Digital advertising infographic.

The Evolving Similarities and Differences Between Amazon DSP and Sponsored Display

Ryan Faist

Ryan Faist, Channel Key

June 2, 2022

This blog was updated on March 15, 2024.

As an Amazon seller, reaching your audiences at scale wherever they are is the key to growth. Two of the most powerful tools to target shoppers on and off Amazon include Amazon DSP and Sponsored Display. Both ad solutions enable you to reach shoppers outside of Amazon’s marketplace and drive external traffic to your products, and are available to brands whether or not they sell on Amazon. However, there is often confusion about the distinction between Amazon DSP and Sponsored Display. In this blog, we’ll discuss the similarities and differences of both ad types, the changing dynamics between the two, and how they can complement each other.

What is Amazon DSP (Demand-Side-Platform)?A computer screen showing Amazon DSP.

Amazon DSP is software that provides automated, centralized media buying from many sources. In other words, Amazon DSP enables sellers to programmatically buy display and video ads that appear all over the internet. Brands can reach Amazon audiences across devices and formats, use traffic quality and brand safety tools, and measure success through retail insights and performance reporting. Other valuable benefits include the following:

  • Use Amazon’s first-party insights based on billions of observed shopping patterns across the customer journey
  • Leverage both Amazon’s audiences and your own audiences with pixels, a data management platform (DMP), hashed audiences, or 3rd party integrators
  • Access key metrics such as add-to-cart rate, total purchases, and product units sold for brands that sell in Amazon’s store, as well as pixel conversion rate and video completion rate for brands that do not sell on Amazon
  • Access comprehensive and unique inventory from Amazon owned-and-operated third-party exchanges, Amazon Publisher Services (APS), and private marketplaces to reach customers whenever and wherever they shop or consume content

What are Sponsored Display ads?

A computer screen showing Amazon Sponsored Display advertising circled.

Sponsored Display is a self-service ad solution that helps businesses reach audiences at scale. Launched in 2019, Sponsored Display helps you increase your product awareness across the web by reaching targeted customers. In a few clicks, you can launch campaigns that promote your catalog with creatives that are auto-generated and auto-optimized. Sponsored Display advertising helps brands achieve the following objectives:

  • Activate Amazon’s Exclusive Inventory
    Meet customers as they stream, shop, browse, or game by being present across a wide array of channels like product detail pages, owned and operated sites like Twitch and IMDb, and third-party destinations.

  • Engage the Right Audiences in the Most relevant Contexts
    Activate audiences built from shopping and streaming signals and leverage multi-format, dynamically-optimized creatives to convey the right message.

  • Drive New Demand for Your Business
    Drive conversions, page visits, or reach if you sell in the Amazon store. If you don’t sell in the Amazon store, drive visits to your website, or boost visibility of your business.

Key Differences Between Amazon DSP and Sponsored Display

Amazon DSP and Sponsored Display both enable advertisers to reach a wide audience on and off Amazon. But there are important distinctions between the two ad solutions. Below are the six main differences between Amazon DSP and Sponsored Display:

  • Cost of Entry: Amazon DSP requires a much steeper investment than Sponsored Display. Brands can launch a Sponsored Display campaign for as little as $1. Amazon keeps this barrier to entry low because Sponsored Display ads only direct traffic to Amazon’s platform. DSP campaigns can drive traffic to external websites. For this reason, Amazon typically requires a minimum ad spend of between $35,000 to $50,000 to get started with DSP.
  • Creative Control: Amazon DSP ads can be fully customized, including headline, brand logo, and custom designed image. Sponsored Display ads automatically generate display ad creative. Until recently, this ad type didn’t offer any customization options. Today, advertisers can choose between a headline and a logo or a custom image.
  • Targeting: Amazon DSP provides more powerful audience targeting. Sponsored Display limits your options to product targeting, views remarketing, audience interests, and purchase remarketing. Amazon DSP enables brands to build custom audiences and segments using information collected from your customers.
  • Reporting: The analytics available in Amazon DSP are more robust than Sponsored Display. They include retail insights to compare activity on Amazon before, during, and after your campaigns. You can measure your campaign’s impact on how customers discover, research, and purchase your products. DSP also unlocks access to Amazon Marketing Cloud, which provides more holistic data. Third-party reporting solutions such as brand lift and off-line sales impact are also available for DSP.
  • Goals: Most brands use Amazon DSP to generate brand awareness and Sponsored Display to drive conversions.

How Sponsored Display is Changing

Amazon DSP is a more costly and advanced advertising solution than Sponsored Display. For this reason, brands almost always begin with Sponsored Display and then eventually work their way up to DSP. However, Amazon has been adding DSP-like features to Sponsored Display over the years, including the following:

  • New Bidding Options
    Sponsored Display has expanded bidding options for brand owners. You can now optimize bidding for specific needs with the following options: “Optimize for Page Visits,” “Optimize for conversions,” or “Optimize for viewable impressions.” Unlike CPC (cost-per-click), the latter uses vCPM (cost per thousand viewable impressions) billing. This means you are charged by how often your ad is shown instead of how many times shoppers click on it.
  • New Targeting Options
    Amazon has expanded targeting options for creating audiences within Sponsored Display campaigns. Brands can now select audiences similar to how you would describe your brand’s core customer. For example, if you manufacture outdoor clothing, you can create an audience based on descriptions like “Outdoor Enthusiasts” or “Hiking Enthusiasts.” You can then connect the language used in your overall marketing strategy to your Sponsored Display campaigns. You can also mix and match Amazon audience segments with custom-built views remarketing audiences.

    In addition, Sponsored Display also offers contextual targeting, enabling brands to reach more of their audiences at more points in their shopping and entertainment journey. The contextual targeting strategy allows advertisers to reach audiences both in the Amazon store and outside the Amazon store when customers view content related to targeting strategies. Advertisers do not need to change their targeted products or categories to enable the new feature. Sponsored Display will find the right opportunities to expand advertiser reach beyond the store, to web pages and mobile apps.

  • New Data Points
    Amazon has been improving the reporting tools available in Sponsored Display. Brands now have access to the Detail Page View Rate. This is the number of detail pages visited related to the number of impressions, expressed as a percentage. Channel Key predicts that most of the reporting metrics in Amazon DSP will eventually be available in Sponsored Display.

Channel Key Takeaway

There is no denying that Amazon is the most powerful and competitive ecommerce marketplace in the U.S. Gone are the “if you build it, they will come” days when you could list a few SKUs and start generating sales. Brands that are serious about competing on Amazon need a robust advertising strategy. It is essential to reach shoppers not only when they are browsing on the Amazon marketplace, but also when they are engaging in other online activities. Amazon DSP and Sponsored Display help brands do exactly that – albeit in different, yet compatible ways. Sponsored Display is a great way to test the waters of reaching audiences outside of Amazon. Not only is this ad type more affordable, but it can help you identify which products are ideal candidates for the more costly DSP ad solution. When used together, Amazon DSP and Sponsored Display can expand the impact of your advertising and take your brand to the next level.

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