If you’re venturing into the world of Amazon advertising, you’ve likely come across two primary advertising tools: Amazon Demand Side Platform (DSP) and Pay Per Click (PPC) advertising. The ongoing debate among advertisers and marketers is which of these two powerhouses should be included in an effective Amazon strategy.
In this complete guide, we will conduct an in depth analysis of DSP and PPC, exploring their key features, benefits, and effectiveness in helping you achieve your advertising goals on the Amazon platform.
As we delve into an analysis of both Amazon DSP and PPC, we aim to help you make an informed decision on which to choose and ultimately optimize your ad strategy.
Table of Contents
Understanding Amazon DSP
Amazon DSP, otherwise known as Amazon Demand Side Platform, is a programmatic advertising platform that allows advertisers to buy display ads programmatically on Amazon sites and other third party sites that are part of the Amazon DSP network.
This type of advertising is perfect for brands that aim to increase their reach and target specific audiences based on their Amazon activity.
Key Benefits of Amazon DSP Advertising
Targeted Advertising
One of the major advantages of Amazon DSP is its ability to offer highly targeted advertising. Amazon DSP can leverage the vast pool of data that Amazon collects about customer behaviors, demographics, and purchase history.
This data driven approach allows you to pinpoint your most relevant audience, enhancing the efficiency of your ad campaigns.
By targeting the right customers at the right time with personalized ads, you can maximize your ad spend, increase the chances of converting browsers into buyers, and foster customer loyalty.
Extended Reach
Amazon DSP isn’t limited to just Amazon’s platform. It extends your advertising reach across a wide network of third party websites, mobile apps, and even connected TV devices.
This capability lets you tap into new potential customers who may not be actively browsing on Amazon but could still be interested in your offerings.
By pushing your ads beyond the Amazon ecosystem, DSP helps you engage potential customers across the web, amplifying your brand awareness and impact.
Advanced Targeting Options
Apart from demographic and behavioral targeting, Amazon DSP offers more advanced targeting options like retargeting and lookalike audience targeting.
Retargeting allows you to show ads to users who have already interacted with your brand or product, keeping your brand top of mind and increasing the likelihood of a purchase.
Lookalike audience targeting, on the other hand, helps you reach new users who share characteristics with your existing customers, enhancing the effectiveness of your advertising strategy by connecting with individuals most likely to be interested in your product.
Cross-Device Advertising
Amazon DSP’s cross device capabilities are another standout feature. Nowadays, consumers use multiple devices in their shopping journey, and DSP allows you to connect with potential customers, whether they’re on smartphones, tablets, or desktops.
This kind of reach ensures you engage with your audience at multiple touchpoints, fostering a seamless shopping experience. Whether they’re commuting with a smartphone or browsing at home on a desktop, your ads can increase your opportunities for conversions.
These key benefits of Amazon DSP make it a potent tool in your advertising arsenal, particularly when it comes to precision targeting, extended reach, and multi device visibility.
What’s PPC All About?
On the other hand, Amazon PPC, short for Pay-Per-Click, is a model where advertisers only pay when their ads are clicked. PPC includes Sponsored Products, Sponsored Brands, and Sponsored Display Ads. It’s an effective method for driving immediate traffic to your products and gaining visibility.
Key Benefits of Amazon PPC Advertising
Budget Control
One of the key strengths of Amazon PPC is the remarkable control it offers over your advertising budget.
Unlike some advertising models where you pay for impressions, PPC operates on a cost per click model. You are charged only when a shopper clicks on your ad, ensuring that your budget is spent on tangible interactions with potential customers.
Moreover, you can set daily budgets and adjust them at any time based on your campaign performance. This level of budget control ensures your advertising investment aligns with actual results, providing a clear view of your ROI.
Immediate Visibility
Amazon PPC is highly effective in providing instant visibility for your products. Your ads can appear at the top of search results or on product detail pages, enhancing your product’s visibility among a sea of competitors.
