DTC POD #341 - Amazon DSP Advertising: What Every Brand Needs to Know
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What is going on DTC pod today we are joined by Sam Lee, who is the vice president of Amazon DSP at Trivium. So Sam, I'm going to let you kick us off, really excited for this convo because, you know, as we're kind of chatting about offline, a bunch of brands obviously in the D two C mix are making their way or have already been selling on Amazon for a while. Might be looking into Amazon DSP or even brands who are not on Amazon. It's something that they can tap into. And, you know, we've done a couple episodes with Mina where we've covered everything about Amazon. So it was really excited to kind of go a little bit deeper on DSP, how you're using it, how brands are using it and everything. So really fired up for this episode. But maybe before we get too far into the weeds on anything like that, why don't you just give us a little bit of a background about yourself, how you got started in the space, maybe your experience working across Amazon and e commerce.
Yeah, for sure. Appreciate it. So my background, I started off predominantly off Amazon marketing, Google Ads, Facebook ads, all that good stuff. Started working in the Amazon PPC space in around 2018. Did that for a few years. I joined Thracio in 2020, which, as you might, may or may not know, the big Amazon aggregator. They basically asked me, do you want to dive into Amazon DSP and figure it out? Because we don't have anyone that's done it. So I learned it pretty much with really zero resources available, was just kind of winging it.
We built the Amazon DSP team out at Thracia. We were running it for 200 plus brands. From there, I basically started a consulting business where I was helping agencies to learn Amazon DSP because the mistake that they made was it was a new platform. Agencies would just task their PPC managers to run Amazon DSP because they thought it might be similar, and it's not. So I was working at various agencies to essentially run Amazon DSP for them or train them on how to run it properly. Through that. I stepped in with one of my clients as CEO a couple years back. So I ran a small Amazon ads agency for about two years.
That agency was acquired back in August, I guess a month and a half ago. And I've been good friends and worked with Mena for quite some time. So I made the jump over to trivium and now I'm here full time. Sweet.
So for our listeners who maybe aren't so familiar, why don't you give a background? Just paint the picture. What is Amazon DSP? How does it work? Why should anyone care?
Yeah, so the funniest thing is if you Google Amazon DSP, there are two Amazon dsps. And I get confused about this all the time. So there's Amazon's demand side platform and then there are Amazon delivery service providers, and they cannot be more different. So delivery service providers deliver packages. Demand side platform is Amazon's programmatic marketing tool. So the reason that people don't have a ton of exposure to it is because it's not easy to just get a seat and run DSP ads in the same way that if you sell on Amazon through seller Central, you can run PVC ads. DSP is different. It requires a whole separate seed.
It lives entirely out of seller central. Typically it's a relatively gated platform in the sense that you can't just tell Amazon you want to run DSP and they'll say yes. So it's a moving target Amazon. Either it requires anywhere from 35 to 50k. It changes all the time and ad spend to be able to even access it. You can do Amazon managed service where they run it for you, which I almost never recommend. There are exceptions, but that minimum ad spends about fifty k per month and then agencies will typically have a DSP seat because the aggregate ad spend across their brands equals the minimum requirement in order to access the seat. So it's relatively gated.
But essentially it's Amazon's programmatic marketing tool. It's display ads. If you have familiarity with sponsored display on the PPC side, this is just a souped up version of that. So it's audience targeting as opposed to query targeting as well as targeting product detail pages based on category or whatever it is in real time.
And where, so where are these ads being served? What properties does Amazon have? Like where are they, where are they finding these audiences?
So the simplest way to run Amazon DSP and how I usually recommend starting is serving these ads on Amazon. So you run what's called responsive e commerce ads. These, this number has changed recently. It's 15 or 18 different ad sizes and they show up all over Amazon, pretty much product detail, pages, homepage, everywhere except brand stores. Essentially, ads can potentially serve, you also have the ability to serve ads off Amazon. So once you've seen some success on Amazon, you can target these same audiences. So if somebody falls into an audience based on their view and purchase behavior, they're on that same mobile device, that same desktop device. If they go to any other website, you can programmatically purchase ad space off Amazon as well.
