Discover the benefits of advertising through the Amazon DSP platform and the top bidding strategies to implement with your Amazon DSP campaigns.By Dawn JenksMarch 24, 2022
Stay on top of the latest e-commerce and marketplace trends.
Amazon DSP, which stands for demand-side platform, is a system that allows advertisers to set bids and purchase ad inventory from multiple ad exchanges at a single time.
When using Amazon DSP, you can support a wide range of advertising goals, from awareness-based prospecting to remarketing to drive conversions. You can also identify users in the upper funnel of the purchase consideration stage to keep them interested as they move further in their decision-making process.
Read on to learn more about the benefits of advertising through the Amazon DSP platform and our top recommended Amazon DSP bidding strategies to implement for your campaigns.
What Is Amazon DSP?
Amazon DSP is an impression-based display marketing platform that is available to both advertisers who sell products on Amazon and those who do not. Using the DSP platform’s software, buyers can purchase audio ads, display ads, and video ads to promote their products, services, or brands across the web.
Advertising through Amazon DSP differs from Amazon Sponsored Ads where you bid on specific keywords or ASINs. With the DSP, you bid on specific groups of Amazon shoppers, which are based on customers’ online shopping behavior, both on Amazon and off. Amazon DSP works in tandem with Sponsored Ads to cover the full Amazon shopper consideration funnel.
Amazon DSP has exclusive access to serve impressions on inventory from sites and apps they own and operate, including Amazon.com, IMDb.com, and Twitch.tv, to name a few. It reaches consumers across various platforms, such as desktop, mobile, over-the-top (OTT), and was built to send users to and keep users on Amazon.com.
Amazon is continuously adding new features to its DSPto better serve its growing number of users.
Top Amazon DSP Bidding Strategies
Below are Feedvisor’s top three recommended bidding strategies for Amazon advertisers to get the most bang for their buck when using Amazon DSP.
1. Balancing Amazon DSP Bids for Retargeting and Prospecting to Prioritize Important KPIs
When thinking about setting bids on the Amazon DSP for different targeting tactics, it is crucial to consider the funnel and where your customer is in the decision-making process.
Prospecting is the most upper-funnel strategy, which means ads are being served to the widest pool of potential customers. You can expect the CPM to be the lowest on this strategy and there to be less competition. Therefore, bidding does not need to be as aggressive.
With prospecting, it’s not critical to win every bid since the pool is so large, but as we move down the funnel into retargeting and conquesting tactics, you will want to increase bid aggressiveness as customers are closer to the point of purchase and the audience is smaller and more specific.
This increase in aggressiveness will ensure that you win as many of the users in your retargeting pool as possible. Consider the funnel and your KPI goals when setting bids in order to maximize the impact of Amazon advertising dollars at the lowest cost.
We recommend increasing the bid by 20% as you move down the funnel.
2. Base Bid and Max CPM Bid on Amazon DSP
Feedvisor’s DSP team has established starting points to help guide you through setting your max and base CPM bid. Let’s dive deeper into what these mean before you even begin your bidding.
Amazon defines the Base CPM bid as the ideal amount you want to pay per thousand impressions for ad inventory. This price isn’t guaranteed, but Amazon optimizes its bidding strategy to try to meet this goal. Then, the max bid is the cap you would be willing to pay for placement in the open auction. We recommend that the max bid is at least 2x higher than the base bid.
We recommend increasing the bid by 20% as you move down the funnel. According to industry data, video inventory is generally 7x more expensive than display inventory. Use the numbers below as starting points for a new Amazon campaign and line item, and then monitor and adjust accordingly as CPM data comes in.
3. Forecasting Amazon DSP Bids Based on Seasonality and Targeting Strategy
There are key drive times on Amazon where we see an influx in traffic and competition. These times include Prime Day, Black Friday, and Cyber Monday.
The outline base and max CPM bid above are for evergreen strategies. During seasonal times, when you expect competition to be at its highest, we recommend proactively adjusting the max bid by 20% in an effort to win placements over the increased competition.
About the Author
Dawn Jenks is a copywriter for Feedvisor, where she develops SEO e-commerce product descriptions and is a contributing blog writer. She was previously a travel public relations executive, and enjoys running, hiking, cooking, and reading.
Final Thoughts
Feedvisor’s Amazon DSP advertising experts operate with an agency-like model, optimizing your marketing strategy and executing based on Amazon campaign best practices, as well as current and historical data to drive performance based on your specific KPIs.
Our Amazon DSP team manages your campaigns to drive traffic to your brand store and product detail pages and to generate awareness, incremental sales, and new-to-brand customers.
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