Amazon Demand Side Platform (DSP) is one of the most powerful tools available to brands looking to expand their reach beyond Amazon’s core marketplace. It allows advertisers to appeal to audiences both on Amazon and across the wider web, using data tied directly to real shopping behaviour.
For brands already investing in Amazon Sponsored Ads, DSP is often the missing layer that unlocks incremental growth, especially at the awareness and consideration stages where Sponsored Ads have limited reach. Instead of just targeting keywords or broad interests, etc., you can target audiences based on their behaviour – i.e. what they browse, what they search for, and what they buy.
If you want to know more, read on to learn how Amazon Demand Side Platform works, what it costs, and how your brand can use it to refine your advertising strategy and drive measurable growth across a range of channels.
In this guide:
- What is Amazon Demand Side Platform (DSP)?
- How Amazon DSP works
- Amazon DSP targeting capabilities
- Amazon DSP costs, pricing and ROI
- Amazon DSP strategy: How to maximise performance
- Combining Amazon DSP with Amazon Sponsored Ads
- How to get started with Amazon DSP
- Amazon DSP vs other advertising platforms
- Is Amazon DSP worth it?
- Amazon DSP FAQs
What is Amazon Demand Side Platform (DSP)?
Amazon DSP is a programmatic advertising platform that allows you to buy display, video, and streaming TV ads using Amazon’s first-party audience data. So, rather than targeting search terms, you target people via niche audience behaviours and real activity data gathered from across Amazon and its partner networks, including product views, purchase history, and browsing behaviour.
In programmatic terms, DSP operates within demand-side platforms that automate ad buying across multiple sites and apps. Amazon’s version, however, is built around its own data, which gives it a different starting point compared to platforms that rely on cookies or inferred signals. This is very useful, as modern consumers are getting increasingly wary of the data-gathering aspect of digital advertising strategies. As more consumers reject cookies and learn to bypass third-party data gathering, DSP’s first-party data-based strategy is very useful.
The key difference is that Amazon DSP focuses on audience behaviour rather than real-time intent. While Sponsored Ads capture demand when users are actively searching, DSP allows brands to influence demand earlier in the customer journey. This makes it very useful for brands that want deeper influence over actual purchase decisions rather than just boosting traffic to their product pages.
How Amazon DSP works (step-by-step)
Inventory and ad placements
Amazon DSP gives access to two types of inventory:
1) Amazon-owned placements. This includes display and video ads across Amazon’s own properties, including product pages, Fire TV, Prime Video, IMDb, and other owned environments.
2) Third-party inventory. Amazon DSP extends into a large network of external websites and apps. This allows brands to reach users outside Amazon while still leveraging Amazon’s audience data.
This combination helps campaigns to reach users both before and after they engage with products on Amazon. This is crucial for getting attention at all stages of the purchase funnel, and for creating a consistent brand experience across multiple channels.
Buying models
Amazon DSP operates on two access models.
1) Self-service gives advertisers direct control over campaign setup, targeting, and optimisation. This is typically used by brands or agencies with experience in programmatic buying.
2) Managed service involves Amazon running campaigns on your behalf. This usually requires a higher minimum spend and is often used by larger brands.
Which model is best for you will depend on your internal capability. Brands with in-house expertise and sophisticated campaign reporting tools tend to use self-service, while those without in-house digital advertising and media buying expertise can benefit more from managed service.
Auction and delivery
DSP campaigns run through real-time bidding, which works like this:
When a user visits a page within the available inventory, Amazon evaluates whether or not they match your targeting criteria. If they do, your campaign enters an Amazon Ads auction against other advertisers targeting the same audience.
If your campaign wins, Amazon will serve the ad over the DSP network. Over time, the algorithm will optimise ad delivery based on performance signals like click-through rate, conversion rate, cost-efficiency, and so on.
Unlike keyword-based campaigns, Amazon DSP ads optimisation is tied to audience performance rather than search queries or more abstract SEO-related metrics.
Amazon DSP targeting capabilities
Targeting is the core strength of Amazon DSP. Its audience-targeting capabilities enable your digital ads to reach users based on detailed behavioural metrics. This includes in-market audiences who have recently shown an interest in your products, as well as broader lifestyle and browsing behaviours across the wider web.
Retargeting with DSP typically focuses on users who have already interacted with your products. This includes product page views, add-to-cart actions, and past purchases, among other behaviours.
Contextual targeting places ads based on the content of the page rather than on user behaviour. This is very useful when audience signals are limited or hard to interpret, or when the context of ad placement is critical to brand alignment.
Lookalike audiences can expand your brand reach by targeting users with behaviour patterns similar to those of your existing customers. For example, if the data shows that your highest-value customer segment enjoys a particular Prime TV show, lookalike targeting will roll out your ads to other audiences who enjoy that show, in the hope of finding like-minded consumers.
You can also combine these options, allowing you to narrow and refine, or expand and extend, your reach depending on your campaign objectives.
Amazon DSP costs, pricing and ROI
Amazon DSP operates on a cost-per-thousand impressions (CPM) model. So, your total ad spend is based on exposure rather than on clicks. Costs vary depending on factors such as audience competitiveness, ad placement type, and targeting precision. For example, highly specific audiences tend to carry higher CPMs, while broader targeting reduces cost but may also lower the accuracy and efficiency of your reach.
Managed service campaigns typically have minimum spend requirements, which can be as much as five figures per month. Self-service options are a bit more flexible in budgetary terms, but you will still have to spend a reasonable amount in order to generate useful data.
