re talking awareness and whatnot, have not performed well at all for any of the brands that I’ve run. Let’s talk about the funnel. The funnel is the most important part when it comes to Amazon DSP. How do I build the funnel? Each funnel segment represents a goal that I have. At the bottom of the funnel, I’m going with loyalty. Loyalty is basically everyone who’s purchased from me in the past but has not repurchased from me. The audience is basically people who purchased from me in the last 365 days but have not purchased again in the last 60 days. This is for a typical supplement brand. If you don’t have a product that can be purchased multiple times, this is not applicable to you. But if you’re something like a supplement or a CPG brand, you would love this because it’s people who purchase from you but have not repurchased from you. What I always do is I exclude anyone who’s purchased from my competitors in the last 30 days because if they purchase from them, they’re not going to purchase from me.

Above that, I do cross-selling. Everyone who’s purchased from me one product but hasn’t purchased another product. Everyone who’s purchased product A in the last year but hasn’t purchased product B or product B’s competitors, because I don’t want to go after any of the competitors. Again, if they purchase a competitor’s product, they’re not going to buy mine. Above that, I have retargeting. Anyone who’s viewed my product but hasn’t purchased the product. Anyone who’s viewed in the last 30 days, I know they’re in the market, they’ve viewed my product, but they haven’t purchased from me or my competitors in the last 30 days. Again, negating anyone who’s purchased from me or my competitors because I don’t want to target them because they’ve already purchased a product. Above that is competitor targeting. That’s when we start getting into building new audiences. That’s everyone who’s viewed my competitors but has not viewed me and has not purchased me or my competitors in the last 30 days. This is funneling in a lot of new traffic. It doesn’t have to be viewed my competitor in the last 30 days. It could be viewed my competitors in the last 60 days or 90 days.

I’ll build a bigger and bigger audience. As long as they haven’t purchased from me or my competitors in that same frame, that’s good. What that funnel segment does, going after my competitors, builds my top of funnel. It builds my new audience, people who don’t know me. Guess what? They’re going to come in, they’re going to click on my product, they’re going to start getting retargeted. Then they’re going to purchase, then they’re going to get retargeted again when they need to refill. You can see how Amazon DSP is beautiful in really building a brand. Above that is complementary product targeting. Very similar as competitor, but I’m going after complementary products. People who purchase complementary products but have not purchased me or my competitors in the last 30 days. Then above that, I go to in market, so anyone who’s in market for my product but hasn’t purchased from me or my competitors, and above that, demographics. Anyone who is in the right demographic but hasn’t purchased from me or my competitors. Demographic and in market can get very wonky and they can honestly produce bad results, so I have to test a lot. One other cool thing you can do is audience overlap reports.

I can literally find which audiences overlap with people who are purchasing my product. I can download an audience overlap report and it says something like, you know what, Mena? Everyone who’s purchased keto products have an 80% chance to be in market to purchase your product. Anyone who’s purchased protein powders has a 75% chance to being someone who’s going to purchase your product in market for your product. I can use those audiences to build a lot of that in-market audiences. Now, KPIs are very important because you don’t want to have the wrong KPIs for the different funnel segments. When it comes to loyalty, the main KPI is ROAS. You want obviously the highest return on ad spend. You spend a dollar, you want to get $10 back, and it’s usually going to perform the best because the people who already know you. Cross-selling is a hit or miss. But again, target is ROAS because you want the highest return on ad spend. Retargeting, once again, is ROAS. It’s another funnel segment that we really care about driving a lot of sales from that funnel segment. Anything above that, competitor targeting, complementary product targeting, in-market, demographic, all of those other funnel segments, the main KPI is click-through rate and detail page view rate.

It’s exactly for the reason that I told you before, where anyone who sees your ad will then get served a second ad that is a retargeting ad. If they view one ad up here, they’re going to get charged, and then they view another ad in retargeting, they’re going to get charged down here, but all of the sales is going to go attributed to the retargeting because it’s the last one that they saw. That’s how Amazon DSP works. You can’t tell which one they viewed first, but you can tell which one they viewed the last and then made a decision from that. When you’re running your numbers and you want to know if the funnel segments are performing well, when it comes to the lower funnel segments, it’s ROAS, upper funnel segments, click-through rate, and detail page view rate, and you have to add up all of the spend and add up all of the sales to figure out what your true ROAS is. Okay, so which brands does Amazon DSP work exceptionally well for? Any brand that is reasonably priced, so not too expensive, maybe $30 to $50. If it’s a consumable and you can purchase it multiple times, if it has a high conversion rate, if it’s well optimized, if the reviews are high, those are all things that are going to make Amazon DSP work because Amazon DSP is not going to be as effective as PPC.

Remember, PPC is someone coming into Amazon looking to buy. Amazon DSP is that you’re following people around. Maybe they want to buy, maybe they don’t want to buy. You’re just trying to track them around, show up, show your branding in front of them, hope that they would convert. Again, this is going to work amazing. If you have a high conversion rate, if you’re spending a good amount of money on Amazon PPC, this is going to work good for you. This is not going to work well for you if your conversion rate is low. If you’re already struggling on being profitable with PPC, you’re never going to be profitable with DSP. Dsp is not going to save you. If you’re a very expensive product, you’re probably going to be able to run retargeting only with Amazon DSP. Sometimes there are exceptions, but it’s going to be a lot harder than a consumable product. If you did not max out your ad spend on PPC, you should definitely not run DSP. Ppc is always going to outperform DSP and should always be run first. But the beautiful thing is when it comes to the funnel, PPC is in the middle, DSP is at the bottom, and DSP is at the top.

When you want to build a full comprehensive funnel and really grow your brand, adding DSP is amazing. But if you haven’t maxed out PPC, there’s absolutely no reason that you should run it. If you don’t want to guess if this is going to work for you or not going to work for you, I put a link in the description below, fill it out, and I’ll reach out and let you know if this is going to work or not going to work for your brand, so whether you should run it or not run it.