Paid advertising remains one of the most reliable ways to market and grow your business on Amazon to date. Whether you’re a new seller looking to give your product that boost, or a seasoned one aiming to increase your product outreach and expand your market share, Amazon ads are the way to go.
Amazon Ads gives you a chance to display your product at the top spots where most customers like to shop. When done right, it helps create brand awareness, increases outreach, generates traffic, and boosts your sales and rankings. Sellers who leverage Amazon ads as part of their business strategy generate around 101,265 impressions daily, with an average conversion rate of 9.87%.
Most consider Amazon PPC a temporary fix when sales are down or a quick-moon solution for new products. While that is true to an extent, the benefits don’t stop here. Paid advertising is a tool meant to be used in the long term. It can even help you improve your organic rankings indirectly. This is because rankings improve with the increase in sales and conversions; PPC helps drive all that.
There are multiple advertising platforms under the Amazon Ads umbrella — the two main being Sponsored Display and Amazon DSP. Both platforms have their purpose. However, sellers often confuse the two due to their similar names.
If you want to get the most out of Amazon Ads, you should be able to distinguish between the two platforms. This blog will help you do just that. We’ll review Amazon Sponsored Display and DSP ads, including their similarities and differences, and discuss which one is better.
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What is Amazon Sponsored Display?
Amazon Sponsored Display ads, previously known as “Product Display Ads’, are pay-per-click ads on Amazon pages. They help brands to reach their target audience and create an impact. This ad type allows you to advertise products sold on Amazon to customers who like to buy from the marketplace.
In Amazon’s own words: “Sponsored Display is a self-service display advertising solution that helps you grow your business and brand by engaging shoppers across the purchase journey, on and off Amazon.”
So where can you find them?
If you’ve ever shopped on Amazon, you must have noticed those small ads on the listings and search results pages. These ads show similar items to the ones you are interested in buying. And they are generated by the Sponsored Display platform.
You can also find Sponsored Display ads on customer review pages, within the Amazon app, and on third-party websites that are part of the Amazon ecosystem. In the latter case, the ads redirect the users to Amazon, where they are ultimately converted.
Here’s an example of an Amazon Sponsored Display ad on a product detail page:
Unlike Sponsored Products and Sponsored Brands that use keyword targeting, Sponsored Display uses shopping insights to show customers relevant ads. The platform pushes out ads to customers viewing products akin to yours or who have previously visited your listing, searched for keywords related to your item, or bought from you in the past.
To put it simply, Amazon tracks each consumer’s search history, and if it detects they are searching for items similar to yours, it shows them your product as part of the Sponsored Display ads.
What is Amazon DSP?
To understand the often misunderstood Amazon DSP tool, you first need to know what DSP is.
A Demand Side Platform (DSP) is a platform where online business owners can purchase advertising across various channels via automation.
Amazon DSP lets you bid for ads, both banners and video, off and on Amazon. It facilitates programmatic advertising — a complex term that refers to the automated process of buying and selling ads and publishing them based on collected customer data. Interestingly, you don’t need to have a product on Amazon to use the platform.
Amazon describes DSP as: “A software that provides automated, centralized media buying from multiple sources to reach new and existing audiences on and off Amazon.”
Amazon DSP allows advertisers to observe customers’ buying patterns and use Amazon’s massive data pool to extract valuable audience intel needed to perform advanced targeting.
Required ad formats can vary depending on the part of the funnel you’re targeting and the message you’re trying to convey to your audience. Luckily, DSP gives you multiple options to choose from:
- Dynamic E-commerce Ads
- Static/ Display Ads
- Video Ads
- Audio Ads
- Over-the-top Video Ads (OTT)
Is Amazon DSP the same as Sponsored Display?
While the two tools may seem similar, Amazon DSP ads differ significantly from Sponsored Display ads in terms of cost structure, eligibility, minimum investment, and other aspects.
Sponsored Display ads are self-service and easy to learn and create. They are available to brand-registered sellers only and follow the pay-per-click model. You can set them up for as low as $1, which is excellent if you have a low budget for advertising. Unfortunately, they don’t offer many customization options.
In contrast, Amazon DSP ads come with a steep learning curve, have higher minimum budget requirements, and operate on a pay-per-impression model. They give you maximum control over your campaign creatives, allowing you to customize your ads as you wish.
However, there is an even bigger difference that separates the two platforms. Sponsored Display only deals with conversions on the Amazon marketplace, while Amazon DSP deals with conversions both on and off Amazon.
Similarities between Amazon Sponsored Display and DSP
Amazon DSP and Sponsored Display are two different platforms. Still, they operate with the same end goal. They aim to improve visibility, grow brand awareness, boost rankings, and generate more sales and profits for your store.
But that’s not where the similarities end.
Both these platforms allow you to leverage the entire Amazon ecosystem to increase traffic to your listing. They both are self-service tools to an extent. However, DSP only allows this luxury if you commit to Amazon’s minimum spend requirements.
