Amazon is quickly becoming the number one advertising platform. Outpacing Google, a study showed 40% of advertisers say they used Amazon’s Advertising Platforms in 2018. Coupled with Amazon’s amazing collection of data, the trend shows that Amazon’s marketing dominance is soon inevitable. However, this development is so far tied mainly to the use of Sponsored Advertising, where some marketers say they are moving up to 60% of their search budgets from Google to Amazon. Amazon’s Demand Side Platform (DSP), its programmatic offering, was therefore still relatively underused in 2018. This is in stark contrast with the potential it possesses, especially in the area of link-out campaigns. In this article, you will find answers to these and other questions:
What is programmatic advertising
There are two types of methods for media buying in display advertising. In direct selling, the advertiser chooses the ad servers where the advertisements are to be shown and negotiates a price for the impressions directly. These ads are shown to all visitors at the publisher’s website. The second type of media buying is called programmatic advertising. Amazon’s DSP, as well as all other DSPs, use this type of ad buying. In place of working straight with the publisher, an algorithm chooses where the ads are shown and for which price. The numerous advantages of programmatic marketing include more precise targeting opportunities, lower operational expenses, increased reach and real-time granular performance reporting. However, ad fraud, brand safety and transparency in reporting are ongoing concerns in the programmatic environment.
What is Amazon DSP
Amazon DSP is a demand side platform that allows advertisers to buy ads with expansive reach, cross-device user attribution and extremely precise targeting. With the DSP, advertisers can buy ads from Amazon’s own inventory of websites (e.g. amazon.com, imdb.com, etc.) plus hundreds of premium third-party publishers in the most important regions that feature ads on websites such as spiegel.de for Germany, guardian.co.uk for the UK, or politico.com for the US. The publishers are checked against Amazon’s strict safety policies so that brands are always safeguarded. The impressions and clicks are free of ad fraud (such as bots viewing your ads) – Amazon checks each incoming bid for authenticity.
The available media types comprise display ads and video ads while campaign performance reporting is transparent, thorough and takes place in real time. Advertisers are billed on the basis of impressions (CPM – cost per a thousand impressions) rather than clicks, which is generally more cost effective than CPC (cost per click) in the programmatic environment. This is mainly due to the fact that these campaigns focus on reach and not on interaction.
The online giant has been cataloguing the behavior of its shoppers for decades, making it the leader in targeting optimization. By utilizing Amazon DSP, brands can now tap into this source. With In-market segments, advertisers can target users who are very close to making a purchase in specific shopping (sub-)categories between the last 7 to 30 days, whereas with Lifestyle segments, it is possible to target shoppers who have shown search, browsing and purchase behaviors for up to a year in the past. Depending on the category, one can target for instance home-decor enthusiasts or Marvel superhero fans.
In addition to that, you can also make use of tracking pixels to create new audiences or use your existing customer base to generate lookalike segments.
Note: Lookalikes are Amazon users who possess the same purchasing behavior as your customers.
You can also exclude users who have already bought from you and are unlikely to convert again. Furthermore, it is possible to connect other data management platforms to the DSP and benefit from 3rd party data in this way. With all these targeting options, Amazon is steadily taking over as a comprehensive advertising platform. You don’t have to rely on just demographic data and isolated data management solutions anymore.
What is link out and how you can benefit
If the targeting options and reach potential are not enough to convince you to give Amazon DSP a shot (though they really should), then consider what you can achieve with it. The DSP is regularly used for retargeting consumers who have visited an Amazon product detail page with the goal of converting them, which can very positively reflect in ROAS of your product portfolio on Amazon. However, one of the great advantages of the Amazon platform lies in its flexibility. Unlike Sponsored Products and Sponsored Brands, the DSP does not circumscribe you to the Amazon ecosystem. This means that your ads can link out to websites that feature products and services not sold on Amazon. The range of possibilities is vast – you can direct the audiences to landing pages, brand stores or any other websites on a domain of your choosing, all the while exploiting the treasure trove of Amazon data.
The precision attainable with Amazon DSP emerges clearly when compared to other channels such as Google or Facebook. Across regions and depending on the category, it is possible to achieve 2-4x higher CTR with Amazon than with Google.
Link out CTRs
For a brand operating in the category sports
Example use cases
Below you can see three possible use cases for linking out of Amazon with Amazon DSP:
|brand sells products outside of Amazon categories||grow e-shop sales||e-shop website / price comparison tool||demand for your product grows|
|brand sells on Amazon||improve brand awareness||website / LP||traffic and reach increases|
|brand sells on Amazon, product creates a new category||communicate the USP of the new product||website / LP||consumers get familiar with what makes your product unique|
Brand selling a product in a category not sold on Amazon who owns an e-commerce store: Amazon doesn’t see these shops as competition, instead strives for good brand relationships that are essential for its success. If the brand’s goal is to grow sales in their own e-shop, creating custom display or video ads with a link out campaign to the shop can grow the turnover radically. Brands without a shop can in turn link out to price comparison websites or similar tools. (Note: The advertiser needs to check with Amazon whether these ads can be shown on Amazon-owned inventory)
Brand sells on Amazon, has low brand awareness: If the advertiser’s current goal is to grow brand awareness, linking out to their products’ landing pages or branded website is an option to deliver concrete results. A brand website can present brand core values in a way Amazon’s product detail pages cannot. Traffic and reach increases while the brand’s market position solidifies. (Note: Amazon’s 1st party data is available for this type of campaign, whereas retargeting segments are not. Ads for this type of campaign might not be shown on Amazon-owned inventory)
Brand sells on Amazon, launches a new product: When a product is so unique it creates its own category, consumers need to first understand it. Advertising through the DSP with a custom banner or video can convey the product’s USPs better simply because it offers more real estate. However, by linking out to a dedicated product landing page, the audience is given the knowledge they need to make an informed decision. (Note: Amazon’s 1st party data is available for this type of campaign, whereas retargeting segments are not. Ads for this type of campaign might not be shown on Amazon-owned inventory)
Advertisers have already begun shifting budgets from other ad buying platforms across the board as they discover the potential of Amazon Advertising and the DSP. Even perceivably little state-of-the-art improvements Amazon offers, such as cross-device attribution, can have a massive impact and save you multiples of your advertising budget. Since Amazon DSP allows for linking out of the Amazon universe with as much as a fourfold increase in CTR, now is the time to join them and make use of Amazon’s data even if your brand doesn’t sell on Amazon.
Not sure if your company could benefit from Amazon’s DSP? Have a chat with our experts to help you decide!