Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
What is Amazon DSP? Amazon Demand Side Platform explained
103 Plays2 months ago
Amazon’s Demand Side Platform (DSP) is the secret weapon to scaling profitably on Amazon.
I’ve seen it firsthand with 12X ROAS for my own brand. It allows you to programmatically purchase ads and connect your brand with shoppers where they spend the most time—on and off Amazon. Sam Lee has helped 300+ brands run profitable DSP campaigns at scale. In this episode, we’re answering your top DSP questions, including: What Amazon DSP is and how it works What makes a brand ready for DSP What you need to optimize before getting started How our client achieved a 9x ROAS + 50 Subscribe & Save signups in 2 weeks
Do you need help scaling your Amazon brand? Get a FREE account audit by my team to see how we can help: https://hubs.la/Q02ZKcfB0
Recommended
Transcript
Achieving High ROAS with Amazon Advertising
00:00:00
Speaker
Welcome back to the Amazon Blueprint Podcast.
00:00:05
Speaker
I've recently stumbled upon an Amazon advertising strategy that has got me 122x return on ad spend. Every time he says this number goes up and it's harder and harder for me to live up to it. It's actually 1,222x return.
Deep Dive into Amazon DSP
00:00:20
Speaker
Just kidding guys. What I'm talking about today is Amazon DSP. It's a strategy that Sam and I have been using with our brands and it actually gives us really good returns. Now it's a completely different funnel approach. and now This is used by a lot of the very big brands and there is a reason behind that. So what is Amazon DSP, who it's good for, who it's not good for and how you can use it to significantly grow your sales on Amazon. Sam, let's get right into it, dude. What is Amazon DSP? So there are two Amazon DSPs in classic Amazon fashion, the exact same acronyms used for two very different things. The one that we're talking about is Amazon's demand side platform, not to be confused with Amazon delivery service providers.
00:00:55
Speaker
So Amazon's demand side platform is the programmatic marketing tool. It's kind of the other side of the coin counter to Amazon PPC. It's audience focused. I've used Amazon DSP across over 300 brands over the past four years.
Advanced Targeting with Amazon DSP
00:01:08
Speaker
And it's still in my eyes, one of the most underutilized levers on Amazon. Essentially we can utilize any ASIN on Amazon to create audiences that we can then serve display on and off Amazon. We can use it for video targeting.
00:01:21
Speaker
and it's an incredibly efficient advertising strategy to use once you're running PPC effectively. Yeah, and what I love about it is different from PPC. You can actually build audiences based on people who viewed products and people who purchased products. So I can literally go and find elementees, like the people who viewed their product but haven't purchased them and haven't viewed my product and then bring them over, start showing them ads in like a sponsored display fashion. I love that it's on and off Amazon. With that being said, I think off of Amazon, Rarely works, but in general it has a lot of capability. It also has streaming TV capability You can also stream on twitch. So it has a lot of cool stuff. So who is Amazon DSP good for? So Amazon DSP is a lot of use cases and we could talk about this all day ultimately the main benefit in Amazon DSP like you alluded to is the ability to create audiences based on any product on Amazon and So ultimately, it can be a competitor, it can be your own products, it can be a complimentary product. At the end of the day, we'll talk mostly today about brands they're selling on Amazon. There is a use case for brands that don't sell on Amazon, even brands that aren't e-commerce. They can tap into Amazon's first party data.
