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How Much Does Amazon Demand Side Platform (DSP) Cost: Is It Worth It?

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How Much Does Amazon Demand Side Platform (DSP) Cost: Is It Worth It

Sellers and advertisers alike understand that Amazon seeks to become a platform that offers everything. While Amazon could rule the roost with its online marketplace alone, expanding into Amazon Demand Side Platform (DSP) allows for far greater brand expansion and provides a valuable service to Amazon sellers. 

This marketing option is highly valuable, with the ability to attain wide reach thanks to automatic and targeted marketing campaigns. Amazon DSP gives you as much or as little control over campaigns as you want, using your ad spend to achieve optimal reach and conversion results for your Amazon-listed products.

But is it worth it? Looking at this new advertising model on Amazon, many sellers find themselves wondering just how much Amazon DSP costs and whether the upfront expense is worth the investment. Today, we’re diving into the estimated costs of an Amazon DSP automated campaign, the value it offers, and how to determine if it is worth it for your business.

Key takeaways

  • Amazon DSP gives you the ability to target your desired audience with ads based on advanced targeting factors, such as behavioral, contextual, and lifestyle.
  • There are two account management types with DSP; managed-service (working with an Amazon consultant) and self-service (handling the account yourself).
  • Amazon DSP comes with an upfront cost and charges based on impressions rather than clicks.
  • DSP works best if you know your audience, can create quality marketing media, understand how to optimize your endpoints, and focus on the 14-day analytics the tool provides to drive results.

What is Amazon DSP?

Amazon DSP stands for Amazon Demand-Side Platform. It expands on Amazon Advertising’s original functionality to offer targeted marketing both on and off the Amazon platform. You have the capability of purchasing display, video, and audio advertisement slots and can choose your market targeting factors, which are highly sophisticated, using Amazon’s extensive audience analysis technology.

Using Amazon DSP - A hand holding a magnifying glass over online product advertisements

What should I know about Amazon DSP?

When you sign up for the Amazon Demand-Side Platform, you will have the choice between two account management types. The first method is managed-service DSP, where your campaign is managed by an advertising pro. The second is self-service DSP, where the client manages their own campaign settings.

  1. Managed-Service DSP: This allows you to work with an Amazon advertising consultant who can help you optimize your campaign settings to meet your specific goals. You will work together with your consultant, or you can choose to fully take your hands off the wheel and request specific results.
  2. Self-Service DSP: This allows you to take full control of your campaign. In fact, you can tweak every setting from in-market to retargeting audiences. This option is best for sellers or their marketing agency representatives who are already experts in marketing.
Amazon DSP strategies - A group of online business owners using online strategies to target customers

Sophisticated targeting options

One of the advantages of marketing through Amazon DSP is the advanced targeting options. These will improve the overall impact of your advertisements and where they appear, given the campaign settings.

  • Behavioral targeting: Media appears for audiences that take specific actions or engage in predictable and desirable behaviors.
  • Contextual targeting: Media appears based on immediate circumstances such as the audience’s location, what they have recently searched for, and products they are considering.
  • Lifestyle targeting: Lifestyle markets target interest groups like sports fans, gardening enthusiasts, or yarn crafters, just to name a few.
  • Remarketing: Remarketing targets viewers who have already considered or purchased your products in the past.
  • Audience lookalike: Audience lookalike marketing shows your media to people who match your data., By taking past users who have purchased, viewed, and added your products to their shopping carts, you can get Amazon to find users who share the same interests, lifestyles, and behaviors as your data.

Off-site marketing

Amazon has also cultivated a vast marketing network that goes far beyond its on-site marketing opportunities. Amazon DSP will automatically present your content across their advertising network. Based on your targeting information, your products and chosen media ads will be shown to anyone within that network whose buyer qualities match your settings.

Integral marketing analytics

You will also enjoy access to built-in analytics available through the DSP that will help you determine the success of your campaigns and hone your settings.

How much does Amazon DSP actually cost?

Amazon DSP has a lot to offer, but it comes at an upfront cost. By understanding where your money goes and what those upfront costs are, we’ll get a better idea if it’s worth the investment. 

