Amazon provides a broad suite of advertising options that allow brands to reach shoppers at different stages of the purchase funnel. The two main pillars are Sponsored Ads—which operate on Amazon’s platform—and Amazon DSP (Demand-Side Platform), which extends advertising beyond Amazon into programmatic display and video.
This guide explains the differences between the two, outlines their strengths, and helps you determine when to use each for maximum impact.
Sponsored Ads are Amazon’s pay-per-click (PPC) options, available to sellers and vendors with product listings on the platform. They’re designed to reach shoppers actively searching or browsing within Amazon. The three core types are Sponsored Products, Sponsored Brands, and Sponsored Display.
These ads promote individual product listings within search results or on product detail pages. Because they target shoppers who are already demonstrating purchase intent, they tend to deliver high conversion rates and low cost-per-click.
Research shows that Sponsored Product campaigns often outperform Sponsored Brands in both efficiency and conversion. Not surprisingly, Sponsored Products account for most of Amazon’s ad spend and are the foundation of most PPC strategies.
Sponsored Brands highlight a seller’s logo, headline, and multiple products. They appear in premium placements such as the top of search results and can link to an Amazon Storefront or custom landing page.
These ads are particularly useful for brand building and cross-selling rather than immediate conversions. According to Amazon advertising benchmarks, Sponsored Brands help customers explore your product line and learn your brand story, but they typically have higher CPCs and lower direct ROI than Sponsored Products.
All Sponsored Ads run on a PPC model—advertisers bid on keywords or product targets and pay only when a shopper clicks. Campaigns can start with small daily budgets and scale over time, making them accessible to sellers of all sizes.
The Amazon Ads console provides automated bidding and targeting features that simplify management. Because ad content is pulled directly from product listings or prebuilt templates, setup is straightforward. Sponsored Ads remain the easiest and most effective entry point for most Amazon advertisers.
Amazon DSP is Amazon’s programmatic platform for buying display, video, and audio ads both on and off Amazon. It's a key part of growing revenue on Amazon for brands looking for growth. While Sponsored Ads reach only on-site shoppers, DSP enables brands to engage audiences across the web—on Amazon-owned properties such as IMDb, Twitch, and Fire TV, as well as on third-party websites and apps.
By leveraging Amazon’s vast shopper data, DSP offers advanced audience targeting and retargeting capabilities that go well beyond keyword-based PPC.
Advanced Targeting: DSP uses Amazon’s first-party data to target audiences by demographics, lifestyle, interests, shopping behavior, or previous product interactions. Advertisers can retarget shoppers who viewed products but didn’t purchase, or create lookalike audiences resembling past buyers. This granularity makes DSP a powerful tool for both brand awareness and re-engagement (Amazon DSP overview).
Rich Ad Formats: DSP supports static and animated display ads, video, and even audio formats across multiple channels. Advertisers can upload fully customized creatives that include their own branding and calls-to-action, offering far more design flexibility than standard Sponsored Ads. For example, a brand can run a lifestyle video highlighting product benefits—a capability unavailable to template-based PPC ads.
Broader Reach (On + Off Amazon): DSP ads appear not only on Amazon but also across third-party sites and Amazon-owned platforms. This reach allows brands to engage potential customers throughout their digital journey—whether reading news, watching videos, or using mobile apps. Even brands that don’t sell on Amazon can use DSP to advertise their own websites or retail stores to Amazon’s audience.
Cost Model: DSP uses a Cost-per-Mille (CPM) model, charging per 1,000 impressions rather than clicks. This suits campaigns focused on visibility and reach, while Sponsored Ads use a Cost-per-Click (CPC) model ideal for direct response. The better choice depends on goals: CPM for awareness and retargeting, CPC for capturing purchase-ready shoppers.
Budget Requirements: DSP typically requires higher spend—around $35,000 per month through Amazon’s managed service or $10,000+ via a partner agency (budget guidance). Sponsored Ads, by contrast, have no minimum budget and can start with just a few dollars per day. This makes DSP better suited for medium-to-large brands ready to invest in upper-funnel marketing.
Management & Complexity: DSP demands more expertise than PPC. Advertisers must manage bids, segment audiences, set frequency caps, and optimize creatives. Many brands partner with an Amazon DSP agency or use Amazon’s managed service. Sponsored Ads, meanwhile, are self-service and more plug-and-play.
In short:
If your goal is to drive immediate conversions or boost product visibility, start with Sponsored Products. They capture shoppers who are actively searching and can quickly generate reviews and ranking momentum. Even large brands allocate significant spend here because Sponsored Products provide the most efficient return on ad spend.
Use Sponsored Brands to showcase your identity and product portfolio. These ads communicate your story through a logo, headline, and multiple products, linking shoppers to a branded Storefront. They’re ideal for mid-funnel objectives—introducing customers to your brand, cross-selling, and building recognition across multiple listings.
While short-term ROI may be lower, they contribute strongly to long-term brand equity and awareness.
Once your Sponsored Ads are performing efficiently, DSP can amplify your reach. DSP allows you to run awareness campaigns to introduce your brand to new audiences and retarget shoppers who visited your listings but didn’t purchase.
For high-consideration products or premium categories, DSP’s ability to deliver repeated, contextual impressions across multiple platforms helps keep your brand top-of-mind. You can also use DSP to target lookalike audiences that resemble your best customers, expanding your potential reach.
The strongest Amazon advertising strategies integrate both approaches. Sponsored Ads drive immediate sales from active shoppers, while DSP fuels brand awareness and long-term growth.
Research by Perpetua found that Sponsored Product campaigns achieved 19% higher conversion rates and 3% higher ROAS when combined with DSP ads. Shoppers exposed to DSP display or video ads were more likely to click and buy later when encountering Sponsored Product ads on Amazon.
A typical full-funnel setup might look like this:
This integrated approach ensures your marketing reaches customers at every stage—from initial exposure to final purchase—while maximizing ROI across channels.
A case study from Skale Strategy illustrates how combining Sponsored Ads and DSP can unlock growth. A mid-sized apparel brand in a competitive niche achieved 96% year-over-year sales growth after adding DSP to its Amazon marketing mix.
Initially, the brand focused on Sponsored Products and organic optimization. Once sales momentum built, they used DSP to target niche audiences with tailored display campaigns. The result: higher traffic, stronger retargeting performance, and a DSP return on ad spend (ROAS) of 5.49.
This example highlights DSP’s ability to amplify visibility and convert awareness into measurable sales when layered onto a strong PPC foundation.
Both Amazon Sponsored Ads and Amazon DSP play vital roles in a comprehensive advertising strategy. The right mix depends on your goals, budget, and brand maturity.
Use Sponsored Ads when:
Use Amazon DSP when:
For most brands, the best path is sequential:
A balanced approach—always-on PPC complemented by periodic DSP campaigns—maximizes both short-term conversions and long-term brand growth.
Amazon Sponsored Ads are the most accessible and direct way to drive sales on the platform, efficiently reaching shoppers with high purchase intent. Amazon DSP, meanwhile, empowers brands to extend their visibility beyond Amazon, leverage rich media formats, and use advanced targeting for awareness and retargeting.
The decision isn’t either/or—it’s about sequencing and integration. Start by perfecting Sponsored Ads, then add DSP when you’re ready to scale your reach, strengthen brand recognition, and convert a broader audience.
Brands that combine both approaches consistently achieve stronger performance across all funnel stages—turning awareness into action, clicks into customers, and customers into repeat buyers.
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