Ad Tech & Programmatic

Amazon rolls out ‘advanced machine learning models’ to DSP ahead of upfronts

The updates are aimed at improving audience targeting and cost-efficiency.
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Ahead of its upfronts presentation next month, Amazon has made updates to its demand-side platform. Specifically, it is using “new, more advanced machine learning models” in an effort to improve audience targeting and cost-efficiency, the company announced. 🤖

  • The updates returned a 34.1% increase in return on ad spend and a 24.7% decrease in cost-per-click, according to an internal study.

Buzz, buzz: Terms like “artificial intelligence” and “machine learning” have become industry buzzwords, but they’ve long helped power programmatic advertising. Meta credited heavy investments in artificial intelligence with helping it navigate Apple’s privacy changes, per the WSJ.

“In the age of AI, models will make more news,” Neal Richter, director of advertising science at Amazons DSP, told Marketing Brew.

Duopoly: Amazon’s an advertising behemoth. When the company first broke out advertising revenue in 2022 it revealed the business brought in $31 billion in 2021. By next year, Amazon is expected to capture 12.7% of all US digital ad dollars, just behind Google and Meta, according to Insider intelligence data cited by Axios.

Amazon’s DSP in particular lets advertisers bid programmatically on inventory throughout the Amazon marketplace, on streaming inventory, and across the web. The fact that Amazon can tie an ad impression back to its e-commerce platform, the fourth most visited website in the US according to Similarweb, gives it a leg up on other programmatic providers.

“The basis of our expertise is really measurement,” Richter said, later adding that “our connection and instrumentation to the store allows us to really pay very close attention to the success of advertisers.”

Elsewhere: The programmatic space has gotten a little spicy recently as DSPs and SSPs box each other out for direct deals between advertisers and publishers.

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Marketing Brew informs marketing pros of the latest on brand strategy, social media, and ad tech via our weekday newsletter, virtual events, marketing conferences, and digital guides.