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Marketing | Amazon
Lowering CPM on Amazon DSP without hurting performance requires smarter...
By Vanshaj Sharma
Feb 06, 2026 | 5 Minutes | 
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Amazon DSP can feel like walking a tightrope sometimes. You want to lower your CPM, but not at the expense of the results that actually matter. It a balancing act that trips up even experienced advertisers who think they can just dial down bids and call it a day.
The reality is more nuanced. CPM optimization isn't about slashing costs blindly. It about making smarter decisions with targeting, creative and bidding strategies so that every impression counts for something. When done right, you can bring down that cost per thousand impressions while keeping conversions steady or even improving them.
Cost per mille directly impacts how far your budget stretches. If you're paying $15 CPM instead of $8, you're getting nearly half the impressions for the same spend. That matters when you're trying to scale or test new audiences.
But here where people get it wrong. They see CPM as the enemy and start making cuts that hurt performance. They block placements, narrow audiences too much, or switch to the cheapest inventory available. Then they wonder why their ROAS tanks.
The goal shouldn't be the lowest CPM possible. It should be the most efficient CPM for your campaign objectives. That means understanding where your audience actually converts, not just where impressions are cheap.
Broad targeting might seem like a safe bet, but it often means wasted impressions on people who will never buy. Tightening your audience parameters can reduce CPM because you're bidding in less competitive spaces while still reaching relevant users.
Look at your Amazon Marketing Cloud data if you have access. See which audience segments are actually driving conversions. Maybe in market audiences perform better than lifestyle segments. Maybe retargeting past website visitors beats prospecting cold audiences. Use that insight to cut the fat.
Contextual targeting also deserves more attention. Instead of layering on demographic filters that drive up competition, try aligning your ads with relevant product categories or similar ASINs. The auction pressure tends to be lower and the relevance can be just as strong.
When the same ad runs for weeks, people stop noticing it. Frequency climbs, engagement drops and the algorithm starts charging you more because your ad isn't performing. This is one of the most overlooked reasons CPM creeps up over time.
Rotating creative keeps things fresh. You don't need a massive production budget. Test different headlines, swap in new product images, or adjust your call to action. Even small changes can reset performance and bring CPM back down.
Dynamic creative is another option worth exploring. Amazon DSP can automatically test variations and serve the best performing combinations. It takes some setup, but the payoff is better engagement without manual creative swaps every few weeks.
Most advertisers set a bid and forget it. That a mistake. CPM fluctuates based on competition, seasonality and inventory availability. What worked last month might be overbidding now.
Switching from fixed bids to dynamic bidding can help. Let the algorithm adjust in real time based on the likelihood of conversion. You'll pay more for high intent impressions and less for the marginal ones. Over time, this can reduce average CPM while maintaining or improving results.
Dayparting is another lever. If your audience converts better during certain hours, focus your budget there. Running ads 24/7 at full throttle often means paying premium rates during low performance windows. Scaling back during off peak times can lower overall CPM without sacrificing much volume.
Amazon DSP offers impressions across a massive range of placements, from Fire TV to third party websites. Not all of them will perform equally for your goals. Some placements have higher CPMs but also higher conversion rates. Others are cheap but deliver little value.
Review your placement reports regularly. If certain sites or apps consistently underperform, block them. But don't go overboard. Cutting too many placements shrinks your available inventory, which can actually increase CPM because you're now competing harder for fewer impressions.
The key is surgical exclusions, not blanket bans. Keep the placements that work, even if they cost a bit more. Drop the ones that clearly don't. That selective approach keeps your CPM reasonable without kneecapping reach.
Showing the same person your ad 20 times in a week rarely improves outcomes. It just burns budget and inflates CPM. Frequency capping limits how often an individual sees your creative, which can reduce wasted impressions and lower costs.
Set caps based on your campaign type. For awareness campaigns, maybe 3 to 5 impressions per week makes sense. For retargeting, you might go higher since those users are already familiar with your brand. Experiment to find the sweet spot where performance holds but waste drops.
Amazon DSP accesses inventory through multiple supply paths. Some paths have more intermediaries, which means higher fees baked into the CPM. Supply path optimization cuts out unnecessary middlemen, letting you access the same inventory at a lower cost.
This feature isn't always turned on by default. Check with your account team or in your campaign settings. Enabling it can shave a few dollars off CPM without changing targeting or creative at all. It one of the easiest wins available.
There no one size fits all formula. What lowers CPM for one brand might not work for another. The only way to know is to test systematically. Change one variable at a time, measure the impact, then iterate.
Track more than just CPM. Watch conversion rate, ROAS and total attributed sales. Sometimes a slightly higher CPM is worth it if the quality of impressions improves. Other times, a lower CPM opens up scale without hurting efficiency.
The brands that win on Amazon DSP are the ones that treat it like an ongoing process, not a set it and forget it channel. Keep optimizing, keep learning and the results will follow.
Improving CPM on Amazon DSP doesn't mean racing to the bottom. It means spending smarter. Refine your audiences, refresh your creative, adjust your bids and cut the placements that don't pull their weight. Each of these moves can chip away at cost while keeping the metrics that matter on track.
The real skill is knowing when to push for efficiency and when to let CPM run a bit higher because the returns justify it. That judgment comes with experience, data and a willingness to test without fear. Do that and you'll find the balance that works for your brand.