Amazon DSP Explained - How to Run Retargeting Ads That Convert

TL;DR

• Amazon DSP lets you run display and video ads both on and off Amazon to retarget shoppers effectively.

• Unlike Sponsored Ads, DSP uses behavior-based targeting, not just keywords, for smarter audience reach.

• DSP requires a higher budget, but agencies offer lower-cost managed services for smaller sellers.

• Retargeting with DSP helps bring back cart abandoners and product viewers to increase conversions.

• Results take 2-4 weeks, as DSP needs time for audience learning and optimization.

• Avoid common mistakes like broad targeting, poor frequency capping, and ignoring creative testing.

Ever wonder why some brands keep popping up everywhere—on Amazon, news websites, even your favorite apps? That’s Amazon DSP (Demand Side Platform) in action. 

Most shoppers don’t buy on the first visit. They browse, compare, get distracted, and leave. If you’re relying only on Sponsored Ads, you’re missing out on a massive opportunity to recover those lost sales. Amazon DSP lets you retarget high-intent shoppers, keeping your product in front of them until they’re ready to click ‘Buy Now.’

But DSP isn’t just about running ads—it’s about running the right ads, to the right audience, at the right time. In this guide, you’ll learn how Amazon DSP works, how to set up retargeting ads that convert, and how to use DSP to scale your brand beyond search ads.

Quick guide:

• What is Amazon DSP and how does it work?

• How is Amazon DSP different from Sponsored Ads?

• Who can use Amazon DSP? Do I need to be a brand-registered seller?

• Is Amazon DSP only for big brands, or can small sellers use it too?

• How much does Amazon DSP cost? 

• How long does it take to see results with Amazon DSP?

• Can I run Amazon DSP ads myself, or do I need an agency?

• What are the common mistakes sellers make with Amazon DSP?

What is Amazon DSP and how does it work?

Amazon DSP (Demand Side Platform) is Amazon’s advanced advertising system that allows brands to run display and video ads both on and off Amazon. Unlike Sponsored Ads, which target shoppers actively searching on Amazon, DSP lets you retarget previous visitors and reach new audiences across the web.

How does it work?

Amazon DSP uses Amazon’s massive data network to place highly targeted ads based on shopping behavior, interests, and demographics. Here’s what it does:

• Tracks shopper activity – If a shopper visits your product page but doesn’t buy, Amazon DSP remembers them.

• Shows your ad across multiple platforms – Your ad can follow the shopper across Amazon, Fire TV, Twitch, IMDb, and third-party websites & apps.

• Brings them back to purchase – When they see your ad again, they’re reminded of your product and are more likely to return and buy.

How is Amazon DSP different from Sponsored Ads?

Where ads appear

• Sponsored Ads: Only appear on Amazon in search results, product pages, and the Buy Box.

• Amazon DSP: Runs ads on and off Amazon, including third-party websites, Fire TV, Twitch, and mobile apps.

Targeting capabilities

• Sponsored Ads: Targets shoppers based on keywords, product categories, and competitor ASINs.

• Amazon DSP: Uses behavior-based targeting, meaning it can retarget shoppers who have viewed your product, added it to their cart, or bought similar items.

Campaign control and setup

• Sponsored Ads: You set up, adjust bids, and optimize manually.

• Amazon DSP: Uses advanced audience data and automation to reach high-intent shoppers across multiple platforms.

Ad formats

• Sponsored Ads: Standard Sponsored Product, Sponsored Brand, and Sponsored Display ads.

• Amazon DSP: Includes display ads, video ads, and retargeting ads across Amazon’s network.

Budget and accessibility

• Sponsored Ads: Available to all sellers, with no minimum spend.

• Amazon DSP: Requires a higher budget (usually $10K+), making it more suited for scaling brands.

Which one should you use?

• If you want immediate visibility and sales: Start with Sponsored Ads.

• If you want to retarget lost shoppers and expand beyond Amazon: Use Amazon DSP.

