Learning how Amazon DSP works could be a powerful advertising tool that enables Amazon sellers to reach highly targeted audiences with programmatic ads.

With DSPs, Amazon sellers can expand their brand visibility and drive sales off-platform, especially when they learn how to use the more advanced features that offer greater control and precision over ads.

Many sellers rely on Amazon PPC, but DSP takes it up a notch by enabling advanced retargeting, audience segmentation, and even reaching shoppers who haven’t visited Amazon but fall into interest-based or demographic categories relevant to your products.

Sellers with an edge on DSP understand how to maximize budgets, avoid audience fatigue, and maintain a solid return on ad spend (ROAS) through careful campaign structuring and ongoing optimization.

Here’s a closer look at some advanced tactics that can transform DSP (Demand-Side Platform) from an expense to an ROI-generating engine.

Why Amazon DSP Goes Beyond Sponsored Ads

Amazon DSP offers unique ad placements that give sellers access to both Amazon’s on-site inventory and high-quality off-site placements across the web, including Amazon-owned sites like IMDb, as well as other third-party networks.

This reach extends beyond users who are actively searching on Amazon, allowing you to engage with people who might have shown intent or interest outside the platform but haven’t yet been exposed to your products.

This is particularly useful for mid-to-high-funnel strategies, as DSP ads allow you to target users who may not yet be in a purchasing mindset but are likely candidates for your product.

For sellers looking to move beyond keyword targeting and scale their reach, DSP enables precise audience targeting that can be segmented by browsing history, past purchases, or demographics.

Setting Up a High-Performance DSP Campaign

Sellers who excel with DSP know that setting up campaigns involves strategic, layered targeting that reduces wasteful ad spend and maximizes relevance.

Here are several advanced targeting options within Amazon DSP that can significantly impact your campaigns:

Audience Retargeting:

One of the most powerful uses of DSP is audience retargeting, which lets you reach people who have already interacted with your brand or products in specific ways.

For instance, you can retarget those who viewed a product detail page but didn’t buy, segmenting these users further by the time frame (like within the last 7 days vs. 30 days).

This allows for laser-focused remarketing that nudges warm leads down the funnel. Sellers with high volumes can also layer this with additional criteria, like targeting only those with a history of higher-priced purchases.

Lookalike Audiences:

Amazon DSP provides a way to create lookalike audiences based on your current customers or high-value visitors.

By analyzing past purchasing behavior and engagement patterns, you can serve ads to potential customers with similar profiles.

This approach allows sellers to avoid competing directly with other brands targeting generic keywords and instead reach an audience more likely to convert based on shared behavioral attributes.

Lifestyle and In-Market Segments:

Beyond traditional demographics, DSP’s in-market and lifestyle segments let you target users based on their shopping and browsing habits across Amazon.

This approach is particularly effective for cross-selling complementary products or capturing interest in niche categories.

Contextual and Video Targeting:

Video ads and contextual placements on Amazon DSP give sellers tools to visually engage audiences in ways that PPC alone can’t.

High-quality video content, served to shoppers while they browse Amazon or watch content on IMDb, is ideal for brand-building, offering sellers the chance to demonstrate their product in action and generate familiarity before the purchase decision.

Frequency Cap Management:

A less obvious, yet crucial component of DSP management is setting frequency caps—the maximum number of times an ad is shown to a user within a specific timeframe.

High-frequency exposure can lead to audience fatigue, which not only wastes your ad budget but can also harm your brand’s image.

Skilled DSP advertisers carefully balance frequency to maintain visibility without overloading users, particularly when retargeting.

By adjusting these caps, sellers can avoid the diminishing returns that come from overwhelming their audience with ads.

Avoiding Ad Spend Burn: Common Pitfalls in Amazon DSP

A common pitfall is neglecting performance tracking and optimization after initial setup.

Amazon DSP requires continuous data analysis and adjustments to ensure high performance. Here are a few areas that sellers should be mindful of:

Audience Overlap:

With DSP’s vast reach, it’s easy to accidentally overlap audiences, especially if you’re running multiple campaigns.

