Retail Media2 min
The Power of Line Item Optimization on the Amazon DSP
Tiffany Luk, July 27, 2022
Amazon’s Demand Side Platform (DSP) is arguably the most comprehensive programmatic advertising platform in digital marketing today. With digital ad space across Amazon.com, Amazon Owned and Operated (O&O) sites, its open exchange (OE) sites including Amazon Publisher Services (APS) and third party ad exchanges made up of millions of publishers, endemic and non-endemic advertisers alike can reach audiences with highly granular targeting to achieve different objectives across the entire funnel.
Why is line item optimization impactful?
Because investment in Amazon DSP advertising can be costlier than other ad units, advertisers often expect both their allocated monthly and daily budgets to be efficiently spent throughout an order’s flight times and for their KPIs to be hit at the target set. More realistically, however, budget pacing and KPI optimization may not both be optimally achieved at the same time, at all times.
On the Amazon DSP, a line item represents the targeted fields: audience group customized by general and specific attributes (target market), device/inventory (known as line type in the preview or editing screen), destination, creatives, supply sources, device type, viewability, base and max supply bid, and frequency cap – with so many variables, what gets optimized? How do we ensure efficiency?
Historically, the native ad console’s automatic optimization functions would update bids according to the objectives of the campaign. However, they would sometimes over-allocate to one item at the expense of others, leading campaigns to underspend during most of their flights, and end up underspending as a whole. This resulted in an overall decrease in efficiency which could have been avoided if budget was spent more closely to its allocation.
Line item optimization in Perpetua
In Perpetua’s new self-serve Amazon DSP Optimization Software, advertisers have 2 optimization options: “maximize efficiency”, or “optimize efficiency while maximizing spend.” With the first focused solely on improving the overall efficiency of the order, the latter solves a dual optimization problem with a goal of maximizing performance while ensuring budget pacing is in-line with expected spend rate. To learn more about how this works and the KPIs you can optimize for, check out our technical blog here.
Since launching our Perpetua Amazon DSP Optimization beta, we’ve seen an over 20% increase in performance. For advertisers, this means Perpetua’s line item optimization more efficiently prioritizes budget optimization and assigns budget across all line items. It allows the minimum and maximum bids to be changed and KPI guardrails to be set by the advertiser with an algorithm when campaigns are under or over-pacing. And with budget visualization at the line item level, it’s easier to have a granular view of performance.
Unlocking the power of line item optimization
The power of line item optimization not only allows for seamless control of budgeting but also easy adjustments to other critical variables within any line item of an order. The ease of strategically tailoring the Amazon DSP to an advertiser’s goals using Perpetua’s Amazon DSP Optimization Software, removes both manual and tactical obstacles, empowering advertisers to achieve their full funnel advertising objectives much more efficiently with continuous improvements.
Want to learn more about how to scale on the Amazon DSP with Perpetua? Email us at [email protected]
To get started or learn more about how Perpetua can help you scale your Amazon Advertising business, contact us at [email protected]