And then video ads, which that's a whole other thing. But you can also serve video ads in a lot of different places off Amazon as well.
So if you're a brand that's getting set up, you know, who's the typical brand that does this? I know you said to have like a, to run DSP yourself, you got to be spending a lot. Sometimes agencies can kind of, you know, group all that spend together and run it for you. So like for example, in your guys space, like what's the, what's the smallest size brand that you have, like running DSP stuff? And like what are some of the.
Larger scale ones that you might, typical recommendation. If you're a brand that's selling on Amazon, the first thing you want to do is dial in your PPC spend and make sure that you've had, you want to contribute a certain amount of money to PPC before you. DSP is really the next step. So there is, I don't have a specific number because it's really case by case. But a couple of things I look at is you should be spending usually brands are spending at least ten or 20k on PPC before they expand to DSP. So basically we want to have a decent amount of PPC spend. The thought is basically, as opposed to spending 5000, whatever it is, incremental dollars in PPC. Because maybe you're starting to see a diminishing return, you plug it into DSP.
My usual recommendation for brands that are focused on profit and efficiency is we typically run DSP at around 25% of PPC spend. So if a brand spending twenty k a month, we'll try out DSP at 5000 a month. That's usually a solid cadence and it helps to improve conversion rates across both platforms. I do have instances where we run it lower. Like brands have wanted to test it out with two or 3000, see how it does. And it's often worth a test, but I don't, you know, it's usually you want to be spending at least 5000 a month for it to make sense. The other general qualifier that I have is usually you want to have at least one product with 100 reviews. The closer that you can get to a product with 1000 reviews, the better.
But as long as you have a product that has 100 reviews, it's often worth a test on a low budget.
And what type of products like does it work for any product that you would sell? E commerce? Is there a certain type of product that does better or price point? What have you seen in terms of product mix?
It's entirely dependent on your strategy. Or rather your strategy is dependent on your product. So as an example, really high price point products, you want to run a lot of retargeting because it's a long decision cycle for your potential customer. Your product's $100. Not a lot of people go to the page and buy it immediately. So you want to run retargeting. You want to make sure that your product is shown in front of them. Again, if your product's really cheap, retargeting is ultimately kind of a waste of money because if somebody's on a product detail page for an $8 product, they're not really going to think about it too long.
They either want it or they don't. But in those instances, you go contextual targeting. So you target similar pages in real time, you target competitors and you try to, you go more mid funnel to try to get people to purchase your product that hadn't already seen it. So there's really no specific category or price point that I would say it just your targeting strategy totally depends on what your product is.
No, that makes a bunch of sense. My next question about it was going to be, um, you know, what are some of the, like, talk to me about some of the sort of success stories that you've seen, like, what's worked really well for brands? What are some examples that, you know, brands come to you and been like, hey, we want to test this out. And, and DSP was, uh, like a big winner. Why do you think that was? What was the context of the brand? I'd love to just kind of, you know, understand what, what went down.
Yeah, totally. I would say that one of the biggest things is products that have a lot of traffic already going to their pages and their conversion rates are hit or miss. It's a great way to get people 1234 times more exposed to your products. One thing that we're able to see through Amazon marketing cloud is what are the conversion rates that brands have based on ad exposure? So, like, what is the conversion rate for somebody that only saw a sponsored product ad versus somebody that saw a sponsored product? Sponsored brand and Dspenna? And when we put DSP in the mix, it almost always increases conversion rate by like 50%. It's pretty substantial. There are a lot of different success stories for different reasons, to be honest. But one thing that I've seen is general brand lift, general conversion rates for products that qualify for DSP and have a decent amount of reviews. It's almost always going to work if you run it correctly.
The other thing is if brands are making big pushes at certain times of year and they want to run, say, a streaming tv ad or that focuses up to Prime Day, we've been able to make certain brands number one in the category by running streaming tv for two or three months leading up to a particular flagpole event. So in reality, I can't say that there's a super particular product line or price point or use case that makes sense more than one another. What's really important is just the nuance with the way that you run the ads. And if you run it correctly, not every brand is going to be successful. It's almost always worth the test, but it's not going to work for everyone. But as long as you cater the targeting strategy to a particular product, whatever it is, then odds are you're going to be successful if you run it correctly.
