DTC POD: What Every Brand Needs to Know about Amazon DSP Advertising

This week, we’re joined by Sam Lee, Vice President of Amazon DSP at Trivium, a full-service Amazon agency.

With a background spanning Google Ads, Facebook Ads, and Amazon PPC, Sam has developed deep expertise in Amazon DSP and has successfully managed advertising for over 200 brands.

In this episode of DTC Pod, Sam provides a comprehensive overview of Amazon DSP, its functionality, and its potential for driving brand growth. He shares practical insights on topics such as when brands should consider investing in DSP, what budget and review thresholds are recommended, and how to develop effective DSP strategies tailored to specific brand goals.

Sam also emphasizes the importance of product differentiation, page optimization, and integrating Amazon DSP into a cohesive multi-channel marketing approach to drive overall sales growth.

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Fav Quotes from Episode #341

Impact of Amazon DSP on Conversion Rates: “When we put DSP in the mix, it almost always increases conversion rate by like 50%. It's pretty substantial. There are a lot of different success stories for different reasons, to be honest. But one thing that I've seen is general brand lift, general conversion rates for products that qualify for DSP and have a decent amount of reviews. It's almost always going to work if you run it correctly." — Sam Lee, 00:10:13 - 00:10:38

How Non-Amazon Sellers Can Leverage Amazon DSP: “What's interesting is that with Amazon DSP, the most basic use case is you take product detail pages on Amazon. You serve those ads, people click, and they go through Amazon. But you can run any type of custom ads that you want as well. So general display ads, there are a lot of different formats, you can run them in. You can run display ads on and off Amazon that aren't Amazon-product-labeled. You can also run video ads across Twitch. You can run them on Amazon Prime Video, Freevee. A lot of open real estate on streaming TV and video. And when you're running ads outside of basic display ads on Amazon, you can direct those ads anyway. So if you want to be able to tap into Amazon's first-party data and you don't even sell on Amazon, you can do that.” — Sam Lee, 00:11:24 - 00:12:30

Importance of Holistic, Multi-Channel Marketing Approach: “Amazon ultimately is a demand capture platform, right? It can be a demand generation platform through things like video marketing. But at the end of the day, you need to drive demand for your product elsewhere also. So one huge mistake I've seen brands do is we'll be managing their Amazon and Amazon will be doing super well and their D2C isn't doing so hot, right? So they'll pull their marketing dollars out of D2C and plug them all to Amazon. Then their Amazon sales go down and their conversion rates go down because people ultimately, so much of Amazon traffic and your awareness and how many people are looking up your brand, it's because you're marketing it elsewhere than Amazon can capitalize.” — Sam Lee, 27:14 - 27:43

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3 Best DTC Practices from Sam Lee

1. Optimize your Amazon PPC before expanding to DSP

Before even considering Amazon DSP, make sure that your sponsored ads are operating at peak performance. Conduct an in-depth analysis of your PPC campaigns, identifying both strengths and weaknesses. Look for opportunities to refine your keyword targeting approach, adjust bids based on profitability, and experiment with various ad copy iterations to improve click-through rates and conversion rates.

By dedicating time and resources to perfecting your PPC strategy first, you'll establish a robust foundation for expanding your advertising efforts with DSP later on. Sam Lee suggests that having a monthly PPC spend of at least $10-20K is a good indication that you're ready to explore DSP. At this level of investment, you've likely achieved a certain degree of mastery over your PPC campaigns and are well-positioned to scale your reach through programmatic advertising.

Remember that it's important not to rush into DSP prematurely. If your PPC campaigns are still struggling to generate a positive return on ad spend (ROAS), adding DSP to the mix may only amplify those challenges. Focus on fine-tuning your sponsored ads until you consistently achieve your target ROAS, then gradually introduce DSP into your marketing mix.

2. Take a cohesive, multi-channel marketing approach

As Sam Lee notes, Amazon is a demand capture platform that works best when supported by a well-coordinated external marketing strategy. This means that for your Amazon strategy to work, you have to develop a comprehensive approach that integrates your efforts across PPC, DSP, and other relevant channels such as social media advertising, Google Ads, and email marketing.

Further amplify the impact of your multi-channel strategy by ensuring that your messaging and creative assets are consistent across all touchpoints. Surround your ICP with a unified brand experience to build brand awareness and drive higher-quality traffic to your Amazon listings.

3. Customize your DSP strategy based on product characteristics

When it comes to Amazon DSP, a one-size-fits-all approach rarely yields the best results. Your targeting approach should align with the specific attributes of the product you're promoting.

For higher-priced items that typically involve a longer decision-making process, retargeting can be a highly effective tactic. By serving ads to shoppers who have already shown interest in your product, you can keep your brand top of mind and gently nudge them toward a purchase.

On the other hand, lower-priced products with shorter buying cycles may benefit more from contextual targeting. For example, if you sell fitness supplements, you might target users who have recently searched for workout gear or viewed content related to healthy living.

In addition to price point, consider other product attributes such as review count, sales volume, and seasonality when customizing your DSP strategy.

Products with a high number of positive reviews may perform well with ad creatives that showcase social proof, while seasonal items may require a more aggressive targeting approach during peak demand periods.

Take the time to analyze the unique characteristics of each product and adapt your DSP tactics accordingly. This granular approach to optimization can help you improve your ROI, drive more sales, and ultimately grow your business on Amazon and beyond.