• For maximum results: Use both. Sponsored Ads drive traffic, and DSP ensures you don’t lose it.

Who can use Amazon DSP? Do I need to be a brand-registered seller?

Amazon DSP is available to brands, agencies, and advertisers who want to reach shoppers both on and off Amazon. Unlike Sponsored Ads, you don’t need to be an Amazon seller to use DSP. It’s open to:

• Amazon sellers (FBA or FBM)

• Vendors (selling directly to Amazon)

• Non-Amazon brands (who want to advertise their products or services outside Amazon)

• Agencies and media buyers managing ads for multiple brands

Do I need to be brand-registered?

No, you don’t need to be in Amazon Brand Registry to use DSP. While Brand Registry gives sellers access to Sponsored Brands and A+ Content, DSP is separate and can be used by both brand-registered and non-registered sellers.

However, if you are a seller, being brand-registered helps with:

• Better creative control for DSP ads

• Access to brand analytics, which can help refine DSP targeting

• A stronger brand presence, making retargeting more effective

Even if you’re not selling on Amazon, you can still use Amazon DSP to target Amazon shoppers with display and video ads across Amazon’s network.

Is Amazon DSP only for big brands, or can small sellers use it too?

Amazon DSP is often associated with big brands because of its higher budget requirements, but that doesn’t mean small sellers can’t use it effectively. While Amazon directly manages DSP for large advertisers with a minimum spend of $50K+, smaller sellers can access DSP at a lower budget by working with an Amazon DSP agency.

How small sellers can use Amazon DSP?

• Work with an Amazon DSP agency – Many agencies offer managed DSP services with lower budget requirements, sometimes starting at $5K–$10K instead of Amazon’s $50K minimum.

• Focus on retargeting first – Instead of spending on broad awareness campaigns, small sellers can maximize DSP by targeting past visitors, cart abandoners, and similar audiences to boost conversions.

• Use DSP to scale profitable products – If a seller already has high-performing Sponsored Ads, DSP can extend reach beyond Amazon and drive additional sales without relying solely on search traffic.

Is DSP worth it for small sellers?

If your Sponsored Ads are optimized and profitable, and you want to scale beyond Amazon search, DSP is a great next step. However, if your ads aren’t fully optimized yet, it’s better to fix your PPC strategy first before adding DSP to the mix.

How much does Amazon DSP cost? 

Amazon DSP is not a low-budget ad option like Sponsored Ads. It requires a higher minimum spend, making it more suitable for brands looking to scale. However, the cost depends on who manages your DSP campaigns.

Amazon-managed DSP (for large brands)

• Minimum spend: $50K+ (varies by region and campaign goals)

• Directly managed by Amazon’s ad team

• Best for large advertisers looking for fully managed services

Agency-managed DSP (for mid-size and smaller sellers)

• Minimum spend: $5K–$15K (depending on the agency)

• More flexibility in budget allocation

• Agencies handle optimization, targeting, and reporting

What affects DSP costs?

• Ad placements – Video ads and premium placements cost more than standard display ads.

• Targeting type – Retargeting is often cheaper than audience-based prospecting.

• Competition – High-demand categories require higher bids.

How is DSP pricing structured?

Unlike PPC, which is cost-per-click (CPC), DSP runs on a cost-per-thousand-impressions (CPM) model. This means you pay for ad views, not clicks, making ad targeting and creative quality crucial for success.

How long does it take to see results with Amazon DSP?

Amazon DSP isn’t a quick-win strategy like Sponsored Ads, where you can launch a campaign and see conversions within hours. Since DSP focuses on retargeting and audience building, it typically takes 2 to 4 weeks to start seeing measurable results.

What affects the DSP performance timeline?

• Retargeting vs. prospecting – Retargeting campaigns (targeting shoppers who visited your product page) see results faster than prospecting campaigns (targeting new audiences).

