- Amazon DSP represents a fundamentally different approach – vertically integrated with commerce data and exclusive inventory.
- A DSP is a programmatic advertising platform that automates inventory purchasing across the digital ecosystem.
- DSPs differ significantly in their approach to data, inventory access, incentives, and transparency.
- Success in programmatic requires understanding not just a DSP’s features and how it works, but what it’s incentivized to prioritize.
What Is a DSP?
A Demand-Side Platform (DSP) is an automated software solution that enables advertisers to buy digital ad inventory across multiple publishers and exchanges in real time. Think of it as the cockpit of a fighter jet for digital advertising – you set targeting parameters, budget, and upload your creative assets, then the DSP handles execution across all of the intended media properties.
At its core, a DSP solves a fundamental problem: efficiently allocating advertising budgets across millions of potential ad impressions available every second.
Key DSP Functions:
- Aggregating Supply: Connecting to multiple ad exchanges to access inventory from thousands of publishers
- Real-Time Bidding (RTB): Evaluating each impression and bidding in milliseconds
- Advanced Targeting: Using demographic, behavioral, contextual, and geographic data
- Campaign Management: Tools for setting parameters and optimization
- Analytics & Reporting: Measuring performance across platforms
The value of a DSP lies in its ability to reduce human friction, enable precise targeting at scale, and provide measurable outcomes that would be impossible to achieve manually.
Why Are There Different DSPs?
While DSPs share similar technical blueprints, they operate with distinctly different business models and incentives that shape their decision-making, such as:
- Data Sources: Some rely heavily on third-party data, while others leverage proprietary first-party data.
- Inventory Access: Traditional DSPs aggregate from multiple publishers; others offer exclusive inventory.
- Revenue Models: Platform fees, percentage of media spend, or rebates can all influence how a DSP prioritizes inventory.
- Optimization Focus: Some prioritize brand safety, others emphasize performance or custom integrations.
- Transparency Levels: Independent DSPs often provide granular data; platform-owned DSPs may limit visibility.
These differences explain why “not all DSPs are created equal” – a DSP’s features are only as valuable as its alignment with your campaign objectives.
What is a ‘Commerce-Driven DSP’?
Amazon DSP stands apart from traditional DSPs because of its unique vertical integration across our daily lives – from e-commerce to advertising funnel. This creates fundamental differences that independent platforms cannot replicate:
What are the advantages of Amazon DSP?
- Unrivaled First-Party Data: All of that shopping data? Amazon uses it, duh. High-quality shopping data from 300 M+ accounts – purchase history, browsing behavior, and search queries enable targeting precision that others cannot match. Not to mention the 2nd largest registered owner vehicle database (2nd only to the DMV).
- Exclusive Inventory: Only Amazon DSP provides access to Amazon-owned properties (Amazon.com, Prime Video, Fire TV, Twitch, IMDb, Whole Foods) – high-intent environments unavailable anywhere else.
- Closed-Loop Attribution: Amazon connects ad exposure directly to purchases, offering measurement capabilities that open-web DSPs cannot replicate. Read the case study about how Force Marketing did just that.
- Identity Resolution: With its scale of authenticated users, Amazon sidesteps the identity challenges affecting the broader programmatic ecosystem.
1 in 2 retail searches starts on Amazon and Amazon accounts for 40% of all online transacations.
What is Amazon’s Streaming TV Strategy?
The recent launch of Amazon Prime Video’s ad tier demonstrates Amazon’s disruptive approach. Rather than announcing a price increase, Amazon gave Prime members a choice: You can pay $2.99/month to remove ads or join an expanded ad ecosystem.
This auto-enrollment of 200 million Prime members created an immediate impact on streaming TV advertising:
- Dramatically expanded high-value inventory overnight
- Launched with aggressive CPM pricing that forced competitors to adjust rates
- Applied its classic retail playbook to advertising: using competitive pricing to capture market share
This is precisely how Amazon approaches its DSP business – not as a neutral marketplace, but as an extension of its commerce strategy.
CC: AdExchanger
As you can see above, average CPMs across major streaming platforms have continued to decline since Amazon Prime Video’s ad tier launch.
- Netflix rates have dropped from $42.14 to $31.05
- Disney Streaming fell from $39.81 to $28.82
- HBO MAX TV declined from $37.62 to $33.76
Amazon’s aggressive pricing strategy (starting between $25-30 and maintaining low rates) has effectively reset market expectations.
This is precisely how Amazon approaches its DSP business – not as a neutral marketplace, but as an extension of its commerce strategy.
CC: Tom Ly, AdTechRadar, EMARKETER
The 2025 DSP Landscape: Trends and Strategic Considerations
The DSP market continues to evolve rapidly, shaped by technological, regulatory, and economic forces:
Current Trends:
- Privacy-First: With third-party cookies phased out, DSPs are shifting to first-party data, contextual targeting, and clean room solutions.
- Consolidation & Commoditization: Core DSP features are becoming more similar across platforms. (Check out Vlad Chubakov‘s take on what’s wrong with KOKAI)
- AI-Driven Optimization: Machine learning for audience segmentation, bid strategies, and creative personalization.
- Retail Media Integration: Expanding connections between programmatic advertising and commerce data.
- Self-Service & Transparency: Growing demand for control and visibility into how DSPs operate.
Start Your Learning Journey Here:
Get Module 1 Here -What is Programmatic — and Why Automation ≠ Simplicity
Get Module 2 Here – Streaming TV vs. Linear TV: The Infrastructure Shift
Get Module 3 Here – What is FAST vs. AVOD vs. SVOD? And The Economics of ‘Free’
Want to learn more about Streaming TV advertising and how it works?
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