Sam, one of the things that we were chatting about was you said that if you're on Amazon, you're running ads on Amazon, you're doing PPC, and then you're like, okay, I want to step up into DSP you can do that. But you also said that you've worked with stores that aren't even selling on Amazon that are leveraging DSP. So could you tell us a little bit about how that whole thing works?
Yeah. So what's interesting is that with Amazon DSP, the most basic use case is you take product detail pages on Amazon. You serve those ads, people click and they go through Amazon. But you can run any type of custom ads that you want as well. So general display ads, there are a lot of different formats. You can run them in. You can run display ads on and off Amazon that aren't Amazon products labeled. You can also run video ads across Twitch.
You can run them on Amazon Prime Video freebie. A lot of open real estate on streaming tv and video. And when you're running ads outside of basic display ads on Amazon, you can direct those ads anyway. So if you want to be able to tap into Amazon's first party data and you don't even sell on Amazon, you can do that. So as an example, let's say you're a brand that, let's say you're a gym or you're a brand that sells fitness equipment and you want to be able to target people that you know are interested in fitness. You can run DSP, target an in market audience for fitness enthusiasts, somebody that's actively browsing protein on Amazon. You can serve them display ads that go back to your DTC site. So it's a pretty definitive way to tell I that this person is interested in your type of product based on what they browse on Amazon.
If somebody's looking at protein on Amazon and they're in market, odds are they're into fitness. You don't have to sell on Amazon to be a fitness oriented company that can use this data to drive people to your site. So you can get really creative in Amazon's first party data. Because the difference between Amazon and a lot of other channels is that you're targeting people based on what they actually buy and what they view. Interest based targeting can have a lot of factors. Browsing and purchase behavior on Amazon tells you a lot about somebody and you don't need to be an Amazon seller in order to tap into that data anymore.
Yeah, that's, that's super interesting. And what, what kind of, I know you mentioned like the examples of if you're selling fitness equipment or gyms, but have you, have you seen even like other sort of brands that are tapping into that sort of stuff in different, different verticals or different markets?
Yeah, I would say, to be honest, this is something that people need a lot more education surrounding. So I haven't seen it a ton. But a couple examples is I used to work with a company that is a online marketplace for trading cards and what we were able to do is target in market audiences for people that were buying trading card like holsters or there were several of them that were applicable to their target audience, create display ads and serve ads promoting their app in their marketplace. And then we were able to track signups for that marketplace. And then a more broad use is I ran DSP ads for LA Metro, which you wouldn't expect La Metro to run Amazon as. But what we're able to do is we're able to target specific regions and locations. So obviously just running them in LA. We were able to target based on demographic people that had a propensity to be transit riders and we were able to serve them display ads to promote.
I think it was some deal for an LA Metro like Pass or whatever it was. We were able to target based on location and using that Amazon browsing and purchase behavior that are categorized in particular demographics, lifestyle segments, and we can tap into those to find people's target audience.
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Podcastnetwork one other question that I wanted to ask was, you know, I think one thing that you had mentioned earlier was like, you want to start running DSP after you're at a certain threshold, after you have 100 reviews, these sort of things. But, you know, when it comes to display, like, what are some of the characteristics of like a good ad, are you like, what is the creative process look like in coming up with these creative and assets? Is it the same stuff that you're typically just having on Amazon? Do you have to come up with new ad assets? Do they help in that creation process? From a creative standpoint, what does that look like in getting ads to perform on display?
95% of the time it requires zero effort just because what we usually run are called responsive e commerce creatives. This automatically pulls in your main product detail page image, it pulls in your price, it pulls in your review count. If you have a coupon running or a discount, that'll pull into the ad as well. You can add in a logo and a headline and it'll responsively adapt to a bunch of different ad sizes everywhere. So I almost always recommend that to brands that are selling on Amazon. As far as other brands or if you want to go with custom creatives, you can. And it operates in the same way other display ads would. You just have to have it in some various sizes and they can populate into the same areas.
