Amazon’s advertising acceleration drive includes a partnership program to reduce operational costs

Amazon Ads is further opening up to third parties, signing partners to its latest beta program, which involves its demand-side platform telling them what supply it needs and when it needs it more efficiently than historical practices. 

The nascent program involves Amazon DSP’s trading partners employing its “Dynamic Traffic Engine” to signal what types of ad inventory they have on offer at specific times by sending “low demand” or “high demand” signals to one of the industry’s largest trading platforms.

Those taking part in the beta include supply-side platforms Index Exchange, TripleLift, and Yieldmo, with the participants claiming the development lets the DSP refine its inventory bidding in a more sophisticated manner, helping them to streamline their operating costs.   

Dynamic Traffic Engine lets SSPs shape traffic, meaning they only send the supply that is likely to generate an impression, helping SSPs optimize their allocated query-per-second (QPS) capacity and networking costs, according to the Amazon Ads team.

“By being more prescriptive about the traffic we want and eliminating the guesswork for both buy-side and sell-side, Dynamic Traffic Engine helps improve inventory management and reduce network and compute costs for SSPs,” said Chris Conetta, head of supply, buyer services, Amazon Ads. 

Ed Dinichert, chief revenue officer at TripleLift (and former Amazon executive), explained how the partnership marks a departure from previous norms. “There’s a lot of waste in the way DSPs and SSPs have been working in the past,” he said, explaining how the term “fat pipes” is commonly used to describe inefficiencies whereby trading partners “blast” or “listen” to all bid requests on a given platform. 

This can lead to an escalation of QPS costs and reduce profitability for those involved in programmatic media trading, with Dinichert explaining how “finer data work and more specific signals” can help improve performance. 

Performance+

The latest beta forms part of Amazon DSP’s wider Performance+ program, a scheme understood to be headed by Brain Tomasette and designed specifically to woo non-endemic advertisers toward one of the big three DSPs.

Google DV 360, The Trade Desk, and Amazon DSP are the most used DSPs (in no particular order), with two in three U.S. programmatic buyers preferring one of these three DSPs — a portion that’s remained consistent over the past couple of years, according to data from Advertiser Perceptions.

Many in the industry acknowledge Google’s DSP as the leader in the sector, albeit Advertiser Perceptions notes how Amazon has been on the rise in recent years, with nearly two in three advertisers now using Amazon’s DSP. 

“Contributing to the rise of Amazon DSP: the growing demand for retail/commerce media and data,” according to Advertisers Perceptions, which also noted that this trend has also given a boost to Walmart’s DSP as well. 

“A growing number of non-endemic advertisers that are now tapping into it for its increasingly expanding portfolio (especially with regard to CTV) and continued enhancements to measurement and self-service capabilities,” cited Advertisers Perceptions.