• Budget and reach – Higher budgets accelerate data collection, leading to faster optimization.

• Ad frequency – Shoppers need to see an ad multiple times before converting. If the frequency is too low, results will take longer.

• Optimization cycle – Amazon DSP campaigns need time for learning and fine-tuning audience targeting, bid strategies, and ad creatives.

When should you evaluate performance?

• Week 1-2: Initial learning phase—collecting data, refining audiences, and testing creatives.

• Week 3-4: Optimizations kick in, and you should see improved conversions and ROAS.

• Week 6+: Performance stabilizes, and you can scale winning segments.

Since DSP operates on a CPM model, ad targeting and creative strategy must be fine-tuned to avoid wasted spend. Working with Amazon advertising services can help optimize campaigns faster, ensuring your DSP budget is spent efficiently.

Can I run Amazon DSP ads myself, or do I need an Amazon PPC management agency?

Unlike Sponsored Ads, which you can manage directly in Seller Central, Amazon DSP is not self-service for most sellers. There are two ways to access it:

1. Amazon-managed DSP (For Large Advertisers)

• Minimum spend: $50K+

• Fully managed by Amazon’s in-house ad team

• Limited flexibility – Amazon controls campaign setup, optimization, and reporting

• Best for large brands with big budgets who want a hands-off approach

2. Agency-managed DSP (For Small to Mid-Sized Sellers)

• Minimum spend: $5K–$15K (varies by agency)

• More flexibility in campaign structure and targeting

• Agencies provide hands-on optimization, custom strategies, and detailed reporting

• Best for brands looking for expert management without high minimum spend

Can you run DSP yourself?

Amazon DSP does have a self-service option, but it’s only available to approved advertisers and requires deep knowledge of programmatic advertising. You’ll need to:

• Set up and optimize audience targeting

• Adjust bidding strategies to control costs

• Monitor ad performance and refine creatives

• Manage budget allocation across multiple placements

If you’re not experienced with demand-side platforms, running DSP yourself can lead to wasted spend. Most sellers work with an Amazon advertising agency to get expert guidance, better ad performance, and access to lower budget requirements.

What are the common mistakes sellers make with Amazon DSP?

1. Using DSP before optimizing Sponsored Ads

DSP is best for scaling an already successful product, not fixing a failing one. If your Sponsored Ads aren’t profitable, fix them first before investing in DSP.

2. Not segmenting audiences properly

Many sellers target broad audiences instead of focusing on high-intent shoppers. Solution: Start with retargeting first (cart abandoners, product page visitors) before expanding to new audiences.

3. Running only one ad creative

If you use one ad format and message, you’ll miss potential buyers who respond to different styles. Solution: Test multiple creatives (image, video, dynamic ads) to see what converts best.

4. Ignoring frequency capping

If shoppers see your ad too often, they tune it out. If they see it too little, they forget. Solution: Set an optimal ad frequency (3-5 times per shopper per week) for better engagement.

5. Not tracking performance beyond ROAS

Many sellers focus only on Return on Ad Spend (ROAS) and ignore brand awareness, new-to-brand buyers, and long-term customer acquisition. Solution: Track Total Sales Impact and customer retention along with ROAS.

6. Not excluding irrelevant audiences

If you don’t use negative audience targeting, Amazon might show ads to people who already purchased. Solution: Exclude past buyers from retargeting campaigns to avoid wasted ad spend.

7. Expecting immediate results

DSP is not like Sponsored Ads—it takes 2-4 weeks to optimize and show strong results. Solution: Give your campaigns time to adjust, monitor data, and refine targeting based on performance trends.

Are you ready to take your Amazon ads to the next level?

If you’re serious about scaling smartly and getting the best return on your ad spend, working with Amazon consultants can give you the expert guidance needed to fine-tune your DSP strategy, optimize targeting, and maximize every dollar spent.

Don’t let your competitors take all the traffic. Start leveraging Amazon DSP today and turn lost clicks into real sales.