Amazon Demand Side Platform vs Sponsored Display: Advanced Advertising Guide

Amazon DSP and Sponsored Display are both display advertising options, but they serve different purposes, use different targeting methods, and work at different scales. Sponsored Display is self-service, available to any seller, and runs on Amazon properties. Amazon DSP is a programmatic platform that reaches audiences both on and off Amazon using Amazon's first-party data. Understanding when to use each (and how they work together) is critical for any advanced Amazon advertising strategy. At Marknology, our Kansas City team manages both DSP and Sponsored Display for hundreds of brands, and the combination consistently outperforms either alone.

Andrew Morgans makes the distinction clear: "Sponsored Display is the gateway drug to display advertising on Amazon. It is simple, accessible, and effective for retargeting and competitor targeting. DSP is the full platform. It gives you programmatic control, off-Amazon reach, and audience sophistication that Sponsored Display cannot match. Most brands should start with Sponsored Display and graduate to DSP when they are ready to invest in growth."

What Is the Difference Between DSP and Sponsored Display?

Here is the quick comparison:

• Sponsored Display: Self-service, available to all sellers, CPC or vCPM pricing, ads appear on Amazon, basic audience and product targeting, no minimum spend
• Amazon DSP: Managed or self-service (requires agency or $50K+ minimum), CPM pricing, ads appear on and off Amazon, advanced audience targeting using Amazon shopping data, video and OTT ad formats, programmatic buying

Think of Sponsored Display as the entry-level display ad product and DSP as the enterprise-grade programmatic platform. They complement each other rather than compete.

How Does Sponsored Display Work?

Sponsored Display is Amazon's self-service display ad product. Key features:

• Targeting options: Product targeting (show ads on specific product pages) and audience targeting (views remarketing, purchase remarketing, in-market audiences, interest-based audiences)
• Ad formats: Auto-generated display ads using your product image, title, price, and reviews. Custom headline and logo options.
• Placements: Amazon detail pages, search results, home page, Twitch (limited)
• Pricing: CPC (cost per click) or vCPM (viewable cost per thousand impressions)
• Access: Available to any professional seller or vendor through Seller Central or Vendor Central
• Budget: No minimum. Start with $10/day if you want.

Sponsored Display is the most accessible display ad format on Amazon. At Marknology, we run Sponsored Display for every client as a baseline display strategy.

How Does Amazon DSP Work?

Amazon DSP is a programmatic advertising platform. Key features:

• Targeting options: In-market, lifestyle, remarketing, competitor conquesting, lookalikes, advertiser audiences (first-party data), Amazon Marketing Cloud custom audiences
• Ad formats: Display banners, responsive e-commerce ads, video (in-stream and out-stream), OTT (Fire TV), audio (Amazon Music)
• Placements: Amazon.com, IMDb, Twitch, Fire TV, Amazon Music, thousands of third-party websites and apps
• Pricing: CPM (cost per thousand impressions)
• Access: Through Amazon managed service ($50K+ minimum) or agencies with self-service DSP access like Marknology
• Budget: Most agencies recommend $5K-$15K/month minimum to generate meaningful data

DSP is the tool you use when Sponsored Display is not enough. It opens up the full internet as your advertising canvas, powered by Amazon's shopping data.

How Does Targeting Compare?

This is where the gap between the two products is largest:

Sponsored Display Targeting

• Product targeting: specific ASINs or categories
• Views remarketing: people who viewed your product in the last 30 days
• Purchases remarketing: people who bought from you
• In-market audiences: broad category-level interest groups
• Interest-based audiences: lifestyle and interest categories

Amazon DSP Targeting

• Everything Sponsored Display offers, plus:
• Custom audience segments built from Amazon purchase data
• Competitor conquesting (target people who bought from specific competitor ASINs)
• Lookalike audiences based on your best customers
• First-party data uploads (email lists, website visitors)
• Amazon Marketing Cloud (AMC) custom audiences with complex behavioral rules
• Cross-device targeting across desktop, mobile, and connected TV

Sponsored Display targeting is like fishing in a pond. DSP targeting is like having a satellite map of every fish in the ocean and choosing exactly which ones to go after.-- Andrew Morgans, Marknology

Where Do Ads Appear?

Sponsored Display Placements

• Amazon product detail pages
• Amazon search results
• Amazon home page
• Twitch (limited inventory)

DSP Placements

• Everything Sponsored Display covers, plus:
• IMDb
• Fire TV (full-screen OTT ads)
• Amazon Music (audio ads)
• Thousands of third-party websites and apps through Amazon Publisher Services
• Mobile apps
• Connected TV beyond Fire TV

The off-Amazon reach is the biggest differentiator. DSP lets you follow customers around the internet with your brand message, then bring them back to Amazon to purchase. At Marknology, we see this full-funnel approach drive 20-40% higher total ROAS compared to Amazon-only advertising.