And then on the video side, it's incredibly important, obviously, because even if your targeting is perfect, if you don't have great video assets that are going to be engaging, it'll never work. So for brands that are actively selling on Amazon and just looking to sell more of their products, you need functionally nothing from a creative standpoint. As long as your main product detail page image is good.
That's sweet. And then kind of piggybacking on that. Like, if you think about just the mix, right, of different, like, marketing channels, everyone has so many options, right? You'll start with your, your meta, your Google and then maybe, you know, some Amazon PPC. But like, how do you, how do you know Amazon DSP? Like, how do you know it's worth testing that channel? Because like you said it, there is a budget required to test there. You're. A lot of brands are benchmarking this strategy versus, you know, in person marketing influencer sponsoring. Like, there's so many things and it's like really easy to blow through a massive ad budget really quickly with all these different strategies. So how do you know, like, if you and I know this question isn't really easy because it's kind of like, yeah, at the end of the day, it matters.
Your brand, it's your strategy, it's your call. But, like, if you had to just think of, like, growing brands that you've seen that do well on DSP, right? Like, how far along are they in their overall marketing strategies? Like, when does DSP come in? Are they, you know, have they gone, like, fully in on creators? They've done Amazon PPC. They've done Facebook, Google. Are they single channel Amazon, Amazon PPC? And then, and then they do DSP. Like, where, where are they in that journey?
Yeah, I mean, of course it varies pretty heavily. And I'd say the beautiful part about Amazon DSP is that depending on the strategy you run, it can really mold to whatever your KPI's are.
I.
So if you want more new to brand customers, you can run it that way. If you're looking just purely for a high return ad spend and to retarget, you can run it that way. So ultimately for me, it's less about where you are in your overall marketing journey with other platforms and more about having the person that knows how to do it to run it for you. Because a lot of people run it wrong and it has gotten a bad rap from certain places just because people are running in the wrong way, they're going very top of funnel and they don't see more sales. So again, to me it's you want 100 reviews, you want to be spending a relatively substantial amount on PPC and you want to, you can either run it ambitiously and you can want to grow or you can want to make every ad dollar count and you can run it super bottom funnel. So there's really no clear answer, but I will say that Amazon is just generally one of those channels that really benefits from all other marketing types. So we'll run DSP and we'll have, let's say a $5,000 budget and it does well and then they'll put some money towards influencer marketing or TikTok ads and then we see the benefit on the DSP side. So the more traffic you have going to your pages, the better chance the DSP will generally be successful because there's more people to retarget.
That being said, it's less about, I mean, when is important based on the things I just said, but it's more about who's running it and what that targeting strategy is going to be and how it's in line with your KPI's. Because if you're really just looking for heavily brand like, heavy brand awareness, you can do that off Amazon or you can do top funnel DSP. If you're looking for purely bottom funnel conversion, rate oriented stuff, focus on PPC until you hit a certain point and then test out Amazon DSP. So it really, it's meant to fit in with all these other marketing channels. There's no real set time where you should do it, but I think that for most brands it's worth exploring. And you can tell pretty quickly, in my experience, whether it's going to work or nothing.
So what is it? What is your guys process right when you're working with a brand at Trivium? Like how do you guys work with them to figure out what their Amazon strategy is going to be? Just overall, what does that whole life cycle look like?
Yeah, I would say that when you're talking to a brand in the very beginning, it's important to know how big are they on Amazon, what's their sales volume, what's their PPC spend, if any? Once we're working with the brand, we touch up their PPC, it's humming. Then we explore DSP. So if a brand is already relatively large and they've already experimented with both, then we'll roll out both as once. Otherwise, if they've never done it, we usually clean up the PPC first, make sure that that's all doing well, and then we roll out DSP. Just because, especially when you're running retargeting if your PPC A, isn't driving enough traffic to your pages, or B, you're driving a lot of irrelevant traffic to your pages. Retargeting is not going to work because you were sending the wrong people your pages anyways. So it's a step by step process. We do roll it out simultaneously sometimes, usually for bigger brands, but otherwise it's you.
