Demand-side platforms (DSP) and supply-side platforms (SSP) make the process of publishing an ad efficient and near-instantaneous. Gone are the days when ad buying and selling included manual insertion orders, sit-down meetings, and contracts.
So, what is a DSP, and how does it work? Let’s dive in.
What is a DSP?
Demand-side platforms are used by advertisers to buy mobile, search, and video ads from a marketplace on which publishers list advertising inventory. With DSP advertising, it’s simpler to manage accounts across real-time bidding networks – like Google Ads and Facebook Ads Manager – instead of logging into each one individually.
What is the difference between DSP and SSP?
Supply-side platforms, or SSPs, serve a different purpose than demand-side platforms but both play an important role in the programmatic advertising space.
An SSP allows publishers to include their inventory to ad exchanges, and they communicate with DSPs about the details of an impression.
In other words, DSPs don’t own or purchase media directly from publishers, but instead communicate with an SSP through the ad exchange.
Together, DSPs and SSPs enhance the digital advertising landscape and make the process of bidding on ads and managing ad inventories easier than ever before.
DSP marketing is a modern example of how automation is being used to streamline processes and boost productivity.
The world of digital display advertising moves quickly and marketers need to be able to make snap decisions and adjustments in order to optimize performance of their ads.
Programmatic advertising using DSPs and SSPs makes it easy to adjust campaigns in real time by automatically increasing budget for well-performing ads, pulling campaigns that are not performing well, or scaling for mobile optimization.
What are the main components of a demand side platform?
There are several capabilities and components that can be found in a DSP, including:
- Real-time bidding (RTB): A real-time bidder is a crucial component of a DSP. A DSP will automatically bid for ad impressions that are most valuable based on the advertiser’s goals.
An advertiser will specify who they want to reach with ads and how much they are willing to spend. From there, the platform will automatically facilitate bids on the advertiser’s behalf against other advertisers trying to reach the same target audience.
How is that done? When a prospect lands on a page, such as a Google search for a type of product, algorithms determine which ad to display in real-time, using data like browsing history, time of day, and IP address. The business that bid the highest for the impression based on this data wins the placement.
- Ad server: A server, in this sense, is the actual mechanism that serves the ad elements to the publisher’s website; DSPs either work with external servers or have a proprietary, built-in one. Aside from serving ad elements, the DSP ad server will also track impressions and conversion data and use that information to optimize an ad campaign.
- Campaign tracker: One of the clearest benefits of using a demand-side platform is that it automatically pulls in data that will be used to make decisions about the campaign itself, so naturally, the ability to track campaigns is an important component of a DSP.
The campaign tracker monitors and records ad data like impressions, views, clicks, click-through rates (CTRs), conversion rates, ad spend, and more. This information will determine how effectively an ad is performing and whether more money should be spent on it or if it should be stopped altogether.
- User profiles: When a user views an ad served by a DSP, that user’s data is captured and stored. Over time, the DSP will continue to build that user’s profile, collecting insights about the types of ads they are viewing, where they’re viewing them, and where/when they are clicking.
These profiles are used to segment people into different audiences, with those segments determining which profiles will be used in remarketing or optimization campaigns.
- Budget management: Another benefit of using automation to optimize ad campaigns is that a predetermined budget will be spent in the most efficient way possible. With a DSP, this is accomplished through a component known as a banker or cashier, which is essentially what manages an advertiser’s budget.
Through the banker, an advertiser can specify parameters about their campaign, such as the maximum amount of money they are willing to spend and how they are willing to spend that money.
- Integrations: These days, any decisions about adopting new technologies depend on how well or not those technologies integrate with other tools. This is the case with DSPs as well. Demand-side platforms integrate with ad exchanges and supply-side platforms, as well as tools that facilitate data management, analytics, payment processing, and security.
When it comes to SSPs specifically, a DSP will most likely integrate with several supply sources, which would allow an advertiser to broaden their reach.
Top demand-side platform (DSP) examples
Let’s explore five different demand-side platform examples:
1. Amazon DSP
Best for: Amazon-owned sites and brands that want to advertise on Amazon
This is one of the better-known DSPs. Anyone can use Amazon DSP, whether they sell their products on Amazon or not. The Amazon DSP site says that self-service and managed-service options are available. Self-service customers are in full control of their campaigns. The managed-service option is designed for companies that want access to Amazon DSP inventory with consultative service or for those with limited programmatic advertising experience. The managed-service option typically requires a minimum spend of $50,000 USD (minimum may vary per country).
