Advertising in Q4: Rising CPCs and Major Shift Away Facebook to Amazon DSP Ads

The Q4 advertising season is here. And you know what that means: It’s time to cash in on the shopping frenzy! But before you get all excited, we should add that CPCs are going to be notoriously high this quarter.

Historical trends show that advertising activity intensifies during the holiday season, with countless businesses competing for shoppers’ attention. For example, a recent study revealed that social media ad spending across nine different sectors increased by 33% in Q4 2020 compared to the levels reached the quarter before.

Consequently, CPC rose 9% year-on-year globally, with click costs for ads placed in the Facebook News Feed experiencing a particularly large increase.

So, no matter what keywords you target, there’s going to be a business or two (or 10) bidding for the same. This means you’ll need to bid a higher amount to get a position in the limited ad space—which will lead to higher per-click costs.

We will also see a paradigm shift in the choice of advertising platforms—a move away from Facebook ads towards Amazon DSP ads. One reason is the privacy changes that prevent Facebook from tracking iPhone users without gaining their consent.

Specifically, Apple has prohibited certain data collection unless people opt into tracking via a prompt. The majority of them chose to opt out, affecting Facebook’s ability to track information such as what websites consumers are visiting and what they are searching for. Less information makes it harder for Facebook to tailor its ads to help companies find their most targeted customers.

To mitigate the loss of effective targeting, businesses are turning to Amazon DSP.

Amazon DSP enables advertisers to target users based on a rich array of first-party data. The best part is they can promote their brands, products, or services on sites all across the internet.

Amazon is also shielded from Apple’s privacy changes because it doesn’t rely on third-party information to analyze shopper intent. Much of its user-specific data comes from Amazon properties and is considered first party, so it is not subject to the new iOS privacy requirements.

Never heard of Amazon DSP? Here’s everything you need to know about this hidden gem of the Amazon Advertising ecosystem.

What is Amazon DSP?

DSP is Amazon’s demand-side platform. It allows you to programmatically buy ads to reach diverse audiences across the web. With Amazon DSP’s console, you can target people using first party data exclusively accessible via Amazon.

Amazon DSP ads are not only limited to the Amazon marketplace—you can also choose to display them on other websites, social media platforms, smartphone apps, and video streaming stations. Any seller or third-party vendor can use Amazon DSP to direct consumers to their businesses.

The Different Types of DSP

Currently, Amazon DSP offers four types of ads:

• Static ads: Static ads rely on predetermined visuals, content, and calls-to-action. A simple graphic is at the center of this ad, which takes people who click to a product page, custom page, or Amazon storefront.
• Dynamic ads: Dynamic ads can automatically adjust the advertising creative based on specific factors. The ad’s content optimizes itself to suit the target audience, choosing from a selection of graphics, calls to action, and messages based on what a customer searches for or where they see the ad. Dynamic ads can only take visitors to an Amazon product listing page, so they’re not suitable for increasing brand website traffic.
• Video ads: Video ads come in two forms on Amazon DSP. First, you can show an ad within some video content (in-stream) or show it as part of a display ad (out-stream). These ads can lead to your website or product information pages. You can also use Amazon audience targeting to ensure you show your ads to the right customers.
• OTT ads: OTT video advertisements are full-screen ads capable of reaching millions of consumers on connected TV platforms such as Prime Video. These ads are usually non-clickable, so they don’t send customers to a page. However, they can also be non-skippable, making them ideal for brand awareness campaigns.

How Do You Access Amazon DSP?

There are two ways to launch an Amazon DSP campaign:

• Amazon Managed
• Manage Self-Service

The first option is great for those who want to leverage the Amazon DSP inventory but have limited programmatic experience. However, you’ll need to spend a minimum of $35,000 to access Amazon Managed advertising. The minimum spend varies depending on the country you’re based in (for instance, it’s a $10,000 minimum for advertisers in the UK).

Alternatively, if you’d prefer to handle your DSP advertising alone, there’s the “Managed Self-service” option. The only way to access Self-service Amazon DSP is through a third-party agency. However, this route will give you more control of your campaigns and impose fewer restrictions on how much you need to spend.

How Targeting Works on DSP

The most valuable feature of Amazon DSP advertising for most sellers is advanced targeting. Amazon DSP supports a range of advertising objectives, so you can use it to target audiences who showed interest in your product before or build awareness among new clients.

Within the Amazon DSP console, users can access thousands of customer segments, along with in-depth insights into shopper intent and purchasing history. Some of the targeting options you can use with Amazon DSP include:

• Behavioral: Targeting based on specific actions displayed by Amazon customers in the last 30 days, such as searching for a certain item.
• Lifestyle: Customers are targeted according to specific characteristics, such as a tendency to buy many beauty products regularly or a pattern of buying eBooks. Targeting customers based on lifestyle means you can match the actions of your existing customers to those of potential leads.
• Contextual: With contextual segmentation, you can find customers who show an interest in your product by visiting websites thematically related to whatever you sell. You can target users who haven’t purchased yet by serving ads on pages and articles mentioning specific topics.
• Remarketing: This option involves targeting customers who previously came close to buying your product or a competing product. It can also include customers who abandon your product in their checkout basket or add it to a wish list.
• Audience lookalike: With lookalikes, you focus on people who shop similarly to other target groups (like your current customers). You can also build lookalikes based on competitor customer lists.
• Advertiser audiences: Amazon DSP allows users to upload current customer data and target ads using pixels, CRM data, DMP audience transfers, and more.
• Demographic targeting: Targeting based on age, gender, region, or income.
• Device targeting: Targeting based on specific devices, like Apple or Android phones, desktop computers, or smart televisions.
• In-market targeting: With In-Market targeting, you target people more likely to be interested in your product. For instance, a beauty supply company might target people listed as beauty product sellers on Amazon.

Where Do Amazon DSP Ads Appear?

Amazon DSP ads may appear on:

• Amazon: Including Amazon Live, the Amazon homepage, product detail pages, review pages, search pages, thank you pages, and deals pages.
• Amazon-owned websites: Such as Goodreads, Audible, Shopbop, IMDB, Buy Office Mojo, and Zappos.
• Amazon-owned applications: Like Audible, Amazon Music, and the Kindle app.
• Amazon-owned devices: Including Amazon Echo, Fire tablet, Fire TV, and Kindle.
• Affiliate properties: Such as websites and apps in the Amazon network.

Where Are the Customers Redirected After They Click the Ads?

Video DSP ads can redirect a user to:

• Your brand’s website
• An Amazon product detail page
• Any website on the internet

Display ads, on the other hand, can send users to your store, customized landing page, product detail page, or an external website.

Getting Started with Amazon DSP

If you’d like to advertise through Amazon DSP, you have two options:

1. Let Amazon manage your DSP with a $35,000 minimum budget (plus additional line item minimums)
2. Use the self-serve option for Amazon DSP while partnering with a specialist like BBE.. The minimum budget is $5k, with line item minimums excluded. However, we recommend $10k/month to effectively leverage the platform.

If you want to target audiences on Amazon and non-Amazon properties while spending less overall, BBE is the road to success. You’ll also get reports that measure various KPIs to help you track progress toward your advertising goals.

So, if you’re ready to expand into DSP, sign up for a free analysis to learn how you can leverage Amazon advertising to increase your sales potential this holiday season.