This immediate visibility drives traffic directly to your Amazon listings, helping to increase sales, particularly during high competition periods like product launches or seasonal shopping times.
The more visible your products are, the higher the chance of attracting clicks and potential conversions.
Keyword Visibility
Amazon PPC is also a powerful tool for gaining valuable insights into customer search behavior. It provides detailed data on which keywords customers are using to find products similar to yours on Amazon.
These insights can inform your keyword strategy, helping you optimize your product listings and ad campaigns for these high-performing keywords. As you refine your keyword strategy, your products gain improved organic visibility.
This means your listings can continue to attract and convert shoppers even outside of your paid ad campaigns, leading to a cycle of increased visibility and sales.
Ad Placement Control
Amazon PPC gives advertisers control over ad placement within Amazon’s search results. This feature lets you strategically position your products to be where they will most likely be noticed by potential buyers.
Whether it’s at the top of search results, on product detail pages, or even on competitor listings, having control over where your ad appears increases the chances of capturing customer attention, generating clicks, and ultimately driving conversions.
These key benefits make Amazon PPC valuable to an Amazon seller’s advertising strategy. It offers granular budget control, immediate visibility, valuable keyword insights, and control over ad placement, making it a powerful tool for driving traffic and sales.
Amazon DSP vs. Amazon PPC: Key Differences
When weighing up Amazon DSP against PPC, it’s crucial to understand that these two platforms, while sharing the common goal of advertising products, cater to distinct strategies and may yield different results.
| Amazon PPC | Amazon DSP | |
| Targeting | Keyword-based targeting | Advanced audience targeting based on demographics, interests, behaviors, and purchase history data |
| Ad Formats | Sponsored Products, Sponsored Brands, Sponsored Display | Display ads, video ads, custom creative formats |
| Placement | On Amazon search results and product detail pages | On and off Amazon-owned sites, extending reach to millions of potential customers |
| Reach | Targeted reach based on selected keywords | Wider reach and ability to reach specific audience segments beyond search keywords |
| Brand Awareness | Effective for driving visibility and brand exposure on Amazon platform | Allows for extensive reach and exposure beyond the Amazon ecosystem, increasing brand awareness |
| Targeting Precision | Relies on keyword relevance and bids | Advanced targeting capabilities, leveraging Amazon’s vast customer data |
| Tracking & Analytics | Detailed campaign data and metrics available | Robust reporting and analytics, providing insights into campaign performance and audience behavior |
| Optimization | Keyword optimization and bid adjustments | Algorithmic optimization based on performance data, utilizing Amazon’s data ecosystem |
| Ad Inventory | Limited to Amazon search and product pages | Expansive ad inventory across various websites and apps, offering more ad placement options |
| Audience | Captures customers actively searching for products on Amazon | Targets specific demographics, interests, behaviors, and purchase history data for precise audience targeting |
| Campaign Objectives | Primarily focused on driving sales and conversions | Offers broader campaign objectives such as brand awareness, traffic generation, and lead generation |
Reach and Audience Targeting
One of the defining features of Amazon DSP is its capability to reach a broader audience and target more specifically.
By leveraging Amazon’s massive data pool, DSP can identify and target audiences based on a myriad of factors, such as customer behavior, demographics, and purchase history. This precision targeting is valuable for building brand awareness and growing your customer base.
On the contrary, while PPC may not offer as wide a reach or specific audience targeting, it is highly effective for driving immediate traffic to your products and achieving quick results. PPC is especially potent for products with high conversion rates where the primary goal is sales generation rather than audience building.
Control Over Bidding
Amazon PPC allows you to have granular control over your bids, meaning you set your own maximum bid for each keyword.
This control can allow for precise budgeting and ad spend efficiency. However, with Amazon DSP, Amazon’s algorithms determine when and where your ads are displayed based on your set budget, target audience, and campaign objectives.
