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Why DSP Isn’t Right for Every Brand

Everyone is talking about DSP these days — from sellers to agencies and even Amazon themselves. Amazon reps recommend DSP to most sellers on the platform, so many brands are anxious to try this ad type as a means to grow their business.

But DSP isn’t right for every brand.

This might come as a shock to some sellers, especially since Amazon themselves push DSP. But, like most forms of advertising, one size is not fit all. And DSP is definitely not for everyone.

As an Amazon Advertising agency, we typically only open up a conversation about running DSP only after a brand reaches a certain point. Read on to discover when DSP is the wrong and right choice to help you determine if DSP is right for your brand at this time!

When DSP Is the Wrong Choice

Before you even begin thinking about DSP, you need to be utilizing all advertising types on Amazon, including:

  • Sponsored Product Ads
  • Sponsored Brand Ads
  • Sponsored Brand Video
  • Display Ads

In each of these ad types, you should be implementing a variety of different strategies to reach different goals, utilizing all of your budget, and consistently hitting your ACoS or revenue goals. These strategies could include ASIN targeting, brand defense, and ranking campaigns.

The goal is to maximize everything you’re doing on search first. If you’re not taking full advantage of all ad types and all strategies, you won’t benefit from DSP at this stage anyway. You’ll just be wasting money.

When DSP Is The Right Choice

Once you’ve maximized all the other ad types, then you can start thinking about investing in DSP.

When consulting with our clients, we open up the conversation to explore DSP when we start to see bottom line sales plateau, as this likely means they’ve got great coverage on your current advertising.

At this point, DSP can be used to grow brand awareness and invest in retargeting strategies. “Because DSP utilizes Amazon’s first-party data for shoppers and audiences, we can target ads based on audiences instead of keywords or ASINs, which is what we do with other forms of advertising,” says Vanessa Lee, and Amazon Advertising Account Manager at Blue Wheel.

Most marketing strategies, whether on or off Amazon, begin with lower-funnel strategies and work their way up to upper-funnel strategies. Upper-funnel strategies focus on reaching new customers, so they typically have a higher ACoS on Amazon.

When you’ve successfully implemented DSP, you’ll eventually see a brand halo effect. When we started running DSP with one of our clients, we pretty quickly saw a correlation between DSP and branded search. After we began running DSP, we saw an overall increase in branded search as consumers saw our ads off Amazon and then searched for the brand on Amazon.

amazon dsp graph
amazon dsp chart

So, while you likely won’t achieve a high ACoS on these campaigns, you will likely see a halo effect over time. It’s important to go into DSP with the expectation that you won’t get direct returns, it’s an expensive investment (minimum $5K/month), and it’s a long-term strategy. But, if you have fully invested in all other search options, DSP makes a great addition to your overall strategy.

Wondering if DSP is right for you? Looking for someone to manage your overall Amazon Advertising? Chat with an Amazon Advertising expert at Blue Wheel today!

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