As for ROI, DSP return on investment is measured differently from that of PPC Sponsored Ads. DSP campaigns tend to focus on earlier funnel stages than Sponsored Ads, so performance is tracked using a mix of metrics, including reach, frequency, view-through conversions, assisted sales, and more. As a general rule, it is a good idea to track performance metrics across the full funnel to get the most accurate results and insights from your DSP campaigns.
Amazon DSP strategy: How to maximise performance
Full funnel framework
As we mentioned above, it’s a good idea to map DSP metrics across the full funnel rather than focusing too heavily on certain areas. Come up with a strategy for each stage that uses different messaging and targeting, rather than running a single campaign for all users.
At the awareness stage, DSP campaigns often work well when they focus on reaching new audiences using broad targeting and video or display formats.
At the consideration stage, intensify and refine your targeting focus using data on in-market audiences or users who have viewed similar products.
At the conversion stage, retargeting is crucial. Send out ads focusing on users who have already engaged but have not yet purchased.
Audience layering strategy
The strongest DSP campaigns combine multiple targeting signals. For example, you might target users who are in-market for a category and have also viewed competitor products. This reduces wasted impressions and improves relevance.
At the same time, layering audiences – i.e., combining multiple audience segments – allows you to move away from broad targeting and focus your budget on the users most likely to convert.
Budget allocation and scaling
Rather than pouring huge budgets into campaigns from the get-go, it’s a good idea to start relatively small and scale your campaign budgets based on performance signals. That way, you won’t waste money on tactics that don’t work, and can target your funds where they’re likely to have the most impact based on solid campaign performance data.
Ideally, your early campaigns should focus on testing audiences and creative. Once performance stabilises, you can increase the budget based on segments that show consistent results.
Creative best practices
Creative has a direct impact on DSP performance. For example, display ads need to be clear and product-focused, with strong visuals and minimal text, to grab attention and drive viewers into your funnel. Video ads should communicate the core message quickly, as you’re unlikely to have much time to make an impression on fast-scrolling viewers.
Remember, consistency between ad creative and product detail pages will also improve conversion rates and keep your brand experience coherent for consumers.
Combining DSP with Amazon Advertising Console
DSP can work very well alongside Sponsored Ads if you’re playing to both their individual strengths and combining them in the right way.
For example, DSP can create demand earlier in the customer journey, while Sponsored Products and Sponsored Brands reinforce that demand as in-market users make relevant searches. Running these campaigns together allows you to comprehensively cover more of the customer journey, from discovery right through to purchase and beyond.
How to get started with Amazon DSP
So, how can you get started with Amazon DSP?
Access requirements
Access to DSP depends a lot on your budget and account structure.
Larger brands can access managed services directly through Amazon. Self-service access is available through agencies or approved partners. However, brands with little experience in programmatic advertising may benefit from agency support to get them up and running.
Setting up your first campaign
When you create campaigns, start by defining your strategic objectives. What do you want your campaign to achieve? Who do you want to see your campaigns? What actions would you like those people to take as a result of your campaigns? How will you track and measure results?
Having established these objectives, it’s time to select audiences, design creatives, set budgets, and choose placements. Then, you’ll upload your creative assets and configure your tracking settings to measure your campaign performance.
As a tip, try to focus on a limited number of audiences in your early campaigns. This will make performance analysis a lot clearer and help you to refine and improve your campaigns moving forward.
Common mistakes to avoid
There are several mistakes brands make when using DSP. Here are some of the most common issues to avoid:
- Targeting too broadly. This can ‘dilute’ the efficiency of your campaigns.
- Ignoring the full funnel and focusing only on conversion-stage audiences.
- Not putting enough strategic time and effort into ad creatives. One common mistake here is to reuse assets from other channels without any adjustment to the particular channel, audience, or objectives this particular campaign requires.
- Not properly aligning DSP with your wider Amazon activity. This can severely limit the overall impact of your campaigns.
Amazon DSP vs other advertising options
Compared to Sponsored Ads, DSP operates both on and off Amazon. Sponsored Ads focus on capturing demand, while DSP builds and influences it earlier in the journey.
Compared to platforms like The Trade Desk, Amazon DSP benefits from direct access to retail data rather than relying on third-party signals.
Compared to Google Display and Video 360, Amazon DSP offers stronger purchase-based targeting, while Google provides broader reach across the web.
Each platform has strengths, but Amazon DSP stands out for brands that want to connect advertising directly to purchase behaviour.
Is Amazon DSP worth it?
Amazon DSP isn’t right for every brand, but it can be highly effective in the right context. In general, it works best for brands that already have a presence on Amazon and that have enough budget to test and optimise campaigns properly.
Amazon DSP is most effective for brands that:
- Already generate consistent sales through Sponsored Ads
- Have strong product detail pages and conversion rates
- Can support sustained investment to test and optimise
For these brands, DSP provides a way to reach audiences earlier, reinforce brand visibility, and drive incremental sales beyond what Sponsored Ads can achieve alone.
For smaller brands with limited budgets, however, the cost and complexity may outweigh the benefits.
Amazon DSP FAQs
What is Amazon DSP used for?
Amazon DSP is used to run display and video advertising campaigns that target audiences based on shopping behaviour, both on Amazon and across external sites.
How much does Amazon DSP cost?
Costs vary by targeting and placement, but campaigns typically run on a CPM basis and often require significant monthly budgets, particularly for managed services.
Can small businesses use Amazon DSP?
DSP access is possible for smaller brands, but it is less common. Smaller businesses often rely on agencies or focus on Sponsored Ads before moving into DSP.
Ready to speak to an expert about Amazon DSP?
Fluid Marketplaces is an Amazon growth agency that is experienced in running DSP campaigns on behalf of brands. We are happy to speak informally about how it could benefit your ecommerce company. Contact us here to arrange a discussion.