00:02:27
Speaker
But if you're selling on Amazon, predominantly the things that I look for are brands that have at least one product with 100 plus reviews and brands that are spending adequately on PPC. There's no particular metric. It depends. But I would say usually 10 to 20,000 at least. And then we launched Amazon DSP at about 20 to 25 percent of PPC spent. Yeah, yeah I agree. And I think we have about 40 brands right now running on DSP. And the common thing that all of them have is that they have a good Amazon PPC strategy. They're actually generating sales. We don't want to use Amazon DSP before PPC because exactly PPC is very warm traffic. It's people who are searching for a product, they're clicking and they're buying. They're in a buying mode versus Amazon DSP. Yes, you are on Amazon and you're shopping, but you're generally shopping for other things and we're following you around. So start with Amazon PPC for sure, but once you get to a point where your PPC is converting, I think DSP is an incredible addition. Now, who is Amazon DSP not good for? So Amazon DSP is not good for brand new brands to Amazon. but If you've just launched and you're still getting ramped up, I mean, at the end of the day,
00:03:29
Speaker
You layer it on after PPC in the same way that you want to make sure product detail pages are optimized before you put too much money behind PPC. You want to make sure your PPC traffic's optimized before you put money behind DSP. So I'd say brand new brands, it's not good for them. I would say that you need to come up with a custom targeting strategy because it's definitely not a one size fits all type of product. So I'd say review counts big, overall revenue is important. I again don't have a super hard metric for that, but usually you want to be doing around $20,000 a month on Amazon.
00:03:59
Speaker
before it makes sense to roll it out. The thing with price in Amazon DSP is that price doesn't necessarily dictate whether it's a good fit for you or not. It just dictates your targeting
Strategic Use of DSP for Retargeting
00:04:09
Speaker
strategy. So as an example, if you have a really expensive product, it takes people a couple impressions or you know sometimes north of 10 before you purchase. So in those instances, retargeting makes a bunch of sense.
00:04:21
Speaker
If you have an eight dollar product, people typically want it or they don't. So retargeting doesn't make a ton of sense. But in those instances, you can target competitor pages. You target contextually. You target people that maybe previously purchased a competitor's product that's not as good as yours and they might want to replace it because it's cheap. It's just price doesn't dictate whether it's a fit. It just dictates the way that you target. Solid. All right. Let's get right into the strategy. So how would you build a strategy? Let's take, you know, one of our brands, Primal Queen, for example, I know that you just launched it. And I know that right off the gate, I think week two, you already had like a 9x ROAS on retargeting. We had, I think, a 3x ROAS on contextual. You got them an additional 50 subscribe and save customers. So how did you do that? What was the strategy? And can you share with everyone how they can replicate that strategy? Yeah, it was pretty simple. I mean, for one, they had a solid amount of traffic going to their page through PPC. So simple retarget people that viewed but didn't purchase. You want to make sure you're negating purchases because otherwise you're serving ads as people that are already converted, which is pointless. So the way that you look at how long of a retargeting window you should use is based on price point. So a retargeting window for somebody that's selling a $20 product is going to be shorter than somebody selling a $200 product.
00:05:33
Speaker
So we went with a relatively tight retargeting window of 14 days. We launched product purchase remarketing as well, which is based on use cycle. So anybody that's bought the product, let's say the past 120 days, their average use case is 45 days before somebody's out. So we negate 45 day purchase window. So it's usually when somebody just ran out of their product, you can serve them ads to make sure that people go back to yours as opposed to going to a competitor. We also use contextual targeting, so this essentially is automated by Amazon for products that are commonly viewed or purchased alongside your product, and you're eligible to show up on those pages in real time. As you mentioned, that I think had a three or four return. And what was really nice about it is about, I think it was 92% of purchases were coming new to brand.
00:06:14
Speaker
And if you're looking at product purchase remarketing, that's automatically zero. So we turned off the product purchase remarketing relatively quickly to focus on people that were new to brand because that's outside of overall return ad spend. That's the next metric you really want to look at and because you don't want to just.
00:06:30
Speaker
cannibalize people that were ultimately going to purchase your product anyways. Yeah, I love that because when we're getting these new to brand customers, it actually means that we're building that customer base for the brand and adding that subscriber save builds that lifetime value for that brand, which, you know, the combination of both is is lethal. And the way that I like to typically build the strategy is, you know, like you said, purchase remarketing at the bottom, then retargeting, then potentially cross-selling if the product makes sense. If they have multiple products, absolutely. and then go up to competitor targeting. So people who viewed competitors, haven't purchased from them yet, yeah haven't viewed us. Go up to complimentary products. So if there's a complimentary product to mine, like I sell an electrolyte powder, probably anyone who's bought running products would need or that. So, you know, or maybe any ultra marathon triathlon stuff.
