Solving Amazon DSP concerns for most brand owners begins the moment they get past the sticker shock of a $10,000 minimum spend.
Whenever we discuss long-term growth strategies with clients, the conversation always turns to Amazon DSP. As soon as we mention it, we often see a mix of sticker shock and skepticism.
A Fall 2023 survey showed 49% of U.S. marketers rated DSP’s targeting as excellent, and 42% reported strong ROI. Despite these positive results, the questions we get from brand owners are almost always the same.
“Is this just a more expensive version of Sponsored Display? Why does it cost $10,000 a month? Is it just going to steal sales from my PPC campaigns?”
These are the right questions to ask. I’ve spent years in the trenches of Amazon, and I know that every dollar has to be justified.
You’ve probably heard the stories about DSP’s complexity, the steep learning curve, and the high cost of entry. It feels like a different universe compared to the keyword-driven world of Sponsored Ads.
At our Amazon agency, we navigate this universe for our clients every single day. My entire approach is built around solving Amazon DSP concerns by turning that skepticism into a clear, data-driven growth strategy.
TL;DR
This article explains why DSP is not a “gamble” that steals PPC sales, but a necessary investment in algorithmic learning. Solving Amazon DSP concerns means trusting the initial 60-day learning phase and focusing on New-to-Brand metrics to see true, incremental growth.
Table of Contents
Get A Clear DSP Plan
We explain the budget, the timeline, and the exact metrics needed for DSP success.
"Is This Just an Expensive Gamble?" - How I Justify the Investment
A key part of solving Amazon DSP concerns is tackling the budget head-on. The first thing we address on a client call is the budget.
The question I hear most often is, “Why do we really need to spend $6,000 to $10,000 a month? Can’t we just test the waters with less?”.
My answer always comes back to one word: data.
Why Can't I Start DSP with a Small Budget?
That minimum spend isn’t an arbitrary fee. It is the cost of admission to feed Amazon’s machine-learning algorithm the data it needs to function.
If you try to run DSP on a small budget, you starve the algorithm. It never gets enough information to exit its initial “learning phase,” which means your campaign will never become efficient.
The minimum spend is what guarantees your ads have enough reach and frequency. This is required to gather the data for optimization.
I also remind clients that working with an agency like ours makes this far more accessible.
A managed service account directly with Amazon requires a commitment of around $50,000 a month.
We get our clients in the door for $6,000 to $10,000, which is a significant advantage.
Why Won't I See Immediate ROAS from DSP?
Setting realistic expectations is crucial for solving Amazon DSP concerns. I am direct with clients from day one: the first 30 to 60 days will feel uncomfortable.
You will see the ad spend going out, but you will not see the immediate high ROAS you are used to from PPC. This is the “learning and data collection phase,” and it is non-negotiable.
Here is the timeline I give my clients:
- Months 1–2 are the intelligence-gathering mission. The algorithm tests audiences and placements to see what works and build a data foundation.
- Month 3 onward is when we start seeing the payoff. Armed with two months of data, my team begins targeted optimizations, and ROAS climbs.
I tell them to think of the initial budget not as buying ads, but as buying the data that makes the ads smart. When you frame it that way, the initial lower efficiency is a necessary investment, not a failing campaign.
Do We Really Need to Spend $6,000–$10,000?
Amazon DSP has a minimum monthly spend requirement, which is typically around $10,000 for managed accounts. Through partners like us, however, we can often start at $6,000 per month.
This spend level is a critical part of solving Amazon DSP concerns because it is the minimum required to achieve several key objectives.
- Collect enough data for meaningful optimizations.
- Ensure sufficient reach and frequency for audience targeting.
- Test multiple audiences, creatives, and placements to achieve reliable results.
We can always start at the lower end of the budget range. We then scale up as the campaign proves its performance.
How Sellers Should Approach DSP Budgeting?
Sellers must approach DSP with a mindset of investment in data, not immediate ad performance. Do not attempt to “test” DSP with a budget below the recommended minimum, as this will starve the algorithm.
Commit to the necessary minimum spend for at least 60 days. View this initial period as buying the intelligence that will make your campaigns efficient later on.
- Set clear expectations that the first 30–60 days are for learning, not high ROAS.
- Understand that this initial data collection is non-negotiable for future campaign success.
- Consider partnering with an agency to access lower minimum spends and expert management. This makes DSP more accessible and cost-effective than direct Amazon-managed services.
Drive New Growth
Our DSP strategies find new-to-brand customers who are not actively searching for you yet.
"Where Is My Money Actually Going?" – Making DSP Tangible
Another part of solving Amazon DSP concerns is making the platform’s reach tangible. The abstract nature of DSP becomes very real for clients the first time they see their ad on a major news website or on a competitor’s product page.
It’s an exciting moment that demonstrates the massive reach we’re tapping into.
What Will My DSP Ads Look Like and Where Will They Appear?