Cost per thousand: impression-based charges

Unlike most Amazon Advertising, DSP charges per impression (PPI), not pay-per-click (PPC). It uses the “Cost Per Thousand” model for billing, calculating costs per thousand times your content is targeted and shown to a potential lead. In addition to this pricing structure, there are also two models associated with the cost of DSP:

Amazon-managed DSP baseline cost

The managed-service DSP model requires a minimum spend of $35,000-$50,000 to get started. This is not limited to a specific interval of service but serves as the fund from which your initial campaign will be run. The price gives your advertising consultant flexibility in choosing how they recommend your ad media and products are run and allows for a campaign timeline before you decide to re-invest or try something else.

Self-service DSP baseline cost

The self-service DSP model also allows for more variable investment as you will be making more fine-tuned decisions about how to allot your marketing spend. However, you have to run DSP on Amazon through a partner like Trellis. We will distribute the upfront cost across a set of advertisers reducing the initial expense required for you to get involved.

Maximizing Amazon DSP - A group of businesswomen managing their online advertisements and campaigns

Is Amazon DSP worth it?

Some sellers have already reaped significant benefits from using the intuitive and finely targeted Amazon DSP advertising services. However, whether the cost of an automated campaign is worth the steep investment depends on the scale of your marketing budget and, of course, the effective potential of your settings and media for impacting a responsive audience.

In other words, it only works if you make it work. DSP has potential for efficient impact, but only if you know exactly what you are doing when setting up the service.

How to get the most out of Amazon DSP?

As you may have guessed, the best way to ensure that your investment in Amazon DSP is worth it is to optimize your campaign. The better targeted and the better quality of your advertising through DSP, the more valuable results you will achieve.

1. Know your audience

Amazon DSP offers detailed targeting options to help you reach your ideal audience. It’s important to approach DSP with an already clear view of who you are targeting and why. Do your market research, and consider a few PPC campaigns through other platforms and services to fine-tune your targeting before investing in a DSP campaign.

2. Create high-quality marketing media

Bring your A-game in terms of marketing content. DSP allows you to market using your product listings, display ads, video ads, and audio ads. Use your highest-quality marketing materials to have the greatest impact using this platform. Consider crafting all-new media in order to meet the full potential of this automated targeting platform.

3. Optimize for your endpoints

Ensure you optimize your media assets for where they will be appearing. OTT ads through smart TVs, for example, must look superb on large and high-resolution screens. Audio marketing must have great sound quality to better integrate with the music/podcast audio platforms that will be reached. 

4. Use analytics to hone results

Lastly, always hone your campaign settings for better results. With DSP’s cost, you want to make sure you’re spending every dollar wisely. Watch your metrics and tweak your settings for better results as soon as the numbers are in.

 Investing in Amazon DSP - Group of business owners analyzing business graphs

Amazon DSP metrics to consider

Amazon DSP offers a range of 14-day metrics to help you fine-tune your campaigns. However, the final attribution of conversion is based on last-click, not first-click, so it can be difficult to track whether full conversions come from DSP marketing. You can use third-party analytics tools to gain greater insights as needed. 

So, which metrics should you pay attention to based on the customer journey model? The following points can help you target your campaigns by watching the right numbers.

  • Awareness
    • Impressions
    • Reach
    • Click-Through Rates
  • Consideration
    • Branded Searches
    • Video Completion Rates
    • Detail Page View Interaction
    • Cost-Per Detail Page View
    • Product Review Page Views
    • Add-to-List Metrics
    • Add-to-Cart Metrics
  • Decision
    • Conversion Rates
    • Growing Customer Base

How do I get started with Amazon DSP?

If you’re considering Amazon Demand-Side Platform for your next big marketing campaign, this can be a rewarding investment if you’re ready to take the plunge. At Trellis, we can help you hit the ground running with Amazon DSP, from your initial campaign asset assessment to fine-tuning your automation settings. Contact us today to explore the possibilities of wide-reach automated marketing using Amazon’s latest advertising technology.

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