It's clean up the product detail pages, make sure they're ready to convert. Clean up PPC to make sure the right traffic's going to them. Launch DSP to grow it. Because at the end of the day, if your product detail pages aren't set up super well, they don't look good, then I can send all the traffic, relevant traffic I want to your page. It's not going to convert. It's the same with DTC. Clean up your website first before you invest too much in marketing. Clean up your Amazon store, your Amazon product detail pages first before we run DSP ad to drive traffic to your pages because we want to make sure it converts.
So it really is a step by step process. But for brands that are further along and a lot of it looks good, we can roll it on at once. Otherwise it's product detail pages. Clean it up. Make it look good. PPC, DSP.
All right. And I've talked about this ad nauseam with Mina, but I just wanted to chat about it with you because, like, getting different perspectives is always great to you. Like what, what makes, what are some of the characteristics that you see of brands that are like, really killing it on Amazon? Like, forget about the DSP for a second. Just brands that do really well. Like you're saying, have a super clean product detail page. Like, what are some, you know, like little tips, hacks or highlights that you would call out for brands that really do a great job of having a super clean product page.
Yeah, for sure. For one, I mean, this one's really important. Having text overlay on the images on your product detail page is incredibly important. So many people browse on their mobile phones and obviously a content's important. Your titles and bullet points are important, but people on their mobile phones aren't reading those as much. So the images are just, they're everything. For one, having images that stand out because you view the search engine results page is just a virtual shelf. A couple things that can make you stand out are things like reviews, price point discounts.
That's all great, but making sure that your main image stands out in some capacity from the rest. Like little things are you can either have a protein bottle or you can have a protein bottle that has a vanilla ice cream cone next to it because you're highlighting the flavor. Those little things make huge differences in conversion rates and they're important to touch up before you really expand your advertising spend. And in my opinion, it's like those are the biggest changes you can make. Like you can change bidding structure, you can change your targeting all you want, but minor tweaks to your actual product detail pages themselves can make a world of difference and improve everything you're doing. So that to me is, that's really number one. And it's how do you differentiate yourself? Whether it's a unique product, that there aren't a lot of copiers out there yet, or whether you're an incredibly crowded product category, like what actually makes you stand out. And in my opinion, it should never just be a price thing because there's always going to be someone that's willing to undercut you.
So how do you highlight what makes your product worth more than the $20 cheaper chinese knockoff? And the easiest way to do it is with your images. I think it's incredibly important.
The other thing I was going to ask is, I know you guys must see a lot of it at trivium, but what's hot in your market? I know in Amazon and supplements, nutrition, things are always changing. So what are some trends that you're seeing? What's working? What products are people going for? What's exciting in fall? 24?
Yeah, I mean, that's a really good question. It's so category specific. I think that like minor tweaks to popular products are very hot in the sense that one brand that I worked with for a while basically just created a product that added a little bit more flavor to collagen protein. I feel like all I'm talking about is supplements, but these are the ones that are top of mind. And it's like collagen protein was always popular at high search volume. It's taking things that already have high search volume and finding a small differentiator like this is already a popular item. It has high search volume. But what is nobody doing within this high search volume category? Because in order to create a new category like that, that's incredibly different and unique in a product that nobody's seen before.
Awesome. But also nobody's looking for it. So the best way to do it is define what already has somewhat of a high search volume and make a tweak on that. So like you're standing out, but the search volume is already there. So it's not like you have to create an entire new category which requires a ton of off Amazon marketing. So it's unique, takes on popular products, I would say is a very good way to get rich quick.
Yeah, I love that. I think that's really solid feedback because a lot of people might be like, oh, let's create something that's totally new. But if the search volume isn't there, like the market's not ready for it and it's just a totally different thing.
Right. And create something the world's never heard of, you can get incredibly successful. But at the end of the day, if it's a product, you need the capital to market it because nobody's looking for it if they haven't heard of it.