00:07:13
Speaker
So I would target people who purchase those products, but haven't purchased any electrolyte powders. And then we can go up there, you know, even higher up the funnel to in market or demographic. But usually I don't know if that's going to be like. Yeah, I prefer to not lean on Amazon's pre-created audiences. There are exceptions, but it's usually like the last thing we launch.
00:07:31
Speaker
but your point about complementary products i think is really important and that's why having an open line of communication with the brands we work with is incredibly important because i have a good idea of the products in the brand but nobody knows the brand like the brand owner so you tell me what other products does your ideal demographic ultimately purchase Let's look into some other ASINs. Let's serve ads on them in real time or let's serve ads to people that purchased XYZ product because that person likely is in the market for us as well, but they might not have heard of us. So that's the nice part is that DSP is also not dependent on queries.
00:08:07
Speaker
in the sense that you can find the person you're trying to serve and add to, even if they're not looking for you or your category, but it doesn't mean they're not a fit.
Access and Metrics for Amazon DSP
00:08:15
Speaker
Yeah, I love that. And now, how can people get access to Amazon DSP? It's incredibly difficult. Amazon made it that way on purpose. So that's part of why it's one of the most underutilized levers and one of the levers that there's the least information out there about it. To get an actual Amazon DSP seed,
00:08:31
Speaker
It's not like you can just sign up. Amazon makes it very difficult for agencies or brands to get a seat. They require a very high minimum ad spend and often they'll even require you to take some sort of a test to show a certification because they don't want people misusing it and then ultimately giving Amazon DSP a bad name because they drive poor results. So you can do that. Amazon has managed service, but you typically you need to spend at least $50,000 a month and they seemingly like to utilize their pre-created audiences so it doesn't do as well. Or you work with an agency and then functionally there is no minimum in terms of ad spend.
00:09:04
Speaker
yeah Yeah, when I signed up for my seat, which by the way, I had to post some insane strings to get it, they made me sign an agreement saying that I would spend $100,000 a month on DSP ads. Really? That was the only way. 100? 100,000. That's the highest I've heard. That's crazy. yeah yeah Yeah, but I mean... It changes all the time.
00:09:20
Speaker
Yeah, we got there. We got there relatively quickly. But yeah, it was kind of like scary signing that off. But it was almost impossible. And i don't I don't think anyone that I know has been able to get like a DSP seat. Yeah. Almost everyone accesses it through a tech partner. Yeah. Yeah. So some of the important things to look at, generally speaking, when you're assessing the performance of Amazon DSP, first of all, it's different for every brand. Some brands really care about a high return ad spend. I mean, most do. That's the basic one.
00:09:45
Speaker
That being said, other brands are very concerned with the percent of purchases coming new to brand. Other brands who are using it more so as a new customer acquisition tool. One very important metric that we look at is effective cost per detail page view. So as opposed to cost per click, which PPC uses Amazon DSP charge on a CPM or cost per mile basis.
00:10:04
Speaker
So that's cost per 1,000 impressions. One error that I see people making a lot is they put too much weight behind what their CPM is, so how much they're paying per 1,000 impressions. In my opinion, what's way more important is what is your cost per detail page view. Because if you're serving impressions incredibly cheap, but nobody's going to your detail page, so you have a high cost per detail page view, ultimately you're serving ads to the wrong people in the wrong places.
00:10:29
Speaker
If you have a high CPM, but a low cost per detail page view, then it means that even though you're paying more for the ad real estate that you're purchasing, you're serving them to to the right people and in the right places so people are going to your detail page. At the end of the day, the the goal is to drive sales. Ideally, both of them would be low. But to me, cost per detail page view outside of the general sales ROAS metrics is one of the most important things to take into consideration.