How Do Costs Compare?

• Sponsored Display CPC: Typically $0.50-$2.00 per click. Accessible for any budget.
• Sponsored Display vCPM: Typically $3-$8 per thousand impressions.
• DSP CPM: Typically $3-$15 for display, $10-$20 for video, $20-$40 for OTT.

Sponsored Display is more budget-friendly and has a lower barrier to entry. DSP requires more investment but provides more sophisticated targeting and broader reach. The cost per acquisition on DSP can actually be lower than Sponsored Display for retargeting campaigns because the audience targeting is more precise.

When Should You Use Each?

Use Sponsored Display When:

• You are starting with display advertising on Amazon
• Your monthly ad budget is under $10K
• You want basic retargeting of product page viewers
• You want to show ads on competitor product pages
• You need a quick, self-service setup

Use Amazon DSP When:

• You have maxed out Sponsored Products and Brands efficiency
• You want to reach customers off Amazon
• You need advanced audience targeting (competitor conquesting, lookalikes, first-party data)
• You are launching a new product and need mass awareness
• You want video or OTT advertising
• Your monthly display budget exceeds $5K

Use Both When:

Use both when you want full-funnel coverage. Sponsored Display handles basic retargeting and competitor targeting on Amazon. DSP handles advanced audience building, off-Amazon reach, and video/OTT. At Marknology, most of our advanced clients run both simultaneously.

How Do DSP and Sponsored Display Work Together?

The most effective strategy uses both products at different stages of the customer journey:

1. DSP for awareness: Use DSP to reach new audiences through in-market and lifestyle targeting with video and display ads on and off Amazon.
2. Sponsored Display for consideration: Use Sponsored Display to retarget product page viewers and show ads on competitor pages.
3. DSP for retargeting: Use DSP's advanced retargeting (cart abandoners, viewed-but-not-purchased) with tailored creative for each audience.
4. Sponsored Products for conversion: Capture the demand generated by DSP and Sponsored Display through keyword-targeted Sponsored Product ads.

This layered approach ensures you are reaching customers at every touchpoint. At Marknology, we call this the "full-funnel stack" and it is the advertising framework we build for every brand doing $1M+ on Amazon.

Andrew Morgans: "The brands that just run Sponsored Products are leaving 30-50% of potential sales on the table. The ones that layer on Sponsored Display and DSP create a system where customers see their brand everywhere. That is how you build a real brand on Amazon, not just a product listing."

What Are the Most Common Mistakes?

1. Running DSP before optimizing Sponsored Products. DSP drives awareness. Sponsored Products close the sale. If your PPC is not optimized, DSP traffic will not convert.
2. Treating Sponsored Display and DSP as interchangeable. They serve different purposes. Running both with the same strategy wastes budget.
3. Ignoring creative differentiation. Awareness ads, retargeting ads, and competitor conquesting ads should all have different messaging and creatives.
4. Not measuring holistically. DSP lifts Sponsored Products performance. Sponsored Display influences DSP retargeting pools. Measure total advertising impact, not individual campaign ROAS in isolation.
5. Starting DSP without strong listings. All the traffic in the world will not help if your product pages do not convert.
6. Underfunding DSP. Running DSP at $1K/month does not generate enough data to optimize. Either invest meaningfully ($5K+/month) or wait until you are ready.

Frequently Asked Questions

What is the difference between Amazon DSP and Sponsored Display?

Sponsored Display is self-service display advertising that runs primarily on Amazon. Amazon DSP is a programmatic platform that runs display, video, and OTT ads both on and off Amazon with advanced audience targeting.

Which is better, DSP or Sponsored Display?

Neither is universally better. Sponsored Display is ideal for basic retargeting and competitor targeting with any budget. DSP is better for advanced audience targeting, off-Amazon reach, and video advertising. The best strategy uses both.

Do I need an agency for Sponsored Display?

No. Sponsored Display is self-service and available to any professional seller through Seller Central. However, an agency like Marknology can optimize performance significantly through strategic audience selection and bid management.

How much should I spend on DSP vs Sponsored Display?

Most brands allocate 70-80% of display budget to DSP and 20-30% to Sponsored Display once they are running both. Start with Sponsored Display only, then add DSP as you scale.

Can I run DSP and Sponsored Display at the same time?

Yes. They complement each other. Most advanced Amazon advertisers run both simultaneously as part of a full-funnel advertising strategy.

What is Amazon Marketing Cloud?

Amazon Marketing Cloud (AMC) is a clean room analytics tool that lets advertisers analyze combined data from DSP and Sponsored Ads. It provides custom attribution models and advanced audience analytics.

What is a good ROAS for Sponsored Display?

Sponsored Display ROAS varies by targeting type. Product targeting typically sees 3-8x ROAS. Views remarketing sees 5-15x ROAS. Audience targeting sees 1-3x ROAS. Evaluate each targeting type separately.

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