Amazon: AI-powered ‘Performance+’ ads offer 30-90% lower CPAs

Amazon recently launched a new automated ad product called Performance+. Using a black box approach, it employs machine learning to optimize campaigns based on predicted conversion rates.

The big picture. Performance+ marks Amazon’s entry into the AI-driven ad automation space, pioneered by Google and Meta. This puts Amazon in direct competition with these internet giants for ad budgets.

Why we care. This offers advertisers an opportunity to diversify their ad spending and avoid relying solely on Google and Meta for AI-driven campaigns. Advertisers might prefer Amazon’s solution to Google and Meta because it provides more control.

How It works. Performance+ is housed within Amazon’s demand-side platform and uses an AI model to predict the likelihood of users converting on an hourly basis.

• Advertisers set target cost-per-acquisition goals and Amazon’s algorithms (using first-party signals) to handle campaign setup, audience targeting and optimization.
• The automated ad campaigns can run across Amazon’s owned-and-operated properties as well as external publisher inventory.

Key Features.

• Brand safety, pacing, frequency and viewability controls
• Custom attribution settings and reporting
• Designed for brands not currently selling on Amazon’s e-commerce platform

Performance Claims. Since launching in March, Amazon claims most Performance+ campaigns have achieved 30-90% lower CPAs compared to standard Amazon DSP ad buys with the same goals and formats.

What Amazon is saying. An Amazon spokesperson told Digiday (subscription required):

• “Our goal is to offer advertisers and agencies AI-powered efficiency with clear oversight, enhancing their marketing tactics and achieving their business objectives.
• “Performance+ simplifies programmatic buying while providing visibility into effective creatives, placements, and audiences reached, along with a range of controls to ensure ads reach the advertiser’s desired audience.” 

Bottom line. With Performance+, Amazon is aiming to leverage its valuable shopping data to drive more ad dollars while offering an automated ad product comparable to Google and Meta’s AI ad offerings.