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Amazon DSP has become one of the most powerful programmatic platforms for reaching shoppers both on Amazon properties and across the open web. However one of the common challenges advertisers face is high CPMs (cost per thousand impressions). While CPMs are influenced by competition and audience demand there are strategic ways to optimise campaigns and bring costs down without compromising performance. Let us explore how to optimize Amazon DSP campaigns for lower CPM.
CPM in Amazon DSP depends on factors like
• Audience size and demand
• Placement quality (premium vs open exchange)
• Bidding strategy (fixed vs dynamic CPM)
• Targeting precision (broad vs narrow)
The goal is to balance cost efficiency with audience relevance. Overly broad targeting may reduce CPM but harm conversion quality while overly narrow targeting may increase CPM significantly.
Highly specific segments often drive up CPM because of limited supply. Consider broadening targeting criteria such as age ranges interests or shopping behaviours. Use lookalike modelling and in market segments powered by Amazon to reach more people at lower costs.
High frequency often wastes impressions and raises costs. By applying frequency caps (for example no more than 3 impressions per user per day) you spread impressions more efficiently across a larger audience.
• Dynamic CPM bidding allows Amazon DSP to automatically lower bids when demand is low ensuring you do not overspend.
• Test lower base bids and increase gradually if delivery is limited.
• Monitor win rates to find the sweet spot between reach and cost.
Premium placements such as Fire TV or exclusive publishers may cost more. Consider mixing inventory between premium and open exchange placements. Open exchanges often provide significant reach at lower CPMs.
Run ads during hours when competition is lower. For example evenings or weekends may deliver impressions at reduced CPM. AI powered insights in Amazon DSP can reveal time slots with better efficiency.
Regularly review performance reports to exclude segments with high CPM but low engagement or conversions. This trims wasted spend and improves average CPM.
Engaging ads drive higher CTRs which can improve efficiency of bidding algorithms. Rotate multiple creatives test different formats and refresh ads often. Better performance signals can help reduce CPMs over time.
If multiple campaigns are targeting overlapping audiences you may be bidding against yourself and driving up CPM. Use Amazon DSP overlap reports to refine audience segmentation.
Targeting smaller high demand regions can raise CPM. Expanding to broader geographies or tier two cities may reduce competition and lower costs while still reaching relevant audiences.
Amazon DSP campaigns require regular optimisation. Track CPM trends by audience placement and creative. Test one change at a time to measure impact and refine your strategy.
• More impressions for the same budget
• Increased reach and awareness at scale
• Higher efficiency in brand awareness campaigns
• Better balance between cost and performance
Lowering CPM in Amazon DSP is about smart targeting and continuous optimisation. By broadening audiences refining bids optimising creatives and leveraging data insights advertisers can balance efficiency with relevance.
At DWAO we help brands run and optimise Amazon DSP campaigns to achieve both cost efficiency and strong performance. From audience strategy to bidding tactics and creative testing our expertise ensures maximum ROI.
If you want to learn exactly how to optimize Amazon DSP campaigns for lower CPM and scale your media investments effectively DWAO is here to guide you.