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Amazon DSP vs. Sponsored Display in 2023

With the rise of innovative ad types like Amazon’s Demand-Side Platform (DSP) and Sponsored Display ads, advertising on Amazon has become an exciting experience for marketers. Navigating these options can be both thrilling and overwhelming.  

The purpose of this blog post is to give enterprise brands and agencies a strategic compass to guide them in making informed decisions on ad types that align with their profitability, market share, and incrementality goals.

What Amazon DSP and Sponsored Display Offer in 2023

Amazon DSP and Sponsored Display provide distinct advantages.  

DSP, an impression-based platform, lets advertisers buy varied ad types and reach a broad audience both on and off Amazon, with customization for impact.

On the other hand, Sponsored Display, available to direct Amazon sellers, displays ads within Amazon’s marketplace. Even if these ads appear offsite, they lead users back to your listings.

Choosing One vs. The Other – or Choosing Both

Full-Funnel Activation

When considering the marketing funnel, DSP shines for upper funnel activation due to its off-site capabilities. DSP can introduce your brand to consumers who have never interacted with it before on Amazon, driving impressions wherever they are online. This results in truly incremental sales.  

Sponsored Display tactics, however, are limited to on-site interactions, typically engaging shoppers who are already mid or lower funnel. KPIs for upper and lower funnel activations are different, and for a full funnel strategy, DSP is the key.

Performance Comparison: Sponsored Display and Amazon DSP

Key performance metrics depend on your brand’s specific goals. Typical metrics include Return on Ad Spend (ROAS) and Cost Per Acquisition (CPA). Sponsored Display ads, with their pay-per-click cost structure, may provide a lower entry point and an effective way to boost brand visibility and drive conversions on Amazon. On the other hand, DSP, with its cost per mille structure, offers a broader reach and is especially effective for brands aiming to drive awareness and capture new customers.

Integrating Cutting-Edge Tools for Maximum Impact

Using advanced advertising tools —like Pacvue’s commerce acceleration platform — can unlock key optimizations for your campaigns on Amazon DSP or Sponsored Display.

Let’s delve deeper into Pacvue and its application to a specific use case: an organic grocery brand selling on Amazon.

Rule-Based Automations: By utilizing Pacvue, you gain the ability to create customized rules for your campaign, automating numerous actions. For example, our organic grocery brand can establish rules that automatically adjust bids for high-performing keywords such as “organic cereals” or “natural granola bars.” This ensures that our ads remain competitive during periods of increased demand. As a result, e can drive more efficient CPMs and, ultimately, enhance our return on ad spend (ROAS).  

Subscribe & Save: Pacvue’s analysis of Subscribe & Save data can reveal valuable insights to increase long-term customer loyalty. For example, this grocery brand may discover that their organic cereal line is often subscribed to by customers for regular delivery. Leveraging this data, the brand can optimize their advertising campaigns to encourage more customers to subscribe and save, thus ensuring a steady recurring revenue stream.

Budget management: Pacvue’s budget management tool allows you to allocate your budget efficiently across different line items. If this grocery brand finds that their Amazon DSP campaign targeting potential new customers performs better than a Sponsored Display campaign, they can effortlessly shift more budget towards the higher-performing campaign. This enables the brand to maximize their ad spend and ROI.

Moreover, by integrating Pacvue’s AI-driven campaign management and machine learning capabilities into their advertising strategy, the organic grocery brand can further enhance their retail media optimization. For instance, it might reveal that campaigns for organic cereal perform better on Amazon than on other retailers, prompting the brand to focus more resources on Amazon.

Essentially, with the right technology, brands can significantly enhance their advertising strategy on Amazon DSP and Sponsored Display, ultimately driving more conversions and maximizing their ROAS.

Best Practices and Considerations for Enterprise Brands and Agencies

Picking the right ad campaign strategy can have a big effect on how your brand does on Amazon. Here are a few things to think about:

Choosing Your Campaign Strategy with One or Both Platforms

What your brand wants to achieve should guide your ad campaign strategy. If your brand awareness is your main goal, Amazon DSP’s large reach might be your best bet, letting you connect with potential customers both on and off Amazon. But, if your goal is to increase sales quickly, Sponsored Display’s ability to target shoppers on Amazon might give you faster results.

For a full approach, think about using both platforms. A balanced strategy might involve using DSP to raise brand awareness and draw in new customers, and then using Sponsored Display to retarget these customers and push them towards buying once they’re on Amazon.

Which Categories are Best for Sponsored Display vs. Amazon DSP?

While both platforms can help a wide range of categories, some might find one more helpful than the other based on their specific needs.

For example, niche products with a particular target audience might benefit more from Amazon DSP, which can reach potential customers off Amazon, introducing the brand to people who might not be actively looking for their products on Amazon.

On the other hand, products that are bought often, like groceries or household items, might do better with Sponsored Display. These products often have a lot of competition on Amazon, and Sponsored Display’s visibility on the site can help these brands stay in the minds of consumers.

Remember, there’s no one perfect strategy. The key is to understand what your brand wants to achieve, know who your audience is, and continually watch and adjust your strategy based on how your campaign is performing.

Pacvue Delivers the Best of DSP and Sponsored Display

Both Amazon’s DSP and Sponsored Display are vital for your advertising strategy, each offering unique strengths depending on your brand’s goals and target audience.

For an extensive approach, consider using DSP Self-Service with Pacvue. It provides advanced tools to save time and optimize your ROAS. You can view your DSP performance alongside other campaigns for a comprehensive outlook and use enhanced reporting for a detailed performance analysis. As you move forward in 2023, assess the merits of both platforms and consider the benefits of integrating Pacvue into your strategy. Don’t hesitate – your brand’s potential on Amazon’s advertising platforms awaits.


Author
Jared Koll

Awards & Recognitions