How DSP and External Traffic Are Revolutionizing Amazon Advertising

By The SPS Commerce Team, The SPS Commerce Team

Last Updated October 31, 2024

6 min read

Amazon’s advertising landscape has evolved dramatically in recent years, requiring sellers to adopt advanced strategies to stay competitive. One of the most effective tools for modern sellers is Demand-Side Platform (DSP), which enables them to leverage external traffic, retarget audiences, and convert both new and existing customers.

But how are the top brands cracking the code on staying on top of Amazon’s advertising trends and technology without sacrificing profitability? Read on for more about the evolution (and revolution) of Amazon ads.

The Power of Amazon DSP in Advertising

DSP is a technology that allows advertisers to buy digital ads across multiple platforms automatically. With Amazon DSP, sellers gain access to Amazon’s first-party customer data, allowing for precise audience targeting that can’t be matched by third-party tools.

Unlike traditional advertising platforms, DSP can serve ads across websites, apps, and connected devices, allowing sellers to follow potential customers throughout their browsing journey.

What sets Amazon’s DSP apart from other solutions like Google Display & Video 360 or The Trade Desk is its deep integration with Amazon’s marketplace, giving sellers the unique ability to target customers based on their actual shopping behavior.

From initial awareness to the final purchase decision, DSP offers a comprehensive solution that can engage customers at every stage of their shopping experience.

Just Announced: Amazon DSP Updates from Accelerate, UnBoxed

At Amazon Accelerate in September and Amazon UnBoxed in October, Amazon introduced several updates to its DSP to improve efficiency:

Streamlined Workflows: A new UI reduces campaign setup time by 75%, featuring consolidated display inventory and machine learning recommendations. A campaign management hub is planned for 2025.
Enhanced Frequency Management: New controls optimize ad frequency, cutting duplicate impressions by 26% and boosting reach by 21%.
AI-Driven Optimization: The Performance+ feature uses predictive AI to lower acquisition costs by 51%.
New Generative AI Integrations: Expanded attribution and AI-powered creative tools further improve measurement and ad creation.

Plus, starting November 1, Amazon’s ad platform will expand video and display campaigns to premium inventory sources across its ecosystem including Fire TV, IMDb, Twitch, Whole Foods Market, and more, simplifying campaign management while also increasing reach.

What does that mean for sellers? Amazon is investing in DSP, and you should too.

Why Sellers Should Adopt DSP Now

As competition intensifies, those who invest in DSP early will have a major advantage. With Return on Ad Spend (ROAS) averaging around 6x, the potential rewards far outweigh the costs.

Overcoming Seller Concerns About DSP Costs

Many sellers are hesitant to adopt DSP because of concerns around costs and transparency. With DSP Prime, sellers gain direct access to Amazon’s DSP, eliminating inefficiencies that often come with third-party agencies and ensuring that advertising dollars are used effectively.

How External Traffic and Amazon DSP Go Hand-in-Hand

One of the most critical shifts in Amazon Advertising is the growing importance of driving external traffic.

Despite partnering with TikTok, Shopify, PayPal, and other merchants to streamline Buy-with-Prime across other selling platforms, at the end of the day, Amazon still wants sales to go through Amazon.

That’s why Amazon rewards sellers who bring in customers from platforms like Google, social media, and influencer campaigns by giving them access to Amazon Attribution and the Amazon Brand Referral Bonus (BRB) which awards 10% back for every conversion driven by off-Amazon traffic.

But what if there was a way to drive fresh traffic to Amazon from external platforms and then retarget those same prospects with precise, data-driven campaigns?

If you’ve been paying attention, you know that that is exactly what PixelMe and DSP Prime are designed to do.

When combined, PixelMe essentially feeds the DSP machine, amplifying DSP Prime’s effectiveness and ROAS. Sellers who integrate both PixelMe and DSP Prime ensure that high-intent, off-Amazon traffic not only ranks their products higher but also maximizes their profitability.

Leveraging DSP and External Traffic for Growth

Here’s how tools like DSP Prime and PixelMe can help you build an unbeatable ad strategy:

Audience Discovery and Retargeting: PixelMe identifies customers who interact with external sources—such as Google Ads or social media—leading them directly to the product page on Amazon.
Hyper-Targeted Audience Segmentation: DSP’s advanced targeting capabilities allow sellers to define audiences based on Amazon shopping behaviors, creating a more personalized advertising experience that increases conversion likelihood.
Brand Referral Bonus (BRB): Sellers can maximize their advertising investment by combining DSP and Amazon’s Brand Referral Bonus, which offers up to 10% back on sales from external traffic. Even with DSP running, sellers are eligible for this bonus, which can then be reinvested to amplify their external marketing efforts.

This combination of tools not only expands reach beyond the expected audience, but also improves conversion rates and product ranking.

Amazon’s advertising environment is becoming more competitive, and sellers must take advantage of the most effective tools to stay ahead.