DSP vs Sponsored Ads: Which Is Better for Your Amazon Store?

Introduction

In the dynamic world of e-commerce, Amazon is not just a marketplace—it’s a comprehensive ecosystem for selling, branding, and advertising.

As businesses aim to stand out in this competitive environment, understanding Amazon’s advertising options is crucial.

Two prominent tools at your disposal are Amazon DSP (Demand-Side Platform) and Amazon Sponsored Ads.

Although both are part of Amazon’s advertising suite, they cater to different needs and audiences. This guide dives deep into their features, benefits, and strategic applications to help you decide which tool aligns best with your goals.

Whether you’re an established brand or a new seller, mastering these advertising options can boost your Amazon sales growth and elevate your brand presence.

Understanding Amazon DSP: The Programmatic Powerhouse

Amazon DSP is a programmatic advertising solution that allows advertisers to buy display, video, and audio ads both within and beyond Amazon’s ecosystem.

It’s ideal for businesses looking to expand their reach and leverage Amazon’s vast audience data.

What is Amazon DSP?

Amazon DSP (Demand-Side Platform) is an advanced advertising tool designed for programmatic media buying.

Unlike Sponsored Ads, which focus on Amazon’s platform, DSP extends your reach to external websites, apps, and even competitors’ product pages.

Key Features of Amazon DSP

1. Expanded Reach: Ads appear on Amazon-owned properties (e.g., IMDb, Fire TV) and third-party sites and apps.
2. Advanced Targeting: Utilize behavioral, contextual, and demographic data for pinpoint targeting.
3. Multi-Format Options: Choose from display, video, audio, and Over-The-Top (OTT) video ads.
4. Cross-Channel Integration: Align campaigns across platforms for cohesive messaging.
5. Managed or Self-Service: Access DSP through Amazon’s managed services or self-service portals via an Amazon Ad Agency.

Benefits of Amazon DSP

• Precision Targeting: Leverage Amazon’s first-party data, including purchase history, to refine audience segmentation.
• Brand Awareness: Build recognition through ads that appear across the web and apps.
• Retargeting Capabilities: Re-engage customers who have interacted with your brand.
• Competitor Conquesting: Target audiences browsing competitor products.

Drawbacks of Amazon DSP

• High Entry Costs: Requires a minimum spend of $35,000, making it less accessible to smaller brands.
• Complex Management: Often needs expertise for effective campaign setup and monitoring.

Decoding Amazon Sponsored Ads: The Seller’s Staple

Amazon Sponsored Ads are pay-per-click (PPC) campaigns designed to drive visibility and sales directly within Amazon’s marketplace. They are user-friendly and accessible to sellers of all sizes.

What are Amazon Sponsored Ads?

Sponsored Ads focus on promoting products within Amazon’s ecosystem. They are ideal for driving immediate sales by appearing in highly visible placements such as search results and product detail pages.

Types of Sponsored Ads

1. Sponsored Products: Promotes individual product listings. Best for increasing sales and product visibility.
2. Sponsored Brands: Highlights your brand with a custom headline, logo, and multiple products. Ideal for showcasing your range.
3. Sponsored Display: Retargets audiences both on and off Amazon, focusing on shoppers who viewed similar products.

Benefits of Sponsored Ads

• Cost-Effective: No minimum budget required.
• Ease of Use: Simple setup through Amazon’s Advertising Console.
• Immediate Results: Boosts visibility and sales quickly.
• Scalability: Suitable for businesses of all sizes.

Drawbacks of Sponsored Ads

• Limited Reach: Ads remain within Amazon’s platform.
• Keyword Competition: High-demand keywords can increase costs.

Key Differences Between Amazon DSP and Sponsored Ads

Targeting Capabilities: DSP vs Sponsored Ads

Amazon DSP Targeting

1. Behavioral Targeting: Based on customer browsing and purchase history.
2. Contextual Targeting: Aligns ads with relevant content across the web.
3. Lifestyle Segmentation: Targets users based on their interests.
4. Retargeting: Re-engages audiences who interacted with your brand.
5. Lookalike Audiences: Expands reach to users similar to your existing customers.