Clients always want to know what their ads will look like and where they will show up. We primarily use two types of creatives.
- Responsive eCommerce Creatives (REC) – These are the workhorses, pulling your product image, title, reviews, and price right from your listing. They look a lot like Sponsored Display ads but can appear in thousands of more places.
- Custom Creatives – This is where we build the brand. We use custom videos and lifestyle images to tell a story and reach people who are not even searching for your product category yet.
These ads can appear on Amazon product pages. Their real power is showing up on thousands of third-party sites and apps in Amazon’s network, like IMDb, Yahoo, and countless others.
How Do You Decide Where DSP Ads Run?
Strategic management is at the heart of solving Amazon DSP concerns, which includes deciding where to spend the budget. We can run ads on “Amazon-owned inventory only” for highly efficient, bottom-funnel campaigns or expand to the broader third-party network to build brand awareness.
For example, we use Amazon-only placements to retarget shoppers who viewed a client’s product and left. Simultaneously, we use the third-party network to introduce their brand to new “in-market” audiences who are browsing for similar products but have not found them yet.
To make it crystal clear for sellers, I often use this table. It shows how DSP fits in with the PPC ads they already know.
| Feature/Consideration | Amazon Sponsored Ads (PPC) | Amazon DSP |
|---|---|---|
|
Cost Structure |
Pay-Per-Click (PPC) |
Cost-Per-Mille (CPM) – Pay for 1,000 impressions |
|
Primary Targeting |
Keyword & Product Targeting |
Audience Targeting (Demographics, Lifestyle, In-Market) |
|
Ad Placements |
On Amazon only |
On and Off Amazon (Amazon network, 3rd party sites) |
|
Main Objective |
Demand Capture (bottom-funnel) |
Demand Generation & Retargeting (full-funnel) |
|
Learning Curve |
Simple to Moderate |
Steep & Complex |
|
Minimum Spend |
Low (e.g., $1/day) |
High (e.g., $6,000+/month) |
How Do You Determine the Best DSP Strategy for a Client?
Our approach to solving Amazon DSP concerns is customized based on your brand goals, creative assets, and target audience stage. We determine what is best for each client by following a clear, data-driven process.
- Identify Campaign Goals. We start by defining what the campaign is designed to achieve, such as brand awareness, retargeting, or repurchase.
- Assess Creative Readiness. If your listings are strong, we typically start with Responsive eCommerce Creatives for efficiency. If you have lifestyle or brand visuals, we explore custom image or video ads to tell a deeper story.
- Test and Compare. We often launch multiple creative formats initially (e.g., REC vs. custom image) to compare performance in terms of CTR, ROAS, and engagement.
- Optimize Based on Data. Once we gather results, we focus spend on the formats and messages that drive the strongest results for your brand.
This process ensures that each client’s DSP strategy is customized based on their product type, audience behavior, and creative assets. We do not use a standard one-size-fits-all approach.
How Can Sellers Make DSP Tangible?
Sellers should understand DSP’s expansive reach. Your ads will appear on and off Amazon, including major third-party websites and apps, which extends your brand’s visibility significantly.
- Use Responsive eCommerce Creatives (REC) for efficient, bottom-funnel ads that pull directly from your product listings.
- Deploy Custom Creatives, including video and lifestyle images, to tell a deeper brand story and reach new audiences not yet searching for your products.
- Work with your agency to define clear campaign goals. Decide whether to prioritize efficient Amazon-only placements for retargeting or broader third-party networks for brand awareness.
- Provide strong creative assets, as these are crucial for testing and optimizing your DSP campaigns. Your agency should test various formats to find what resonates best.
"Is It Stealing My Sales?" – The Truth About Growth and Attribution
Perhaps the biggest part of solving Amazon DSP concerns is addressing the fear of sales cannibalization. This is the number one fear I hear from sellers.
They see their PPC ACoS go up while DSP shows a high ROAS and immediately think, “DSP is just taking credit for sales my PPC ads were already driving!”
It’s a valid concern, but it comes from looking at the wrong metrics.
Does DSP Cannibalize My PPC Sales?
My direct approach to solving Amazon DSP concerns is to answer this question with a firm no – not when it’s managed correctly.3 DSP is designed to be a complementary force.
- Our retargeting campaigns bring back shoppers who would have been lost to competitors.
- Our top-of-funnel campaigns reach people who have never even heard of the brand.
The proof is in the data. The metric I always point to is New-to-Brand (NTB) percentage.
When we can show a client that 60% or more of their DSP-attributed sales are from customers who have not bought from them in the past year, the cannibalization fear disappears. It is concrete proof that we are driving new, incremental growth.
Is Ad ROAS the Right Metric for DSP?
Educating clients on the right metrics is fundamental to solving Amazon DSP concerns. The next lesson I teach clients is to look beyond simple Ad ROAS.
