The Cookie is Crumbling: Walled Gardens, 1st Party Data, and Amazon DSP
August 4, 2023
By: Matt Wiklund, CTO of Ad Advance
In today’s digital-first world, marketers face challenges in understanding and engaging with customers across multiple touchpoints. The complexity of customer journeys and the growing use of various devices make it harder to identify and create personalized experiences for users.
There are two primary identity resolution models used to bridge this identity gap: probabilistic data modeling and deterministic data matching. Each one serves a different purpose, so it’s important to understand how they’re used and the information they offer.
Probabilistic vs. Deterministic Matching
Probabilistic data is based on behavioral events like page views and click-throughs, analyzed to group users according to the likelihood of belonging to certain demographics or interests. On the other hand, deterministic data is linked to something identifying a user, like an email address or a cookie ID, providing a solid foundation for accurate marketing efforts.
As we move into a cookieless future, first-party data providers have an immense advantage over platforms relying on 3rd party data. First-party data, like deterministic data, offers factual information about customers, allowing for better personalized targeting. Additionally, first-party data is not subject to the same privacy concerns as 3rd party data, as it comes directly from users who have willingly shared their information with the platform.
The Advantages of Amazon DSP
Amidst the changing landscape, Amazon stands out as one of the best examples of a walled garden with a treasure trove of first-party data. While some believe Amazon Advertising is exclusively for brands on its marketplace, Amazon DSP offers its demand-side platform to both advertisers who sell products on Amazon and those who do not.
Amazon DSP empowers advertisers with near-unmatched access to first-party insights based on billions of observed shopping patterns across the customer decision journey. Unlike Google and Facebook, whose data is based on browsing behavior and social engagement, Amazon’s data is rooted in actual shopping data, making it one of the best databases for brands.
The impending deprecation of third-party cookies has put Amazon’s first-party data in a league of its own. As nearly 61% of US consumers begin their product hunt on Amazon, the platform has access to immense 1st party deterministic data needed to target users across devices with a high level of attribution accuracy. This advantage makes Amazon practically unscathed by the upcoming changes, as almost all of its data is first-party.
Precision Advertising with Amazon DSP
Amazon DSP offers precise targeting capabilities across multiple devices and formats. Advertisers can reach Amazon shoppers at scale, whether on or off Amazon, by leveraging both Amazon’s audiences and their own data. This combination ensures reaching the most relevant audiences with a high level of attribution accuracy, a crucial asset in the evolving cookieless landscape.
Moreover, Amazon DSP provides comprehensive and unique supply opportunities. Advertisers can access a wide range of creative formats, including programmatic display, online video, connected TV, and audio/podcast ads. Amazon DSP provides exclusive access to premium O&O inventory like Twitch, IMDb, and FireTV, as well as immense access to inventory from its SSP – Amazon Publisher Services – and dozens of top third-party publishers. This diverse supply allows advertisers to reach Amazon’s vast user base wherever they shop or consume content.
To further empower advertisers, Amazon DSP offers next-level audience insights and performance analytics. Advertisers gain access to robust reporting and analysis pre-, during, and post-campaigns. Additionally, the Amazon Marketing Cloud (AMC) serves as a data clean room, enabling advertisers to merge insights from various sources and build custom-defined, anonymized audience engagements based on limitless combinations of interactions.
Despite its exponential growth, Amazon Advertising is still underutilized and misunderstood in the programmatic space. Many mistakenly believe it’s exclusively for brands selling on its marketplace. In reality, Amazon DSP is accessible to a wide range of businesses, except for those in specific verticals that don’t comply with certain creative acceptance rules.
As the digital advertising landscape evolves and privacy concerns reshape the industry, Amazon’s first-party data advantage positions it as a formidable player, providing advertisers with unparalleled precision, reach, and performance. Marketers who recognize and harness the power of Amazon DSP are likely to be at the forefront of successful advertising campaigns in the cookieless era.