Sep 092011

Ever wondered what is Demand Side Platform? Media buyers are using DSPs as another platform to buy media which is different than other forms of buying Display media.

Current Media Buying Environment

  • Online Ad inventory (placements for ad online) is more abundant and ever increasing with more sites, blogs, social networks etc. This means there are multiple buying options for a brand for buying Ad Placements.
  • Options for buying Ad online:
    • Direct from Publishers
    • Ad Networks which handle inventory from multiple publishers.
    • Bid-Based exchanges through various pricing options such as cost per impression, cost per click or cost per action.
    • DSPs
    • Agency Trading Desk
    • Real Time Bidding (RTB)

    Definitions of all above can be found in Excellent detailed PPT for various kinds of Display Media Buy.

What is a DSP?

As this is a little complicated, I collected definitions through various sources to help us understand DSPs better.

  • A dedicated buy-side tool that helps media buyers aggregate, bid on, and optimize display inventory across exchanges and ad networks.
  • A developed technology that enables advertisers and agencies to use “real time bidding” to buy display ad space, and to optimize display ad campaigns, across multiple advertising exchanges, all in a single interface.
  • Real-time bidding platforms to buy highly targeted “audiences” – buying display and video ads on the fly to reach in-market consumers right when they’re researching products or are ready to make a purchase.
  • DSPs include companies who built their technology and services solely for “demand side” of the industry the agencies and advertisers.

What is the difference between DSPs and Online Ad Exchanges?

Ad exchanges and DSPs

Ad exchanges and DSPs

Online Ad Exchanges  DSPs 
Examples: Yahoo! bought Right Media in April, Google bought DoubleClick in May and Microsoft bought AdECN in August , all in 2007 Examples: Dataxu, Invite Media (acquired by Google in 2010), Turn, Mediamath, Xplusone
Enable bid-based ad “trades” between buyers and sellers on their platforms. In this case, media buyers have to use a different system to access each exchange. DSPs allow media buyers to buy from multiple biddable media sources through a single interface, which gives buyer access to more liquid inventory.
Buying from multiple exchanges is time consuming and inefficient from companies. Manage, optimize, and execute bid-based buys. DSPs also feature algorithmic optimization capabilities that dynamically alter bid prices based on performance data.
Ad Exchanges is a layer below DSP. DSP is a layer on top of AD exchanges. These companies can access inventory from multiple exchanges with no need to aggregate inventory through relationships with publishers.
Typical campaign buys from multiple ad exchange so it is difficult to achieve unique reach or optimal frequency. Reach and frequency can be better controlled using one interface.

Use of DSPs is constantly growing, but is still a small share in Overall Display Media Buying.

Percentage of DSP buy in Display Media Buy

Percentage of DSP buy in Display Media Buy

Other Good Reads and References on DSPs

Hope the article above helps. Please share via comments.

  7 Responses to “Quick Guide to Demand Side Platform (DSP)”

  1. Nice article on the subject as complex as DSP. Is there a difference in cost when ads purchased from ad exchanges and DSPs? Any information in this context would be very helpful. Thanks.

    • Thanks Ashish. I do not have much idea about cost. But, here are some of my thoughts. The cost will differ by brand and publisher. Buying from DSP might be more cost effective than buying from ad exhanges. I will try to look for cost information. Shilpa.

  2. Nice article

  3. Great explanation!!! Did DSP charge per transaction or per months? How the charging model works with DSP?

  4. Great stuff! Btw, are you in the media space ?

  5. hi Shilpa,
    Firstly congrats on the fantastic article above, very few people out there understand what a dsp is your article really helps .
    Can you tell us which is the leading DSP technology available in the market in India . Can a ad server be a DSP or viceversa or a DSP has to be integrated separately with it ? whats the difference between DSP vs SSP vs DMP ?

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