Amazon DSP Business Case: Quantifying Success

Amazon’s demand-side platform (Amazon DSP) enables advertisers to programmatically buy display and video ads that target shoppers near the top of the sales funnel. Although this part of the funnel remains crucial for building awareness among shoppers, many companies find it difficult to make a business case for Amazon DSP.

In this post, I’ll walk through the metrics we use here at content26 to show the full-funnel impact of DSP on Amazon business. We’ll also share how we’ve made an Amazon DSP business case for one of our clients.

Bringing Full-Funnel Attribution to Amazon

The targeting capabilities of DSP make this advertising program otherworldly; reaching consumers that are in-market for products in your product category; targeting consumers that have purchased products within this category in the past year; and segmenting these targets according to household income.

But even with the vast potential of this program, it can be difficult to make an Amazon DSP business case by only looking at the metrics available within the Amazon DSP platform.

In fact, relying on standard measures such as sales and spend provide a narrow shopper journey, and fail to illustrate the greater effect the campaign is having on overall sales.

Going Beyond Last-Click Attribution

Imagine a shopper sees an Amazon DSP ad at the top of CNN.com for a Brother printer. Instead of clicking on the ad, the shopper manually goes to Amazon and types in the brand name to discover the brand’s assortment. They see the search results and click on the first sponsored ad or the first organic result. Even if the consumer had clicked on the DSP ad prior, due to last-click attribution, the sale would be counted toward the sponsored ads campaigns.

Or, let’s say the shopper clicks on the Brother printer ad on CNN.com. They see the ad a few more times over the course of the next week, but don’t decide to buy yet. Eventually they end up going Amazon to buy the printer, but don’t make the purchase within the 14-day attribution window of the display ad click.

There are myriad scenarios not captured in the provided Amazon DSP metrics that could form the foundations for a strong Amazon DSP business case.

But that doesn’t mean marketing teams are out of luck. By combining data that’s available in Amazon Advertising through Sponsored Products and Sponsored Brands as well as channel sales data, brands can paint a picture of what their full sales funnel actually looks like.

Full Funnel Metrics for DSP Campaigns

Understanding DSP requires going beyond standard metrics such as spend, sales, DPVR (Detail Page View Rate), CTR (Click Through Rate), ATC (Add to Cart), ROAS (Return on Ad Spend), and Units Sold.

Here are 10 data points brands can examine that offer a more comprehensive view of the full funnel effect of Amazon DSP:

  1. Branded Search (Sponsored Brands, Sponsored Products) Impressions
  2. Branded Search ACoS
  3. Branded Search Sales
  4. Branded Search Click Through Rate
  5. Full ACoS (DSP Spend + Branded Search Spend) / (DSP Sales + Branded Search Sales + Organic Sales)
  6. Organic Sales Growth (Channel Sales – Ad Sales) over time
  7. Organic Sales
  8. Overall Channel Sales
  9. Channel Sales Growth
  10. Search Rank

This form of advertising has a full-funnel effect that influences every step of the purchase journey—from awareness to sales. By examining additional data points outside of the traditional Amazon DSP metrics, brands can begin to see the more nuanced ways DSP is positively affecting sales.

The rest of this post will look at these Amazon DSP metrics in more depth.

Branded Search Metrics

One way to make an Amazon DSP business case is to see if branded search metrics are increasing while branded search ACoS remains the same. This trend implies that consumers are seeing the ad, navigating to Amazon, searching for your brand, and clicking on an ad. If we’re able to see growth in branded impressions, branded clicks, and branded sales while branded ACoS changes at a smaller delta, this is a sign that DSP is having a positive effect on your branded campaigns sales funnel.

Metrics examined:

  • Branded Search Impressions
  • Branded Search Sales
  • Branded ACoS

Sales Metrics

Another measure of success is to see if organic sales increase over time. Organic sales are calculated by subtracting ad sales from channel sales, and then comparing the time period before DSP is run with the time period when DSP is active. If you’re looking to determine the effectiveness of DSP, check the organic sales once DSP has ended. We’ve seen a lift in organic for up to 45 days after campaigns have finished.