Sponsored Ads Targeting

1. Keyword Targeting: Ads appear based on search terms shoppers use.
2. Product Targeting: Focuses on specific ASINs or categories.
3. Automatic Targeting: Relies on Amazon’s algorithm to select placements.
4. Brand Halo: Targets customers who show interest in your brand.

Budget Considerations: Which Option Fits Your Wallet?

Amazon DSP Budget

• Requires a higher minimum spend, typically starting at $35,000.
• Cost structure based on CPM (Cost Per Mille or thousand impressions).
• Suited for larger brands aiming for extensive campaigns.

Sponsored Ads Budget

• No minimum spend, making it accessible for all sellers.
• Operates on a PPC (Pay-Per-Click) model.
• Flexible and scalable based on campaign goals.

Performance Metrics: Measuring Success

Amazon DSP Metrics

• Impressions: Number of times your ad was shown.
• Click-Through Rate (CTR): Percentage of viewers who clicked on your ad.
• Video Completion Rate: Tracks engagement with video content.
• New-to-Brand Purchases: Measures customer acquisition.

Sponsored Ads Metrics

• ACoS (Advertising Cost of Sales): Calculates ad spend efficiency.
• Conversion Rate: Measures how many clicks lead to sales.
• Attributed Sales: Revenue generated through ads.

Combining DSP and Sponsored Ads for Maximum Impact

Using DSP and Sponsored Ads together creates a holistic advertising strategy. Here’s how to leverage both:

1. Awareness: Use DSP to introduce your brand to a broader audience.
2. Retargeting: DSP re-engages audiences off Amazon, while Sponsored Display captures interest on the platform.
3. Conversion: Sponsored Products ensure visibility where customers search.

How Eva Can Help?

Eva is a leading eCommerce technology company dedicated to helping brands achieve profitable growth across Amazon, Walmart, and other marketplaces.

Eva’s unique AI platform and expert support enable brands to streamline their advertising strategies, improve decision-making, and maximize ROI.

1. Context-Aware Advertising: Eva’s AI platform integrates critical metrics such as inventory levels, conversion rates, and profitability across multiple marketplaces, not just Amazon. This ensures your ads align with stock availability and market demand, reducing wasted spend.
2. Comprehensive Data Analysis: Our platform leverages advanced algorithms to analyze customer behavior and ad performance, providing actionable insights to optimize campaigns.
3. Cross-Marketplace Compatibility: Whether you’re advertising on Amazon, Walmart, or other platforms, Eva’s tools are designed to provide consistent and effective results.
4. Expert-Led Strategies: Eva’s team of seasoned professionals offers Amazon PPC Management, Amazon SEO Services, Amazon Listing Optimization, and Amazon Account Management to ensure your campaigns are always ahead of the competition.

As an Amazon Advanced Partner and Walmart Strategic Solution Partner, Eva collaborates with industry leaders such as TikTok, eBay, Shopify, and more.

Eva focus on sustainable growth by helping brands invest in the most effective multimedia mix for their marketing efforts.

Whether you’re launching a product, expanding your reach, or optimizing your existing campaigns, Eva’s AI-powered platform delivers measurable results.

Don’t let the complexities of Amazon DSP or Sponsored Ads slow you down. Contact Eva today to learn how our AI-driven solutions and expert services can transform your advertising strategy.

Schedule your free consultation now and start achieving unparalleled growth on Amazon and beyond!

Conclusion

Both Amazon DSP and Sponsored Ads offer unique advantages. DSP’s expansive reach and advanced targeting make it ideal for brand awareness campaigns, while Sponsored Ads provide immediate sales boosts within Amazon’s ecosystem.

For the best results, combine these tools to create a full-funnel advertising strategy that drives sustained growth.

FAQs