No, I think, I think that's spot on. And as we sort of wrap up here, are there any other things that you're seeing, like, you know, over the next year that brands that are going to win next year and onwards are going to be, are doing really well, whether it's their DSP strategy, their Amazon strategy, like what? What are some of the exciting things that are kind of happening in this world that get you excited over the next year?
Yeah, I think that having a cohesive marketing strategy across channels is the most important thing. I think that Amazon's had a heavy emphasis on video and that's going to continue to expand. PPC and DSP are and will continue to be important. DSP has been growing, but it's still something that people don't know a ton about, might have heard of it, might not. They don't know where to start. It's still something that to me, you can be a relatively early mover and see a ton of success still. But also there are new, exciting emerging platforms like TikTok shop that are in very early stages. So utilize that have like.
Amazon ultimately is a demand capture platform, right? It can be a demand generation platform through things like video marketing. But at the end of the day, you need to drive demand for your product elsewhere also. So one huge mistake I've seen brands do is we'll be managing their Amazon and Amazon will be doing super well and their D2C isn't doing so hot, right? So they'll pull their marketing dollars out of D2C and plug them all to Amazon. Then their Amazon sales go down and their conversion rates go down because people ultimately, so much of Amazon traffic and your awareness and how many people are looking up your brand, it's because you're marketing it elsewhere than Amazon can capitalize. And it gives you more room to run with your Amazon budget, the more demand that you're driving on these other channels. So having a holistic marketing strategy and understanding that attribution isn't always one to one. And there are things that you can do that are going to help. Like you can run an Instagram ad and see Amazon sales lift and people don't think about how you tie those things together.
So I think that that sort of cohesion across those channels and the better you can realize that they do work together, the better off you're going to be.
Yeah, I think that's spot on. And I know even we're chatting about Mina with it and one thing that he mentioned was like, yeah, when you're, you know, all these brands are like running the TikTok shop, but like they're doing it sometimes before they've even set up Amazon. Right? And he was like, you want to set up Amazon? Because like, at the very least for the people who don't buy directly through TikTok shop, they're going to be able to find you on Amazon. So, you know, just understanding that. And I think that's, that's also really spot on with how you're thinking about, you know, d to c marketing. Not all of it is going to convert directly through your shopify sales channel. Some of it like will lead over to Amazon. And not all your Facebook ads or your, your Instagram ads are going to convert right there.
They might come over to Amazon. So, um, having a really. Yeah, like having that and thinking about it that way because I think a lot of marketers get caught up with like only the attribution that they can, uh, you know, directly measure. And a lot of times it's, it's just, it's just tough because there is, there's going to be breakage. Um, and you know, I feel like that's a problem that'll never be 100% solved. But I, but just understanding that like Amazon is demand captured, like, you know, keep doing what you're doing and bring that whole marketing strategy cohesively together.
If you're unable to track everything perfectly all the time, which nobody is, the next best thing is to zoom out and simplify a little bit. What did your sales actually do at a macro level when you launched this ad? What did we do differently? Did our Amazon sales increase when we did this? Yes. Even if maybe you're not seeing the highest roas in this other platform, sales increased over here. Good chance that those things are related.
So, and I just know so many market that'll spend so much time like banging their heads against the wall, like trying to get like perfect, perfect attribution when like, if they just spend that time, like, you know, obviously this is not to say that attribution is important, because it is. But it's just to say that sometimes you can over index on trying to like get the perfect attribution and then missed like the opportunities that are right in front of you and just, you know, where you can look at like blended roas and, and like you're saying your sales and like kind of follow the macros. So anyway, Sam, thanks for coming on. This was a blast going deep into the world of Amazon DSP. This was awesome. For anyone who's tuning in, where can we connect with you? Why don't you shout out whether you're on social LinkedIn? Where do we connect with you? Where do we email you?
Yes, LinkedIn is always easy. My name is Sam Lee. I work at trivium group, but a lot of Sam Lee's hopefully all pop up. Otherwise, you can go to Trivium's website or I'm Sam dot liviamco.com if you want to reach out.
Sweet. Thanks so much for coming on, Sam.
Thanks brother. Good to talk to you.
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