Which is Better – Amazon Sponsored Display or DSP?
To answer this question, let’s compare the two in detail:
Eligibility
Only brand-registered sellers can use Sponsored Display ads as the platform is built to facilitate conversions on the Amazon marketplace. In contrast, Amazon DSP ads can be used by all advertisers, regardless of whether they sell on Amazon or not.
Winner: Amazon DSP comes out on top in this category because all advertisers can use the tool, albeit with conditions.
Minimum Budget
With Sponsored Display ads, there are no minimum budget requirements (you can get started with just $1). On the other hand, Amazon DSP ads require a minimum ad spend of $35000. And although that’s a reasonable amount considering the advanced features they offer, that could still be a significant investment, esp. for small sellers.
Winner: Sponsored Display as it is accessible to all businesses–both big and small.
Ease of Set-Up
Amazon Sponsored Display ads are easy to set up and don’t require much or any expertise for that matter. Simply go to the Amazon Ads Console, choose your targeting method, put in your bids, and Amazon will auto-generate the ads using the information available for your product.
Amazon DSP, however, has a steep learning curve. There is a separate console you need to get familiar with, and many newbie sellers find it complex.
Winner: Sponsored Display Ads as it’s perfect for beginners.
Easy To Manage
Sponsored Display ads are easy to manage as the Amazon Ads Console helps you do everything in one place. You can edit, launch, and monitor your campaigns without multiple log-ins. It also allows you to adjust the bids and easily optimize other ad elements.
In comparison, managing ads on Amazon DSP is much more complicated and requires you to visit a separate DSP console, which can appear inconvenient at times.
Winner: Sponsored Display ads again because of the reasons stated above.
Cost Model
Like other ads in the Amazon Ads Console, Amazon Sponsored Display ads operate on a cost-per-click (CPC) model. Sellers pay a specific amount based on the number of clicks their ads generate.
On the other hand, Amazon DSP ads work on the Cost Per Mille (CPM) model, where you pay a specific amount for every thousand impressions your ad receives.
Winner: It’s a tie as there is no clear winner with this one. It all depends on your advertising goals. If you’re looking for clicks and direct sales, CPC is the way. However, if you’re more interested in brand building and creating product awareness, the CPM model should work best.
Supported Products
Sponsored Display ads are great for new and lower volume products as they help target users at the bottom of the funnel with strong purchase intent.
Running efficient DSP ads on such products could be an inefficient use of resources. These ads are better utilized with already established products with significant traction in the market.
Winner: A draw yet again! Your decision will depend on your product’s stage.
Control Over Creatives
With Sponsored Display Ads, you have little control over the creatives as your customization options are limited to the generic Amazon product details. However, Amazon is planning to change this in the near future, although with some restrictions.
In contrast, you get a lot of control over your creatives with Amazon DSP, as you can customize headlines, brand logos, images, videos, and other content.
Winner: Amazon DSP ads as they provide more personalized branding options.
Bid Optimization
When using Sponsored Display ads, you get only one bid optimization option, which is changing your bid. Also, you have access to a fewer number of reports, which makes optimizing ads a challenge.
With Amazon DSP, however, you have multiple optimization options. For example, you can establish minimum and maximum supply bids for different placement opportunities and even specify the maximum number of times Amazon should show your ads to a single customer. Additionally, you get access to more reports to perform ad optimization more efficiently.
Winner: Amazon Demand Side Platform beats Sponsored Display in this category with multiple bid adjustment options and reports,
Audience Targeting and Negating
With Amazon Sponsored Display, you can’t refine your target audience, so you must cast a wider net, often leading to bleeding.
In comparison, Amazon DSP allows you to filter and create custom audiences. You can also negate the audience that you don’t want to target.
Winner: The ability to choose the target audience makes Amazon DSP a clear winner here.
The Final Verdict
This guide discussed the Amazon Sponsored Display and DSP platforms — their similarities, differences, and strengths.
There can be no single answer on which ad format is better, as each has its pros and cons. The right platform for your business will depend on your product, business size, capital, team capacity, and advertising goals.
If you’re a small business just starting out, Sponsored Display is your best option. However, if you have a mature product, sufficient capital, and are aiming to expand and scale your business, the Amazon Demand Side Platform might be better for you.
All in all, it’s up to you to use what you’ve discovered from this guide and choose the advertising solution that fits you best.
About the Author
Hammad Nafees is an SEO and Outreach Specialist at ZonGuru. ZonGuru is an all-in-one Amazon toolkit that helps private label sellers with product research, niche evaluation, competition analysis, listing optimization, inventory tracking, customer review acquisition, and running day-to-day operations of their Amazon business.
A marketer by trade, a writer at heart, and an Amazon evangelist around-the-clock, Hammad lives and breathes the world of the smiling A. He often discusses the ins and outs of the marketplace across the web. In rare instances when he is not busy educating audiences, he likes to sit down and have a good me-time watching the latest football action on his large-sized TV screen.
