TL;DR:
- Amazon has updated its demand-side platform (DSP) with advanced machine-learning models to improve audience targeting and cost efficiency.
- The updates have resulted in a 34.1% increase in return on ad spend and a 24.7% decrease in cost-per-click, according to an internal study.
- Artificial intelligence and machine learning play a significant role in the programmatic advertising industry.
- Amazon’s DSP is a leading player in the industry, with the company expected to capture 12.7% of US digital ad dollars by 2024.
- The DSP allows advertisers to bid programmatically on inventory across the Amazon marketplace, streaming content, and the web.
- Amazon’s unique advantage is its ability to tie ad impressions back to its e-commerce platform, giving it a competitive edge in the programmatic space.
- The programmatic advertising landscape is becoming increasingly competitive, with DSPs and SSPs vying for direct deals with advertisers and publishers.
Main AI News:
Maximizing Ad Efficiency: Amazon Elevates its DSP Game
As the industry eagerly awaits Amazon’s upcoming upfronts presentation, the retail giant has made strategic updates to its demand-side platform (DSP). The company has implemented “advanced machine learning models” with the aim of enhancing audience targeting and cost-effectiveness. The results have been impressive, with an internal study revealing a 34.1% increase in return on ad spend and a 24.7% decrease in cost-per-click.
Leveraging AI Power: Navigating the Programmatic Landscape
Artificial intelligence and machine learning have become synonymous with cutting-edge technology, and the programmatic advertising space is no exception. Amazon’s DSP is leading the charge, with Director of Advertising Science Neal Richter declaring, “In the age of AI, models will make more news.” The company’s heavy investment in AI has paid off, helping it overcome the challenges posed by Apple’s privacy changes, as reported by the Wall Street Journal.
Dominating the Ad Landscape: Amazon Emerges as an Advertising Behemoth
Amazon’s advertising revenue has been on a steady upward trajectory, with the business bringing in $31 billion in 2021. By 2024, Amazon is expected to capture 12.7% of all US digital ad dollars, positioning it as a close runner-up to Google and Meta, according to Insider Intelligence data cited by Axios.
The e-commerce giant’s DSP provides advertisers with the opportunity to bid programmatically on inventory across the Amazon marketplace, streaming content, and the web. Its unique advantage lies in the ability to tie ad impressions back to its e-commerce platform, making it a standout player in the programmatic arena.
As Richter explains, “The basis of our expertise is really measurement, and our connection and instrumentation to the store allow us to pay very close attention to the success of advertisers.”
Conlcusion:
Amazon’s updates to its demand-side platform (DSP) demonstrate the company’s commitment to staying ahead of the curve in the programmatic advertising industry. The use of advanced machine learning models has resulted in a significant improvement in audience targeting and cost-efficiency, positioning Amazon as a leader in the field.
With the industry becoming increasingly competitive, Amazon’s unique advantage of tying ad impressions back to its e-commerce platform sets it apart from other players. The expected increase in US digital ad dollars captured by Amazon by 2024 further solidifies the company’s position as a major player in the programmatic advertising market.
