6 Key Amazon DSP Challenges: How to Overcome Them and Maximize Your Advertising ROI

‍Amazon DSP (Demand-Side Platform), launched in 2018, is a powerful software for brands to buy ads programmatically and reach highly targeted audiences, wherever they may be. Amazon PPC, primarily focused on the Amazon platform, has been around since 2012 and is here to stay as an essential Amazon advertising method. However, Amazon DSP  significantly differs, offering more opportunities for brands and advertisers.

Understanding Amazon DSP

While Amazon PPC advertising efforts are concentrated on search terms and people actively looking on Amazon for your or similar products, Amazon DSP can help you target highly specific audiences wherever they spend their time, both on and off Amazon. 

With Amazon DSP, you get access to Amazon’s valuable first-party data, allowing you to create targeted ads and follow potential customers at every step of their purchasing journey. Whether they are on Amazon-owned and operated sites or other third-party platforms, your Amazon Demand-Side Platform campaigns can be used for various advertising funnel stages based on your business goals. 

Another advantage of this platform is that you don’t have to sell on the Amazon platform to benefit from Amazon DSP. Non-endemic advertisers can leverage Amazon’s 1P data to create targeted campaigns. For example, travel and financial services brands can advertise with ADSP without being present on Amazon. 

Amazon’s precise geolocation data ensures you can make hyper-targeted campaigns, while access to behavioral insights, like cart additions and searches, enables you to create unique targeting strategies. If you’re a travel brand, you can leverage Amazon DSP to target customers who recently added sunscreen or beach towels to their carts. This is a high level of customization and precise targeting you don’t get with Amazon PPC. 

Overcoming Amazon DSP Challenges

Navigating Amazon DSP (ADSP) can be daunting, especially if you opt for a self-service option. First, you must meet specific requirements and make substantial investments to obtain your seat and access Amazon DSP. Once you get in, a minimum ad spend of around $35K for self-service is required. It’s equally challenging and even more expensive (over $50K minimum spend requirement) if you decide to have Amazon directly manage your ADSP.

However, a trusted partner agency like Blue Wheel provides the expertise, tools, and experience to help you overcome common Amazon DSP obstacles and achieve maximum ROI. We don’t have a strict minimum requirement and typically suggest a monthly Amazon DSP advertising spend of about $10K. With our Amazon DSP and Amazon Marketing Cloud (AMC) services combined in one powerful advertising solution, we can give you the edge over your competitors who also advertise with ADSP.

Amazon DSP requires a clear strategy, expertise, and proper budgeting to overcome its common challenges. This blog breaks down the steps to help your brand succeed at every stage of your Demand-Side Platform journey.

1. Expertise in Amazon DSP Platform Navigation

Amazon DSP’s interface can be overwhelming, particularly if you are new to programmatic advertising. Its array of options, targeting capabilities, and reporting features require expertise to navigate effectively. 

If you want to self-manage Amazon DSP, you’ll need to invest resources to get an in-house team with proper Amazon DSP knowledge, certificates, and experience. Understanding Amazon DSP’s complex interface is crucial for campaign success. Partnering with a skilled Amazon marketing and advertising agency that can streamline campaign setup, management, and optimization can help you overcome these challenges. 

To make the most of Amazon DSP, it’s important to start with your unique goals, needs, and budget. Whether you’re aiming to boost brand awareness or build customer loyalty, aligning your campaigns with specific business objectives is key to success.

With Blue Wheel specialists guiding the way, you can take full advantage of Amazon DSP’s precise targeting and detailed reporting features. Our team supports brands with tailored strategies that maximize impact. For example, if your brand dominates its niche but struggles with lifetime value, we might recommend retargeting campaigns or educating new audiences to drive long-term growth.

2. Managing High Amazon DSP Entry Costs

Amazon DSP often requires a significant budget to get started. We mentioned earlier that both self-service and an Amazon-managed service come with elevated minimum spend requirements, which can be a barrier for small to mid-sized brands. You can work with a dedicated advertising agency backed by relevant Amazon DSP expertise to overcome these financial constraints.

Whether you choose a self-service approach or partnership with an Amazon DSP agency, cost-effective campaigns combined with AMC can help you make the most of your investment. Strategies such as targeting high-intent audiences and using A/B testing ensure that your ad spend delivers measurable results. By incorporating Amazon Marketing Cloud (AMC) into your DSP efforts, you can identify high-converting segments and create tailored audiences that align with your brand’s unique goals.