2. Google Display & Video 360
Best for: Small business and enterprise
Perhaps the biggest advantage of Google DV360 is that Google is a trusted brand. DV360 is an end-to-end campaign management tool that delivers robust insights, helps advertisers optimize campaigns, and integrates with other solutions that allow you to connect data and workflows across products.
3. StackAdapt
Best for: Advertising agencies looking to grow their business
StackAdapt markets itself as an open, flexible DSP designed to help advertisers and agencies plan, execute, and analyze campaigns for their clients. Machine learning and AI are at the core of their technology, which means campaigns are optimized for performance. They also offer comprehensive customer success guidance so that agencies feel supported along the way.
4. Equativ
Best for: Both advertisers and publishers who want to connect
Equativ operates as a marketplace for customers, with both DSP and SSP products. They have spent two decades building ad servers and working directly with advertisers, publishers, broadcasters, and rights owners to fully understand the whole scope of modern programmatic advertising. They offer an advertising marketplace, monetization solutions for publishers, and business scaling services.
5. Jampp
Best for: Mobile companies who want to grow their business
Jampp is tailor-made for mobile companies like gamers, anyone promoting in-app activations, those targeting ecommerce shoppers, and more. Jampp uses contextual and behavioral signals to forecast in-app conversions. They build and rotate creatives to exceed goals and provide deep insights via their campaign performance dashboards.
Why do you need a demand-side platform?
Using a DSP has advantages and disadvantages—and each platform is a little different. It’s important to understand your options before investing in this type of software.
Pros of using a DSP
- Efficiency: If you’re managing campaigns across many networks, a DSP allows you to view and adjust all of your advertising from one dashboard. This allows advertisers to reach and activate customers at scale.
- Data: Many DSPs partner with third-party data providers to offer advertisers as much information as possible. Often, it’s more than a single network can provide. Additionally, there are many demand side platforms that allow advertisers to import their own data from a CRM or a DMP (data management platform).
- Targeting: More data gives advertisers pinpoint targeting capabilities. Better targeting means more personalized ads and landing pages, which means a higher likelihood of conversion.
- Support: Often, DSPs provide support beyond the traditional help desk-style customer support of a single network.
- High-quality inventory: DSPs will have access to the major networks and then some. If you’re after more premium inventory, a demand-side platform may be what you’re looking for. Some have more access than others, though, so it’s important to compare offerings before you pick one.
Cons of using a DSP
- Cost: DSPs can require significant investment, so it’s important to understand the minimum monthly or campaign spend required before selecting an option. A managed DSP, such as The Amazon Managed Services DSP, may require $35,000 ad spend or more. A self-serve option may only require $3,000 – $12,000 for a campaign but needs a greater investment of time to manage the process.
- Complexity: Whenever you aggregate data, you run the risk of overcomplicating things. Some advertisers may find demand-side platforms too complex to learn. In this case, sticking with individual online advertising channels makes sense.
- Time: You need to be prepared to invest time up-front to learn and incorporate new software into your tech stack. Alexa Wieczorek, Growth Marketing Manager at Electronic Arts, says that “DSPs can take 1-2 months or more to ramp up, especially if it’s in-house where you develop your own bidding algorithm.”
The basics of programmatic advertising
Let’s say a marketing manager visits your demo landing page. She didn’t request a demo, but she’s expressed interest in your product by visiting your page. This makes her more valuable to you than somebody who’s never visited your website or interacted with your brand.
In that case, your DSP will likely bid higher for her impression. Whether you win the bid will depend on how valuable this impression is to other businesses. Maybe this same person abandoned her cart on an ecommerce website. If that’s the case, the ecommerce website may bid more to serve an ad that gets her to the checkout page. It all depends on the budget of the bidder and the value of the impression.
This process is facilitated automatically by the SSP, DSP, and the ad exchange between advertisers and publishers.
Get the most out of your tech stack
For some businesses, a demand-side platform can increase efficiency and their broader reach to prospects across multiple ad exchanges, including more premium digital ad inventory. For advertisers or media buyers who don’t have a large advertising budget, the cost and complexity of a DSP may outweigh the benefits. In this case, using a small number of individual platforms, such as Google and Facebook, will likely be sufficient.
No matter how you manage your digital advertising, getting the most out of your ad spend requires connecting all of your ads to relevant, optimized landing pages. Find out how easy it can be to create landing pages for all your advertising campaigns and audiences by signing up for the Instapage 14-day trial today.