00:10:54
Speaker
Yeah, and I love that you're talking about KPIs because also as you build the funnel, the KPIs are different. So at the bottom, when you have purchase remarketing, retargeting, that stuff, ROAS really matters because you can actually measure it accurately. But when it comes down to competitor targeting, complimentary product targeting, contextual, a lot of times that campaign can get a view, but then retargeting kicks in right away. And that's the one that gets the credit for the sale. And so in that case, you want to focus more on click through it and detail page view rate, as opposed to actually ROAS because retargeting is just getting all of the sales. So you want to drive a low cost per detail page view when you're targeting the mid funnel. And if ideally you can get a high row as to, but if you're not, you need to step back and look at how, how are your bottom funnel campaigns being impacted or how many branded searches are you seeing? And what does that look like on the PPC side? Because you can be serving ads to people. They see your brand, they look you up and they either go organically or through PPC. And it could be the mid funnel DSP ads that are driving that.
00:11:49
Speaker
And that's another metric you can actually track within DSP is branded searches. So we'd be able to see how many times people view the DSP ad and then subsequently search for your brand. So I think that's that's another really important thing to take into consideration, especially when you're running mid or upper funnel or any streaming TV. It's important to look at that.
00:12:07
Speaker
And one last thing is I want to debunk a myth. So a lot of people think that you need to spend at least $30,000 on Amazon DSP. Like that's the requirement. It's absolutely not. You can spend $2,000 a month. You can spend $1,000 a month with us as an agency. It just wouldn't make sense because you have to pay for Sam and his team. That's exactly it. It's at the end of the day, like we have brands test out Amazon DSP for a couple thousand dollars. See how it works. I usually don't recommend going below five.
00:12:34
Speaker
Just because if you're going to also be paying an agency, you don't want to be spending as much in agency fees as you are in the platform. It just doesn't make sense. But the idea that you have to spend $20,000, $30,000 a month to access it is kind of something that Amazon came up with that they still enforce. And a lot of agencies have just picked up on that and they don't really question why.
00:12:54
Speaker
yeah Yeah, there's a lot of myths on Amazon DSP. There's some things to pay attention to. So if you're working with ah you know an agency partner, sometimes they can fluff up the number but by changing like some of the attributes and like how they measure yeah the results. And so the last thing I want to touch on is when you are looking at the results from DSP, the only way to accurately do this is let's say before DSP, you're spending $1,000 on PPC, making $4,000 in sales.
00:13:19
Speaker
After DSP, you're spending $1,000 on PPC, $500 on DSP, and then you're making $5,000 in sales. So effectively, you spent $500 on DSP, you made $1,000 more in sales, you have a 2X ROAS. That's the only way you can truly measure DSP. Anything that you see on the platform can be very misleading. So as much as we like to look at the numbers and report it, we always want to see what the true up is and how much we've added to the total revenue. And it's exactly why, you know, I talk about how, you know, PPC and organic, like a lot of people try and separate them. You can't separate it. Okay. You can't separate. Like if you added streaming TV, you can't separate that because there's going to be zero results on streaming TV. But if you start spending $500 a month on streaming TV and all of a sudden you're, you know, gain two or $3,000 a month in sales, then you can start attributing that. So yeah that's ah essentially like the only way to really measure Amazon DSP is effectiveness. Yeah, a lot of good points there because it works in both ways, right? It can either be over attributed or under attributed. And the only way, there's a couple ways you can tell, but the best way is just to zoom out and see how your total sales are doing.
Integrating DSP with PPC
00:14:20
Speaker
If the DSP manager knows what they're doing, they will be deduplicating sales between DSP and PPC via merchant token. That's incredibly important. But you need to zoom out and see how your overall sales are doing. And then the other piece is if you're able to access the Amazon Marketing Cloud, which we'll talk about another time,
00:14:36
Speaker
You can see things like path to conversion across ad types. Another really important one is assisted conversions. So it'll give you data on basically how many people saw a DSP ad, clicked a PPC ad, and then bought. And those are there's there's a ton of data we can dive into, but you really need to pay attention to numbers beyond just what's directly reported at all times. I love it. All right, guys. See you in the next one.