For Direct-to-Consumer (D2C) brands, the Amazon marketplace is a powerful sales channel, but relying solely on on-platform advertising like Sponsored Products (PPC) is a limited strategy. To achieve true scale and build a resilient brand, D2C companies must look beyond the Buy Box and engage customers across the entire internet. This is where the Amazon Demand-Side Platform (DSP) becomes an indispensable tool, enabling programmatic advertising that leverages Amazon’s vast, first-party consumer data to drive off-Amazon growth [1].
PPC vs. DSP: A Full-Funnel Approach
The key difference between Amazon PPC and Amazon DSP lies in their function within the marketing funnel. Amazon PPC, or Sponsored Ads, is primarily a bottom-of-funnel tool focused on conversion, targeting keywords and product ASINs, and its placements are limited to Amazon’s search results and product pages. In contrast, Amazon DSP is a full-funnel tool, designed for awareness, consideration, and conversion. It targets audiences based on demographics, purchase history, and browsing behavior, and its placements extend both on Amazon and off Amazon to third-party websites, apps, Fire TV, and Twitch. While PPC is highly effective for capturing existing demand, DSP is designed to create new demand by reaching potential customers who have not yet searched for the product on Amazon [2].
Strategic Applications of Amazon DSP for D2C Brands
- Amazon DSP’s power comes from its ability to target audiences based on their actual shopping behavior, both on and off Amazon. For D2C brands, this unlocks several high-impact strategies.
- First, DSP enables hyper-targeted retargeting. Brands can retarget users who have viewed a product listing but did not purchase, those who abandoned their cart, those who purchased a competitor’s product, or even existing customers who are due for a repurchase [3].
Second, DSP is a powerful tool for New-to-Brand (NTB) acquisition. It allows brands to target custom audiences who have never purchased from them but have shown interest in related categories, which is a key metric for Amazon and a powerful way to expand market share [4].
Third, DSP is excellent for Brand Building and Awareness. By placing video and display ads on high-traffic, third-party websites and apps, DSP allows D2C brands to build brand equity and recognition outside the Amazon ecosystem, driving traffic back to their Amazon store or their own D2C website.
Digital agencies are multifaceted, offering a wide array of services to meet the evolving needs of the digital landscape businesses reach their target audience.
Habibur Rahman
Measuring Success Beyond Direct ROAS
A common mistake is to evaluate DSP solely on its direct Return on Ad Spend (ROAS). Because DSP is often used for upper-funnel activities, its direct ROAS may appear lower than PPC. However, its true value is measured by its compounding impact on overall business metrics [5]. DSP-driven sales signal relevance to Amazon’s algorithm, which can boost organic search rankings. Furthermore, by driving more total sales, a successful DSP campaign can help lower the Total Advertising Cost of Sales (TACoS). Finally, DSP can be used to re-engage existing customers, increasing their Customer Lifetime Value (CLV) and strengthening brand loyalty.
For D2C brands ready to move beyond tactical advertising and embrace a strategic, full-funnel approach, Amazon DSP is the necessary next step to secure scalable, long-term growth.
References
[1] SmartScout. Amazon DSP for Off‑Amazon Advertising: When It Works…. [2] M19. How to Do Full-Funnel Advertising on Amazon 2026?. [3] Hunter’s Insights. Amazon Just Changed Retargeting With Powerful Add-to-Cart DSP Audiences. [4] Amazon Advertising. Drive new-to-brand growth with GIA in Amazon DSP. [5] LinkedIn. Don’t judge Amazon DSP by direct ROAS. It’s a game….