• by Andrew Ransom , Op-Ed Contributor, March 10, 2022

In 2018, Amazon launched its first full-service DSP, bringing the ecommerce giant into the marketplace for delivering ads to online users in real-time.

Its wealth of proprietary data and inventory make Amazon's DSP are important assets to advertisers looking to promote products, brands, or services to Amazon's customer base.

But how does Amazon's offering compare to other competitors in the space like The Trade Desk or DV360? Specializing in programmatic display advertising, I have performed a thorough test of the platform, providing some insights on the pros, cons, and hopes for this relatively new technology in ad tech.

During initial research and testing of the platform, I found a number of unique and useful features singular to Amazon DSP.  First among these features is its proprietary inventory. Only through this DSP can advertisers access inventory on Amazon, as well as its owned-and-operated properties, such as IMDBTV and Twitch.

In that same vein, Amazon's internal data on its shoppers is second to none. The DSP leverages this powerful asset to help advertisers create lookalikes and retarget audiences within the Amazon space that is unmatched by competitor DSPs.

On top of that, the DSP provides a simple, easy-to-use, creative builder in the platform that can take an advertiser's product(s) sold on Amazon and instantly convert them to a creative that can be served across all of Amazon's available inventory.

These features provide an immediate advantage for a number of advertisers. In particular, large advertisers with significant branding budgets will find Amazon's proprietary inventory an easy win, using an uncrowded marketplace to build brand ID with consumers where many other advertisers still are not serving.

Advertisers looking to promote products on Amazon that are unique to their brand will also find advantages in Amazon DSP.

The ability to tap into Amazon's first-party data and easily create ads that drive product sales provides a quick and scalable way to increase revenue.

Lastly, Amazon provides a singularly unique avenue for advertisers looking to promote content available to stream through Amazon's Prime Video services. The ability to purchase display and CTV ads on the streaming platform is something you can only find within the Amazon DSP.

While Amazon's DSP provides a number of advantages for certain advertisers, the platform is still relatively young compared to competitors, and a few areas still need development.

For instance, Amazon's product IDs (ASINs) are unique to products, not sellers, which leads to difficulty in tracking sales for advertisers with non-unique products. If an advertiser is driving customers to a product that is fulfilled by more than one seller, there is no way to guarantee that the purchase will be fulfilled by the advertiser driving the click. These limits use cases for on-Amazon advertising to advertisers selling unique brand products.

For advertisers looking to drive sales off Amazon, there are additional pitfalls. Amazon's tracking pixels can register events, but do not pass back any customizable data parameters. So an advertiser will be able to track a purchase driven off of Amazon, but will not be able to pull through any information about the purchase such as Order ID, or the revenue associated with it.

Overall, I believe there is work to be done with Amazon's pre-made targeting segments. With the level of data available at Amazon's fingertips, I expected a larger collection of data segments available to target within the DSP.

Instead, I found most of the segments to be the traditional lifestyle and in-market segments available on nearly every competitor DSP.

A larger collection of unique segments based on user behavior within Amazon properties could be a huge selling point for advertisers looking to drive bottom-of-funnel actions through the DSP.

Because of these limitations, there are some businesses whose advertising needs would be best serviced outside of Amazon DSP.

These businesses include any that are classified as a “marketplace.” These are essentially any retailers who sell multiple brands within their stores or online shops. As Amazon views these marketplaces as competitors, their activity on the platform is greatly restricted.

For businesses not considered marketplaces, I would recommend that anyone looking to promote sales off Amazon, or who does not sell unique products on Amazon, use other avenues of programmatic advertising.

From what I have seen inside the Amazon DSP, its rapid development is impressive. In three years, the DSP has made incredible headway and provides a number of tools that are not available in its much older competitors. While there are some areas that need development inside the DSP, it is exciting to see how those opportunities will be tackled by the company in the years to come.

This testing with Amazon has provided an enormous amount of insight into how it can help or hinder certain clients. As noted above, there are plenty of businesses that can find success within the DSP right now, and those advertisers should be encouraged to take advantage of the capabilities Amazon has to offer. But for those businesses who don't fit into the DSP's wheelhouse, there are several alternative solutions. From standard display and CTV to paid search and social media, each of these digital marketing channels, when leveraged strategically, can be remarkably effective for driving online sales and ROAS.