For instance, having overlapping audiences in retargeting and prospecting campaigns can lead to higher-than-necessary costs without delivering incremental value.

Regularly reviewing audience settings and performance data can prevent budget cannibalization and ensure campaigns are complementary rather than competitive.

Attribution Over-reliance:

Amazon DSP uses a 14-day attribution window, which means purchases made up to two weeks after an ad view are credited to the campaign.

This attribution model can inflate ROAS for DSP campaigns, as some of these conversions may happen organically or from other touchpoints.

Experienced sellers understand that blending DSP metrics with organic and PPC data provides a more accurate view of true performance and prevents overspending based on inflated numbers.

Under-utilization of Ad Creative Variety:

While DSP allows for different types of ads, such as static, video, and custom placements, some sellers stick to a single format or creative style across all campaigns.

This reduces effectiveness, especially in multi-funnel campaigns where the same creative shown repeatedly can lead to banner blindness.

Rotating creatives and using A/B testing to identify the highest-performing ad types will yield more effective results and maximize engagement.

Pro-Level Strategies for Maximizing Amazon DSP ROI

Cross-Platform Retargeting: For sellers using both Amazon DSP and Google Ads, cross-platform retargeting can be a powerful way to stay top-of-mind.

By creating segmented audiences on Amazon DSP, you can retarget these audiences on other platforms (such as Google or Facebook), ensuring your product remains in sight during the research and decision-making phases.

This omnichannel approach boosts brand recall and enhances your chance of capturing conversions outside of the initial Amazon touchpoint.

Geo-targeting for Seasonal and Regional Relevance: DSP’s geo-targeting capabilities allow sellers to tailor ads to specific regions, which is especially useful for seasonal products or location-specific marketing.

During winter, for example, sellers with products suited to colder climates can target northern regions with higher ad bids, while lowering or turning off ads in warmer areas.

This not only increases relevancy but also conserves budget by showing ads only in high-potential areas.

Custom Audience Lists: DSP permits the use of custom audiences—based on a seller’s own customer data or CRM list—allowing more precise retargeting.

This strategy works well for launching new products to an already engaged audience or re-engaging high-LTV customers with loyalty-focused campaigns.

Experimenting with New-to-Brand Metrics: For sellers focusing on brand growth, the “New-to-Brand” metric within Amazon DSP is a valuable tool.

This metric identifies the percentage of orders from customers who haven’t purchased from your brand within the last year.

Tracking and targeting these customers with loyalty-based messaging can help increase customer retention.

Moreover, by focusing on new-to-brand metrics, you can measure long-term customer acquisition impact instead of purely focusing on immediate conversions.

Optimization Through Dayparting: Although DSP doesn’t have built-in dayparting features, sellers can still use historical data to optimize by manually adjusting budgets during high-converting times.

This requires close analysis of when DSP ads tend to perform best based on ROAS and adjusting spend allocation accordingly.

For example, brands targeting professionals might prioritize weekday ad spend, while family-oriented products might perform better on weekends.

Optimizing the DSP Funnel: Driving High-Intent Traffic to Your Amazon Store

Experienced sellers can take DSP to the next level by directing traffic to curated landing pages or Amazon Stores instead of individual product pages.

This approach is especially effective when combined with Amazon’s Brand Analytics data, as it provides a better understanding of customer journeys and cross-product interest.

By directing traffic to a broader store page, you can capture customers interested in a range of products, potentially increasing average order value and exposure to new items.

For instance, a beauty brand could drive DSP traffic to its main Amazon Store, giving potential customers the chance to explore multiple products in the skincare category instead of limiting them to a single product detail page.

This maximizes customer exploration and encourages cross-selling.

Mastering Amazon DSP involves more than just setting up a few campaigns; it requires continual refinement, strategic audience targeting, and smart optimization to achieve real results.

For sellers ready to amplify their brand reach and drive consistent conversions, DSP’s suite of advanced tools offers a way to engage potential buyers with precision and relevance.