3. Decoding Reporting Transparency

Amazon DSP offers extensive data, but turning it into actionable insights requires expertise. Does your in-house advertising team have the right knowledge and practical experience? If not, you must invest more time and money to hire additional team members to address these needs. You can overcome this major obstacle if you choose to work with us.

Our team simplifies complex Amazon DSP reports, focusing on key metrics like ROAS, view-through rates, and audience insights to assess your performance. We can clarify key performance metrics and which ones to observe for different stages of the purchase funnel, from brand awareness to retargeting and loyalty, and how they correlate to your unique brand goals and results. 

4. Preventing Targeting Overlap and Using AMC

With multiple campaigns, there’s a risk of overlapping audiences, leading to wasted ad spend and poor performance. This is especially important if you’re new to Amazon DSP and choose a self-service option. A partner agency like Blue Wheel can minimize overlap by creating granular audience segments based on behaviors, demographics, and purchasing history. Frequency caps are utilized to ensure your audience is engaged without being overexposed to your ads.

By incorporating AMC as part of our DSP services, you gain access to a powerful tool for analyzing data and optimizing campaigns. Unlike many other agencies, we include Amazon Marketing Cloud in our core Amazon DSP offering at no extra cost. This cloud-based, clean room solution provides detailed attribution paths, reveals the efficiency of various advertising efforts, and enables data-driven optimization to refine your campaigns and drive better results.

While AMC can be used without running DSP, it offers enhanced insights and powerful audience targeting when combined with DSP. However, creating actionable insights from AMC data requires expertise, as it involves using SQL and interpreting data effectively.

In a recent survey we ran, brands explained how they tested Amazon DSP but it didn’t work for them. AMC now offers insights that weren’t available before, making it possible to refine strategies and revisit Amazon DSP with confidence. Additionally, these brands are running DSP but don’t use AMC. The fact is that Amazon Marketing Cloud adds critical value to DSP. Using AMC to identify the most impactful ad placements ensures your campaigns are more efficient and maximize your ad spend. 

5. Creative Optimization for Amazon DSP

Engaging ad creative is essential for driving clicks and conversions since ads that don’t resonate with your audience can lead to low engagement rates. Once again, a question arises. Is your in-house team equipped with specialists ready to create and deliver creative for various Amazon DSP advertising formats? ADSP offers a wide range of ad formats such as display ads, streaming TV, audio ads, and video ads. This gives you more flexibility in reaching your target audiences in diverse ways, including off-Amazon placements.

Making effective ad creatives is key to connecting with your target audience. Start by developing compelling, data-driven visuals tailored to your audience’s preferences and needs. Regularly test different creative, ad formats, and messaging to identify what resonates most. 

For even greater impact, consider partnering with a creative agency like Blue Wheel. With tools like dynamic creative optimization, an experienced team can help you create personalized ads tailored to real-time data, such as user preferences, past purchases, or browsing behavior, ensuring your campaigns stay relevant and deliver results.

6. Expectations with Amazon DSP

Realistic expectations with Amazon DSP are crucial. Brands often expect DSP to perform better than PPC, but ADSP is more about long-term engagement and requires significant time, investment, and data to optimize effectively. The timeline for seeing results depends on the specific goals you have for your brand.

How long it will take for your Amazon DSP campaigns to show expected outcomes will vary, especially when building awareness or capturing new audiences. However, retargeting campaigns tend to yield quicker results, particularly if they focus on people who have already interacted with your brand but haven’t purchased yet.

Final Thoughts 

Overcoming six key Amazon DSP challenges includes investing in specialists with experience and expertise, allocating sufficient advertising budget, continuous optimization, and leveraging the platform’s unique capabilities. Your brand can unlock the full potential of Amazon DSP and drive impactful results by partnering with Blue Wheel.

Our Amazon DSP team will support you from campaign setup to creative and ongoing optimization, as it works closely with you to drive measurable results. In addition, our strategies are informed by Amazon Marketing Cloud data, ensuring every dollar you spend on the Amazon Demand Side Platform contributes to your overall business objectives.

Contact us today to learn how we can help you achieve your goals with Amazon DSP.