Most Amazon sellers know Sponsored Products. You bid on keywords, your product shows up in search results, and you pay when someone clicks. It works. But it only reaches shoppers who are already searching for what you sell. Amazon DSP (Demand-Side Platform) is a different animal entirely. It lets you reach audiences before they search, after they leave Amazon, and even when they're browsing completely unrelated sites and apps. The targeting runs on Amazon's first-party shopping data, which is the most purchase-predictive audience data in advertising.
Amazon DSP is a significant and growing portion of Amazon's total advertising business, which exceeded $69 billion in revenue in 2025 (Amazon earnings reports), making it one of the largest DSPs alongside Google's DV360 and The Trade Desk. The platform is growing fast because it solves a problem no other DSP can: targeting based on what people actually buy, not just what they browse or "like."
Amazon DSP vs. Sponsored Products/Brands
These are fundamentally different advertising products. Understanding the differences prevents you from expecting DSP to perform like Sponsored Products (or dismissing it when it doesn't).
| Factor | Amazon Sponsored Products / Brands | Amazon DSP |
|---|---|---|
| Ad placement | Amazon search results and product pages only | Amazon properties + thousands of external sites, apps, and streaming (Twitch, IMDb, Fire TV, third-party exchanges) |
| Targeting | Keywords, product targeting, category targeting | Behavioral audiences, in-market segments, lifestyle, retargeting, lookalikes, custom audiences |
| Pricing model | CPC (pay per click) | CPM (pay per thousand impressions) |
| Funnel position | Bottom-funnel (high purchase intent) | Full-funnel (awareness, consideration, and retargeting) |
| Seller requirement | Must sell on Amazon | No Amazon seller account required (can drive to your own site) |
| Minimum spend | No minimum | Self-service: no minimum. Managed service: historically $50K+, now varies by region and partner. |
| Ad formats | Sponsored product listings, headline banners, video in search | Display banners, video, OTT/streaming TV, audio (Amazon Music), responsive e-commerce ads |
| Attribution | Click-based, 7-day or 14-day window | View-through and click-through attribution, customizable windows |
| Typical ROAS | 3x-7x (bottom-funnel, direct response) | 2x-4x (includes upper-funnel campaigns with longer conversion paths) |
How Amazon DSP Targeting Works
Amazon's targeting advantage comes from first-party shopping data. While other DSPs rely on cookies, device IDs, and probabilistic matching, Amazon knows what 310+ million active customers actually purchase. That data fuels several targeting types:
- In-market audiences: People actively shopping in your product category. Amazon identifies this based on search history, product page views, and add-to-cart behavior in the last 30 days.
- Lifestyle audiences: Broader segments based on long-term purchase patterns. "Health-conscious consumers" or "premium home goods buyers" based on months of purchase history.
- Retargeting: Reach people who viewed your product, added to cart but didn't purchase, or bought from you previously. Amazon DSP retargeting converts at 2-3x the rate of prospecting (Perpetua, 2024).
- Lookalike audiences: Find new customers who share purchase behavior patterns with your existing buyers. Amazon's lookalikes outperform most third-party lookalikes because they're built on actual purchase data.
- Competitor conquesting: Target shoppers who viewed or purchased competitor products. This is one of the most popular DSP use cases for challenger brands.
When to Use Amazon DSP
DSP isn't for every brand. It makes the most sense in these scenarios:
- You've maxed out Sponsored Products. If your Sponsored Products campaigns are running at efficient ACoS and you've captured most of the high-intent search demand, DSP opens up the next layer of potential customers.
- You're launching a new product. New products have no search history and rank poorly organically. DSP awareness campaigns can drive initial product page views that feed the organic ranking algorithm.
- You want to retarget cart abandoners. Amazon's retargeting through DSP reaches shoppers after they leave Amazon. Sponsored Products can't do this.
- You sell off-Amazon too. DSP can drive traffic to your own DTC site using Amazon audience data. This is valuable for brands that want Amazon's targeting without Amazon's marketplace fees.
Example: Amazon DSP Driving Full-Funnel Growth
A supplement brand used Amazon Sponsored Products for two years but plateaued — they'd captured most of the search demand in their category. Amazon DSP opened the top of the funnel. They ran display and video ads targeting health-conscious shoppers who hadn't searched for their product yet, then retargeted site visitors who browsed but didn't purchase. Over six months, their new-to-brand customer rate increased by 35%, while their overall ACoS stayed under 25% (below the Ad Badger 2025 benchmark average of 30.4% ACoS across all Amazon categories). The key was treating DSP as a complement to Sponsored Products, not a replacement — DSP generated awareness, and Sponsored Products captured the resulting search demand.
Common Amazon DSP Mistakes
- Expecting Sponsored Products ROAS. DSP includes upper-funnel campaigns that influence purchases over days or weeks. Judging DSP by the same ROAS targets as bottom-funnel Sponsored Products will always make DSP look inefficient. Evaluate DSP on metrics like new-to-brand percentage, detail page view rate, and total sales lift (including organic).
- Ignoring view-through attribution. Many DSP conversions happen when someone sees your display ad, doesn't click, but later searches for your product and buys. If you only measure click-through conversions, you're undercounting DSP's impact by 40-60%.
- Running only retargeting. Retargeting is the easiest DSP win, but it has a ceiling. You're only retargeting people who already found your product. Without prospecting campaigns feeding the top of the funnel, your retargeting pool shrinks over time.
- Poor creative. DSP display ads compete for attention against editorial content and other brands. Static product-on-white images perform poorly. Invest in lifestyle imagery, clear value propositions, and strong calls to action.
Frequently Asked Questions
Do I need to sell on Amazon to use Amazon DSP?
No. Amazon DSP can drive traffic to any website. DTC brands, B2B companies, and even brands not sold on Amazon use DSP for its audience targeting capabilities. That said, brands selling on Amazon see the strongest results because the entire purchase loop stays within Amazon's attribution system.
What's the minimum budget for Amazon DSP?
Amazon opened self-service DSP access in 2024, removing the previous $35,000-$50,000 minimum for managed service. Self-service has no official minimum, but most practitioners recommend at least $10,000-$15,000/month to generate enough data for meaningful optimization. Below that, the algorithm doesn't have enough signal to learn effectively.
How does Amazon DSP compare to The Trade Desk or DV360?
The Trade Desk and DV360 offer broader inventory access and more advanced buying controls. Amazon DSP's advantage is its exclusive first-party purchase data. If your primary goal is reaching shoppers likely to buy consumer products, Amazon's data is unmatched. If you need advanced CTV buying, complex multi-touch attribution, or access to premium publisher inventory outside Amazon's exchange, The Trade Desk or DV360 may be stronger choices.
Can I run DSP and Sponsored Products at the same time?
Yes, and you should. They serve different funnel stages. Sponsored Products captures high-intent search demand. DSP builds awareness and retargets shoppers who don't convert on first visit. Amazon's own case studies show that brands running both formats together typically see meaningfully higher total sales than brands running Sponsored Products alone, since each format addresses a different part of the customer journey.