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Amazon DSP is one of the most powerful programmatic advertising platforms available today, giving brands access to Amazon shoppers both on and off Amazon properties. But many advertisers face the challenge of balancing click through rates (CTR) with cost per thousand impressions (CPM). A high CPM can quickly drain budgets, while a low CTR indicates poor ad engagement. The key is to improve performance while keeping costs efficient. Here are some proven tips for improving CTR while reducing CPM in Amazon DSP.
Relevance is everything in programmatic advertising. If your ads are shown to the wrong audience, CTR drops and CPM rises due to wasted impressions.
• Use Amazon in market and lifestyle segments to reach audiences already showing purchase intent.
• Apply lookalike modeling to expand audiences while keeping relevance.
• Exclude irrelevant or overlapping segments that inflate CPM without driving engagement.
Engaging creatives are one of the strongest levers for CTR improvement.
• Use strong product visuals that clearly display value.
• Highlight unique selling points or promotions in headlines.
• Test different ad formats (static banners, video, responsive creatives).
• Refresh creatives regularly so audiences do not experience ad fatigue.
High quality, relevant creatives often lower CPM over time because Amazon’s algorithm rewards ads that perform better.
Premium placements often come with higher CPM. Diversify placements across Amazon owned inventory and open exchange to find the balance between cost and engagement.
• Test placements on Fire TV or IMDb for high CTR campaigns.
• Use open exchanges for awareness at lower CPM.
• Continuously evaluate which placements drive the best CTR to cost ratio.
If the same user sees an ad too often, CTR drops and CPM rises. Applying frequency caps spreads impressions across more unique users, improving efficiency. For example, limit impressions to 3 per user per day.
Ad performance often varies by time of day. Running ads during hours with high engagement and lower competition can simultaneously increase CTR and reduce CPM. Analyse reports to find the best performing windows and adjust accordingly.
Dynamic CPM bidding automatically adjusts bids based on inventory demand. This prevents overspending in competitive auctions while ensuring delivery in lower demand periods. Lower bids often reduce CPM without harming reach, while competitive bids can be used for audiences with strong CTR potential.
Users are more likely to click ads that feel relevant to their context.
• Localise creatives with language, pricing or offers specific to a region.
• Personalise recommendations based on browsing or purchase history.
• Use contextual targeting to align ads with user intent.
Review performance reports and exclude segments with high CPM but low CTR. Removing waste helps concentrate spend on segments that deliver results.
Run controlled experiments with different audiences, creatives and bids. For example, test whether video ads deliver higher CTR at lower CPM than static creatives for your category. Data driven optimisation ensures ongoing improvement.
If multiple campaigns are targeting similar audiences, you may be bidding against yourself, inflating CPM. Use Amazon DSP overlap reports to minimise internal competition.
Improving CTR while reducing CPM in Amazon DSP requires a combination of smarter targeting, creative optimisation and bidding discipline. The focus should always be on showing the right ad to the right person at the right time — efficiently.
At DWAO we specialise in optimising Amazon DSP campaigns by balancing cost efficiency with engagement. From audience strategy and creative testing to bid optimisation and reporting, our team ensures that every impression works harder for your brand.
If you want to unlock the full potential of Amazon DSP with higher CTR and lower CPM, DWAO is here to guide you.