Amazon’s DSP is gaining traction because it pitches agencies a self-service option, low fees and most importantly, unique commerce and purchase data that advertisers crave. Data from three ad-research firms indicates that Amazon’s DSP is gaining adoption among ad buyers and its market penetration is in the same ballpark as Google’s DSP DoubleClick Bid Manager.
“Campaigns just perform better on Amazon than on any other DSP, as targeting an audience based on known shopping history outperforms contextual relevancy of an ad,” said Abe Curry, a senior strategist at ad agency Possible, who previously spent four years at Amazon managing advertiser accounts.
A year ago, Amazon’s DSP wasn’t popular enough for research firm Advertiser Perceptions to include Amazon in its survey about DSP usage. But in its most recent survey of 700 ad buyers, Amazon tied Google for having the highest adoption rate among agencies. Amazon declined an interview request for this story.
The number of brands using Amazon’s DSP has grown nearly 50 percent this year, more than any other buy-side tech platforms, according to MediaRadar (it wouldn’t say how many brands were actually using the DSP, though). Pathmatics data shows that only Google has more websites featuring its buy-side ad tech tags than Amazon.
Similar to how chips are merely a conduit for guacamole, the data that lives within the DSP, not the ad-buying platform itself, is what advertisers seek. Advertisers who want to upload their own data or rely on aggregators like Acxiom are more apt to use DSPs like The Trade Desk or MediaMath for those campaigns. But when programmatic ad buyers want robust user data they can’t get anywhere else, they tend to turn to Amazon and Google, said Nichola Perrigo, director of digital marketing at ad agency RPA.
“In Amazon’s case, the data is great, especially for Amazon commerce partners, and the tech is good enough,” said Adam Heimlich, svp of programmatic at media at media-buying shop Horizon.
Amazon has gotten a lot of attention lately for sinking its hooks into the media industry. The e-commerce giant is growing its sales team, courting video publishers, getting frequently mentioned during quarterly earnings calls and hiring 2,000 people to work in its new office in New York City.
But while the internet behemoth makes headlines for getting Academy Awards, Amazon has been growing the unsexy side of its business to become a powerful force in ad tech. Aside from its growing DSP business, the company is opening up self-service programmatic ad products and offering training programs to make direct connections with ad buyers. Its Transparent Ad Marketplace is the most popular server-to-server wrapper in the ad industry, according to a ServerBid study.
Amazon’s DSP growth is happening while ad buyers are cutting back the number of DSPs they use. A major reason the DSP herd is thinning is because self-service is on the rise in ad tech, as marketers try to trim fees by moving from high-margin managed-service vendors to low-margin self-service vendors.
Amazon has benefited from this trend. It pitches agencies a self-serve model, and its DSP fees are among the lowest in the market, said John Lockmer, director of programmatic ad operations at marketing consultancy DuMont Project.
While Amazon’s DSP has become more popular, it also has drawbacks for buyers.
Certain types of targeted ads can only be used if they drive users back to Amazon pages, and it restricts ads from sending users to other retailers, Lockmer said. For example, ads bought with Amazon’s DSP won’t link out to Costco.com, but they can link out to a site for a specific brand like Nike.com.
The reporting on Amazon’s DSP also lacks full transparency, and its dashboard is harder to navigate than other DSPs, said Dan de Sybel, CTO of programmatic agency Infectious Media, which stopped using Amazon’s DSP a few months ago due to its lack of transparency. But despite these flaws, many agencies continue to use the platform.
“For brand objectives, you don’t need a smart campaign set up; it’s all about the data,” he said. “That’s why uptake of its DSP has been expanding rapidly.”
Why a CBD brand is experimenting with OOH advertising to counter e-commerce buzzkills
As the digital marketing landscape continues to be murky for niche brands, CBD brand Sunday Scaries looks to OOH as a workaround.
How work-anywhere trend helped Vista attracted senior talent from heavy hitter brands
A remote-first, flexible working operating model has enabled Vista to snag top talent from major brands like Nike, Spotify, Converse and Netflix in the last year.
Quontic Bank’s metaverse outpost demonstrates the importance of brand utility in metaverse activations
Legal concerns notwithstanding, Quontic’s plans for its Decentraland location show that the bank is approaching the metaverse as a functional space for every day use, rather than an escape from reality.
SponsoredHow marketers and retailers are unlocking the true value of retail media
Ben Kneen, senior director of product management, Xandr It’s a challenging time for retailers in the advertising industry. As they cope with supply chain woes and inflation-related pressures, they seek high-margin revenue streams amid evolving privacy regulations and massive shifts in identity solutions — including IDFA, the deprecation of third-party cookies and more. In light […]
‘Cost conscious consumers, restrictive economy’: Advertising’s tough ride in 2022
The big issue for advertisers from an ad spending impact isn't the war in Europe. It’s the supply chain woes emanating from china, the pandemic and the lockdown
In-game advertising experts question Microsoft and Sony’s gaming advertising plans
The importance of free-to-play titles is one reason why some in-game advertising experts are skeptical about the tech giants’ ability to succeed in their chosen business.