Metrics examined:

  1. Organic Sales
  2. Channel Sales
  3. Organic Sales Growth

Single Metrics that Can Make an Amazon DSP Business Case

Search Rank

An individual metric that offers useful insight is the search rank of your branded terms. If we know that search rank is improving, then we can extrapolate that your branded terms are relatively more popular when compared with other search terms and are becoming more top of mind when consumers search on Amazon. An improved search rank means that your sales funnel is growing because more people are searching for your brand, regardless of whether they click on an ad or an organic listing.

Full Advertising Cost of Sale

Full advertising cost of sale (full ACoS) will also show you if your DSP investment is profitable on the Amazon Marketplace. Put simply, advertising influences channel sales, and the most direct metric that affects channel sales is ad sales. But with DSP, measuring organic sales is equally important, as it will encompass all methods in which a consumer can find and buy your products. This measurement is also the most tangible, in that if you spend $50,000 across DSP and branded campaigns, and then receive $500,000 in sales through branded campaigns, DSP campaigns, and organic sales, then you have a full ACoS of 10%.

Organic Sales Growth

Finally, one of the simplest ways to see if DSP is having a positive effect is to look at organic sales growth. If this metric looks good, it is an easy way to help quantify your DSP spend and continue to drive awareness for your brand and your products.

How We Made an Amazon DSP Business Case by Taking a Full-Funnel Approach

We’ve seen this full-funnel approach work with our clients who are running Amazon DSP campaigns. Let’s take a moment and review what the standard metrics look like when we recently ran Amazon DSP campaigns for a content26 client.

Spend: $270,000
Sales: $93,000
Impressions: 128 million
DPVR: .11%
ROAS: .34%

These are terrible metrics—directly attributed sales were 1/3 of spend. But because the customer journey captured in these metrics is so narrow, it doesn’t even begin to cover the different paths a consumer could take to ultimately make a purchase of the brand’s products.

Now let’s incorporate some additional quarter over quarter metrics to truly measure the impact of Amazon DSP.

Now let’s incorporate some additional quarter over quarter metrics to truly measure the impact of Amazon DSP.

Branded Search Impressions: +5%
Branded Search Sales: +25%
Branded Search Click-Through Rate: +20%

Not only are shoppers searching for the brand; an increase in CTR also tells us shoppers that type in branded terms are much more engaged. We’ve piqued the interest of the consumer through DSP, and they’ve remained engaged enough to click on a sponsored products ad.

Branded Search ACoS: -6%

Not only are we driving more traffic to branded campaigns, they are converting to a sale at a lower cost to the client.

When we consider branded search metrics along with Amazon DSP metrics, the goal quickly shifts from increasing sales through Amazon DSP to driving traffic to low ACoS campaigns. And in this case, Amazon DSP brought about a huge win for the client.

Organic Sales Growth: +10%

When measuring organic sales growth (Organic Sales Current Quarter – Organic Sales Last Quarter) / (Organic Sales Last Quarter), we saw a 10% lift in performance. This growth alone was worth $150,000.

Full ACoS: -70%

Perhaps the most interesting metric is when we look at the full sales effect of DSP. Note that we are excluding generic and competitive campaigns here as those campaigns target segments of traffic that most likely do not follow the customer journey of someone who has viewed a DSP ad.

The formula for calculating full ACoS is as follows:

(Branded Search Ad Cost + DSP Ad Cost) / (Branded Search Sales + DSP Sales + Organic Sales Growth)

For our client, full ACoS decreased by 40%! That means that not only did we get more consumers to search for the brand, they were converting at a higher ROAS than before!

Search Rank: +38%

During the time we were running Amazon DSP, search rank improved by 38%, as more people were searching for their branded terms quarter over quarter.

This organic search had no direct attribution to Amazon DSP ads because the consumer didn’t click on the ad. But they saw the ad, and went to Amazon to research the brand further, and ultimately made the purchase.

Channel Sales: +15%

The Bottom Line

Over the course of the quarter, we were able to drive nearly $1.5 million in branded ad sales and incremental organic sales with over $500,000 in DSP and branded search ad spend.

Additionally, when we factor in the full-funnel view of performance, the client had a full ACoS of 34%, which is exceptional.

Using the metrics described above, we quantified the viability of Amazon DSP, and measured its true impact on Amazon business.

As we saw, Amazon DSP impacts organic sales, sales driven through branded search campaigns, and search rank. Use these metrics to measure success, and you may discover it becomes easy to make a business case for Amazon DSP.