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.
- 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?
|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.
Other Good Reads and References on DSPs
- Google Whitepaper the arrival of real time Bidding
- Will Wall Street Quants Corrupt Online Advertising?
- A quick guide to demand-side platforms
- Not Every Demand-Side Platform (DSP) Is Created Equal: What Is A True DSP?
- The Rise of DSPs
Hope the article above helps. Please share via comments.