First! What Are The Main Differences Between Amazon DSP and Amazon PPC?
Before we discuss when to use one over the other, I think it’s crucial that we’re all on the same page as to what Amazon DSP offers and what Amazon PPC offers.
Amazon DSP
- Usually paid for upfront for the duration you want to use it
- The biggest pool of audiences that Amazon offers
- This includes audiences ranging from Wholefoods Shoppers to lookalike audiences from your website off Amazon
- Speaking of, Amazon DSP has the ability to “tag” your website with a piece of code to evaluate the traffic to your website off Amazon
- This acts much like the Meta Pixel and Google Tag
- Dynamic Creative in the form of Responsive E-commerce ads
- These creatives are dynamically changed by Amazon to swap out the ASINs you’re advertising
Amazon PPC
- You pay when someone clicks your ad, or 1,000 people view your video
- Has the ability to target customers based on keywords, along with category targeting, product targeting, and retargeting
- Amazon now offers Streaming TV for traditional PPC advertising, which was primarily reserved for DSP users
- Utilizes both static images and video
It’s important to note that one is not necessarily better than the other. That said, lets discuss why you would use one over the other!
Ok, Now That We Know Some Differences, Which One Do I Use?
As in all things advertising, the answer is…it depends! Frustrating, right? However, here are three questions to ask yourself to understand which is the best option:
- What are my goals for my advertising?
- Am I trying to get more people to buy my product?
- Do people even know my product exists?
- I have a decent audience but want more people to know about my product and buy it
- Whats my advertising budget?
- Do you have a budget of $10k or more a month?
- Are you new to advertising or have been burned in the past and don’t want to commit a lot of money?
- Not sure?
- How big is your product catalog?
- Are you wanting to advertise all of your ASINs?
- Do you just have a handful of ASINs?
- Are you a bigger brand with a large catalog of products both on and off Amazon?
We will now go into each of these three main questions to help you understand which option is best!
Question One: What Are My Goals For Advertising?
In order to know if Amazon DSP or PPC is better, the first question you need to ask yourself is – what are my goals? What am I expecting once I give my money to Amazon advertising? If you are trying to get more people to buy your product and expect KPIs like ROAS, TACOS, and ACOS to be a certain way, I would not suggest DSP.
The main reason is that DSP cannot target audiences by keywords; instead, it mainly targets audiences based on their interests and shopping habits. Amazon DSP boasts a large access to audiences, which it does, but it targets audiences based on their shopping behavior. Amazon DSP categorizes these audiences as “in-market” and “lifestyle”. “In market” audiences are people who have purchased products in the niche you’re searching for. An example would be an “in-market” audience for multivitamins. “Lifestyle” audiences are broader than “in market” and are people who search for a certain product niche or have purchased in the past.
PPC advertising, on the other hand, can target audiences by keywords, which allows you to filter people by intent. PPC advertising also shows up on the front page of results when people search, along with product pages of your own product or competitors.
If your advertising goal is to grow your brand and let more people know you exist, or if you’re a new brand, DSP would be a great choice. The audiences that seemed too broad for conversion metrics are now very attractive because those are people interested in your niche but haven’t purchased yet!
For people who want more traffic and more sales, I recommend combining both. You would utilize PPC’s keyword targeting while leveraging DSP’s upper funnel audiences.
Question Two: What’s My Advertising Budget?
We’re on everyone’s favorite topic—money! Anyone who has ever spent money on advertising of any kind knows these platforms love a good budget. Amazon is no different, but your budget size will help you decide whether DSP or PPC is best for you.
As mentioned before, Amazon DSP has access to large audience pools. The number of people you want to reach is a foundational metric for evaluating the amount of money you spend on any campaign. This draws us to the correct conclusion that Amazon DSP is typically more expensive to utilize than PPC. The simple reason being you can reach more people which generally costs more money (on most platforms).
How much is too small for a budget? Again, it depends (*loud groaning from the back*). Having run plenty of campaigns for both PPC and DSP, I would say $5k for just DSP is the absolute minimum you need to be effective on a monthly basis. More money than that means you can effectively reach more of the great audience pools available to DSP.
If you have only a couple hundred dollars or a couple thousand a month, your money would best be utilized on PPC. You can better control your keyword costs by using shorter windows to advertise, like a week or two. DSP usually needs a solid two weeks to get running (which you’re paying for).
For advertisers with more than $5k to spend, I suggest running both congruently. Again, utilize DSP’s great audiences with more TOFU/MOFU tactics and PPCs BOFU placements.
Question Three: How Big Is My Product Catalog?
The last question to ask yourself is also the easiest! For advertisers with large catalogs (25+ products per brand), DSP is the place for you. The reason DSP is so great for large catalogs is the ease of setting up “campaigns” (called Orders and Line Items in DSP language). You can put all of the ASINs you would like to advertise in at the Order level (campaign level for PPC language) and then create one or two line items (ad groups) to advertise all ASINs.
Advertising large catalogs through PPC advertising can get hectic pretty fast with the amount of campaigns and ad groups.
One relevant benefit of DSP over PPC is that you can create line items (ad groups) targeting people only on mobile or desktop. This means you can advertise your large product catalog to one or the other, or both!
A pro tip is to separate those placements out, see which one performs better, and then put more money towards the winning placement.
I should also say that even if you have one product, you can still advertise it on DSP.
Conclusion!
Like all things advertising, many factors are at play, and there are few hard rules to abide by. If you have $5k or more to spend in a month, broad advertising goals, and a sizeable product catalog, you will want to utilize both Amazon DSP and PPC. In my experience, it’s rare for a brand to use DSP alone without PPC. Even brand-new products that just want to get as much exposure as possible will also run PPC ads due to the keyword targeting capabilities.
Next time you’re considering which advertising to use, remember to know your goal, your budget, and how many ASINs you want to advertise.
If you have additional questions or want us to help you on your Amazon journey, don’t hesitate to get in touch with the BellaVix Team.
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