While this may seem to afford less control, it utilizes Amazon’s machine learning capabilities to optimize ad placements and increase the likelihood of reaching and engaging your target audience.
Ad Placement
One distinct difference between Amazon DSP and PPC is the range of ad placements.
Amazon PPC ads only appear on Amazon’s website and app, meaning they are primarily visible to users actively browsing on Amazon. However, Amazon DSP has a much wider range of ad placements.
DSP ads can be displayed on Amazon, third-party websites in the Amazon DSP network, Amazon-owned sites (such as IMDb), and on Amazon devices like Fire TV.
This expanded range gives DSP ads the ability to reach consumers across a variety of digital touchpoints, potentially engaging users who may not currently be shopping on Amazon but are part of your target audience.
Minimum Spending Requirement
Amazon DSP typically has a minimum spend requirement, which can be as high as $35,000, depending on your contract.
While there is a self-service option that doesn’t have this requirement, the higher cost of DSP may be a barrier for smaller businesses or those with limited ad budgets.
On the other hand, Amazon PPC does not have a minimum spending requirement, making it a more accessible option for businesses of all sizes.
Ad Formats
In terms of ad format variety, Amazon DSP offers more options than PPC. Amazon PPC provides three ad formats: Sponsored Products, Sponsored Brands, and Sponsored Display.
These ad formats are designed to showcase individual products or brands, driving traffic to your Amazon listings. In contrast, Amazon DSP provides a wider variety of ad formats, including video and audio ads, mobile interstitial ads, custom ads, and more.
Various ad formats offer diverse and engaging experiences. They enable interaction with audiences on multiple devices and in different ways.
Advertising Strategy
When comparing Amazon DSP vs. Sponsored Display, it’s clear that they cater to different advertising needs.
Sponsored Display, a component of the PPC model, works best for direct response campaigns where immediate engagement and click through are the goals. In contrast, Amazon DSP adopts a more holistic approach to advertising.
With greater control and flexibility over ad delivery, DSP is well-suited to long-term brand-building and audience engagement strategies.
Duration of Effects
Amazon PPC is widely recognized for its capacity to provide immediate visibility and short-term results.
The PPC model works like a faucet. Ads run as long as the budget allows. Once the budget is used up, the ads stop. This system controls ad visibility based on the available budget
Once the budget runs out, the visibility stops. This model can be incredibly effective when you have a new product launch or a promotional event and you want to drive immediate traffic and sales.
While PPC delivers immediate results, it has a drawback. When the campaign ends, benefits decline rapidly. Visibility and traffic decrease, making PPC effects short lived.
Conversely, Amazon DSP is known for providing more long-lasting effects. This is primarily due to the nature of DSP advertising, which focuses more on brand awareness and audience building.
DSP campaigns aim to engage users across various touchpoints, and over a longer duration, ingraining brand recognition and preference among target audiences. As such, the results of a DSP campaign can continue to bear fruit long after the campaign has ended.
This is because once a customer becomes aware of and develops a preference for your brand, they’re more likely to search for and buy your products even without seeing an active ad.
Finally, DSP’s ability to target specific audiences based on their behavior, preferences, and previous interactions with Amazon allows the platform to provide a more personalized ad experience. This targeted approach can result in better engagement, leading to higher conversion rates over the long term.
Which Should You Choose?
PPC is ideal for quick sales in short-term promotions. DSP is better for long-term brand building. It engages specific audiences over time. DSP offers targeted advertising and wide reach. Understanding goals is crucial for choosing between PPC and DSP. Knowing the benefits of each helps in decision-making.
Conclusion
No one size fits all approach works in Amazon advertising. It’s about understanding the tools at your disposal and using them to complement your unique strategy. We hope this analysis has clarified what Amazon DSP and PPC entail, and will help you navigate your choices better.
For a comprehensive advertising solution, contact us to learn how we use AI at Eva to enhance our client’s advertising strategies. Eva, by focusing on increasing traffic, conversion & profits is your only need to master Amazon land.