Here is the difference:
- Ad ROAS measures sales of only the specific product that was advertised.
- Total Brand ROAS measures sales of any product from your brand after a shopper saw an ad.
This second metric is where the magic happens. It captures the “brand halo effect”.
We once ran a DSP video ad for a client’s flagship coffee maker. The Ad ROAS was solid, but the Total Brand ROAS was nearly double.
People saw the ad for the coffee maker and ended up buying the brand’s coffee filters and mugs, too. Total Brand ROAS reveals the true, full impact of the campaign on the entire catalog.
In short, Ad ROAS shows the direct efficiency of the advertised products. Total Brand ROAS shows the overall brand lift and influence DSP has across your catalog.
| Metric | September (Full Month) | October MTD (1-18) |
|---|---|---|
|
Ad Spend |
$5,496 |
$3,809 |
|
Ad Sales |
$7,338 |
$8,064 |
|
Total Brand Sales |
$12,472 |
$12,608 |
|
Ad ROAS |
1.33 |
2.12 |
|
Total Brand ROAS |
2.27 |
3.31 |
DSP vs. PPC: Who Gets the Credit?
Technically, Amazon uses a last-touch attribution model. The very last ad a customer clicks before buying gets 100% of the credit.
So if a shopper sees your DSP ad, and then a week later searches your brand and clicks a PPC ad to buy, PPC gets the credit. I tell clients not to get bogged down in this attribution war.
The DSP ad did its job by making that final search happen. Without that first touchpoint, the sale might never have occurred.
This is why we look at total business growth and NTB metrics, not just which channel got the last click.
Does MerchantSpring Factor DSP Spend into Profit Reports?
By default, MerchantSpring does not include DSP spend in profit or advertising dashboards unless it is manually entered. The platform mainly tracks Sponsored Ads (PPC) data from Amazon Ads.
However, we can still manually combine DSP spend and attributed sales. This is a necessary step for solving Amazon DSP concerns as it allows us to analyze your brand’s total advertising efficiency and overall performance.
Why Should I Care About Total Brand ROAS?
Understanding Total Brand ROAS is essential for solving Amazon DSP concerns because it measures the true impact of your ads on total brand growth, not just direct clicks. DSP ads often play a key role in influencing shopper decisions early in the buying journey.
Even if a shopper does not purchase immediately after seeing your ad, that exposure can lead them to return later and convert through organic search or a PPC ad. Monitoring Total Brand ROAS shows this broader sales lift and brand visibility created by your DSP campaigns.
What Metrics Truly Matter for DSP Success?
Sellers must shift their focus from single-channel attribution to holistic brand growth. Do not let the fear of cannibalization prevent you from seeing DSP’s incremental value.
- Focus on New-to-Brand (NTB) percentage. This metric proves DSP is bringing in fresh customers, not just taking credit for existing sales. Aim for 60% or more NTB for a healthy DSP campaign.
- Prioritize Total Brand ROAS over Ad ROAS. Total Brand ROAS captures the “brand halo effect” by measuring sales across your entire catalog, revealing DSP’s full impact.
- Understand Amazon’s last-touch attribution model but do not get bogged down in it. DSP often primes the sale, even if a PPC click gets the final credit, so look at overall business growth.
- Manually combine DSP spend and attributed sales in profit reports if your primary tools (like MerchantSpring) do not integrate it automatically. This gives you a complete view of advertising efficiency.
What Is the Right Mindset for a DSP Strategy?
My experience in solving Amazon DSP concerns has completely changed my perspective. When I look at a DSP proposal now, I do not see an expense; I see an engine for scalable, long-term brand growth.
My years of helping clients navigate this space have taught me a few key lessons.
These lessons form the My Amazon Guy playbook for DSP.
- Trust the process, as the first 60 days are for learning. Do not pull the plug before the algorithm has the data it needs to succeed.
- Look beyond Ad ROAS. The real story is told through Total Brand ROAS and New-to-Brand sales.
- Treat DSP and PPC as a team, not competitors. They work together to guide customers from discovery to purchase.
- Recognize that expertise is not optional. DSP is too complex to go it alone, and a partner is essential for getting a positive return on your investment.
Amazon DSP FAQs
Why Is a Full-Funnel Strategy Necessary?
The final step in solving Amazon DSP concerns is to stop viewing it in isolation. Your PPC campaigns are “harvesting” tools that capture existing, bottom-funnel demand.
But a brand that only harvests will eventually run out of customers. DSP is the “planting” tool that generates new demand by introducing your brand to shoppers who do not know you exist.
DSP educates and retargets these new audiences. It moves them down the funnel so they search for your brand later, making your PPC campaigns far more efficient.
This combination of demand generation (DSP) and demand capture (PPC) is the only way to achieve true, scalable growth on Amazon.
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We manage the high cost and complexity of DSP to deliver clear, data-driven results for your brand.
