This year, Amazon’s advertising revenue is set to reach $3.19 billion in the United States. If your brand is already selling on the platform, are you utilizing both search and programmatic options to advertise your products? It’s important for brands to understand the difference between each method and what they can accomplish when used together. Here’s an explanation of the differences between Amazon Advertising and demand-side platform (DSP), and why we see the best results with our clients when the two are used together.
Amazon Advertising Explained
Amazon Advertising is Amazon’s cost-per-click (CPC) model of search advertising. The goal is to help increase product page views and drive sales velocity. These are two factors important to Amazon’s organic ranking. We generally find that brands that use search advertising are in a better position to jumpstart Amazon’s flywheel. In other words, advertising helps build enough momentum for a product to begin ranking better on its own.
Search advertising is used to increase the brand’s discoverability and awareness. These advertisements show up in a shopper’s search results if they match the keywords used to find a product. Amazon Advertising campaigns also display on product detail pages of similar products. This helps give the shopper more options to choose from.
When advertisers are ready to begin targeting, they can choose manual or automatic methods. We’ve found that automatic campaigns drive the best results and manual targeting is better for increasing market share. This is important for advertisers to keep in mind when choosing whether a manual or automatic method is best. Manual targeting involves inputting keywords, targeting competitor ASINs (Amazon standard identification numbers) and specific categories. Automatic targeting uses Amazon’s algorithm to match a shopper’s search to a relevant ad. Either way, advertisers can set their bids to the maximum amount they’re willing to pay for each click. I’d recommend monitoring daily budgets to help control the overall spend.
Amazon DSP Explained
Amazon DSP is Amazon’s programmatic display advertising option and it’s used to reach shoppers across the entire funnel. This method provides advertisers’ audiences to reach both on and off-Amazon shoppers. For example, DSP ads reach Amazon.com, its mobile app, major ad exchanges, and Amazon-owned properties like Internet Movie Database (IMDB).
Here’s how DSP is used to reach people at any stage of their buying journey:
• Top Of The Funnel
DSP can be used to increase page traffic that can be repurposed further down the funnel. These shoppers can later be re-engaged and moved to a closer point-of-purchase. One way to leverage DSP to reach shoppers that fall within the top of the funnel is to create lifestyle audiences. These audiences are based on long-term product category data. For example, a lifestyle audience can consist of fans of a specific genre of music or films.
• Middle Of The Funnel
At this stage, shoppers are actively weighing their options. Many people visit various product pages, view images, and read product descriptions and reviews before making a purchase. Here, DSP can help differentiate your brand from the competition by targeting both your page traffic and your competitors’.
For middle-of-the-funnel shoppers, brands can use DSP to reach in-market audiences. These audiences are based on recent shopping behaviors. For example, brands could use specific product-level data to reach consumers interested in different types of a certain product.
• Bottom Of The Funnel
Shoppers who find themselves at the bottom of the funnel are likely ready to make a purchase. DSP can help to keep them engaged throughout this process and drive conversions. It can also be used to re-engage a shopper and generate long-term brand loyalty.
Creating similar product-view audiences and retargeting is one way to leverage DSP for bottom-of-the-funnel consumers. These audiences help brands reach people who have viewed their products or competitor listings.
When taking a defensive approach to DSP, brands should ensure coverage of top sellers and product pages within their catalog. Alternatively, an offensive approach should target competitor listings with DSP ads. When targeting a competitor’s product, dynamic ads using customer reviews can be impactful and help differentiate your brand.
When Should Brands Leverage Both Advertising Options On Amazon?
Search advertising works to capture a shopper’s intent and consumer demand. On the other hand, programmatic advertising targets consumers based on trends in their behavior. Programmatic strategies generate demand and keep shoppers engaged throughout the path to purchase. We recommend DSP to each of our clients already using Amazon Advertising (search). The only caveat to running a combination of campaigns is that it could result in increased sales volume, so you need to be ready to support the extra demand.
However, for brands with limited budgets, I recommend beginning with search advertising to capitalize on bottom-funnel demand. This might mean investing in automatic or unbranded terms to establish brand awareness. Otherwise, using DSP on its own could generate search volume that can’t be captured.
In today’s e-commerce landscape, it’s important for brands to understand the different options they have on the Amazon platform to make the greatest impact. A healthy mix of both search and programmatic advertising, in our experience, yields the best results.
