Over the years, many marketers have embraced the mantra “content is the king” regarding online promotion. But let’s face it: paid advertising plays a huge role, too, in this advertising ecosystem.
And to validate that, we just need to look at the numbers: global digital ad spending is growing, reaching nearly $600 billion in 2022, and it is expected to climb even higher in the next few years.
The significance of this trend is obvious. In digital, programmatic advertising has won the spotlight over the past few years and has become increasingly complex, with new roles emerging for players in this space.
Now, programmatic advertising has become pretty complex. Depending on your goals, there are different platforms for buying and selling ad space.
For instance, as a marketer, especially if you’ve worked in PPC, you might have dealt with programmatic ad platforms for your clients that are probably, at their core, DSPs, even if you didn’t fully know that. And that’s OK – we’re all learning as we go!
That’s why, in this article, we will discuss a small part of programmatic advertising: demand-side platforms (DSPs), which many advertisers and marketers interact with to buy ad space.
We’ll explore this essential part of programmatic advertising and help you recognize a DSP the next time you come across one.
Table of contents
What is a Demand-Side Platform?
Basically, a demand-side platform (DSP) is a programmatic advertising platform that helps advertisers buy ad inventory from multiple ad sources. Advertisers can set up, run, manage, and optimize campaigns on publishers’ available ad space on a demand-side platform.
Usually, demand-side platforms contribute to the advertising process along with ad exchanges, ad networks, and supply-side platforms. And even if this process takes only a few milliseconds, it is pretty complex at its core.
How Do DSPs Work?
When an advertiser wants to run a campaign, the DSP is triggered and starts storing information about that ad, such as the audience it aims to reach, the ad format, and the ad size. To enhance audience targeting, many advertisers integrate a Customer Data Platform with their DSP, enabling them to leverage first-party data for more precise, personalized ad placements. Once it has the data it needs, the DSP communicates with ad inventory sources, such as ad exchanges and SSPs (Supply-Side Platforms), to find the best proposals.
Supply-side platforms and ad exchanges also provide information about the ad space they offer, including the users who might be delivered to, the specific ad, and the available ad format.
The DSP bids for the ad inventory that matches its requirements, and the highest bid wins a specific ad slot. The demand-side platform fully automates the decision-making process for bidding on ad space.
Why is a Demand-Side Platform Important?
Demand-side platforms significantly simplify ad inventory buying, making it more efficient and reducing costs.
If there were no such programmatic advertising platforms, the whole process would involve hundreds, if not thousands, of advertising agents negotiating with publishers to deliver their ads online (and would also need to be paid).
This would take longer and affect both publishers and advertisers, as huge numbers of potential customers would be lost during the process, and advertisers’ lack of success would lead to lower bids for publishers’ ad inventories.
Furthermore, demand-side platforms allow advertisers to optimize, analyze, and track the results of their campaigns. DSPs usually offer detailed dashboards with insights that can increase ad relevance, shape the audience to achieve better results, and use the advertising budget efficiently.
DSP vs. SSP
Strictly speaking, SSPs and DSPs act similarly but on opposite sides of the RTB process. So, while DSPs help advertisers and ad networks buy ad inventory efficiently, SSPs help publishers and even ad networks sell their ad spaces as efficiently as possible for the best price.
A supply-side platform consists of software that helps publishers sell their ad inventory automatically. SSPs usually work with DSPs, ad exchanges, and ad networks to streamline the RTB (real-time bidding) process. Through these programmatic advertising platforms, publishers and various types of advertising platforms can sell available slots quickly and monetize their unsold inventory. For example, Sevio Ad Manager helps publishers around the world optimize ad delivery and maximize revenue. Sevio handles everything from managing ad space on a publisher’s website/app to automatically connecting with ad buyers.
There may be some similarities between DSPs and SSPs, but the two concepts differ regarding their main features and goals. However, they are developed to work together.
First, the two platforms contribute to the same process: ad space buying and selling. However, DSPs are designed for the “buying” side of the advertising process, while SSPs handle the “selling” side. Thus, the purpose of DSPs and SSPs is different, and so are their end users: the former is developed for advertisers, while the latter’s users are mostly publishers, though in some situations SSPs may be useful to ad networks, too.
Then, the features provided by DSPs and SSPs differ from one platform to another, too. DSPs usually offer users insights about their campaigns and even let them optimize them based on those results. On the other hand, SSPs are designed to aggregate free advertising space across multiple channels and various advertisers who can fill it.
This separation between buy-side and sell-side is increasingly being challenged. Thus, some platforms now combine both functions within a single infrastructure, known as a unified advertising platform.
Who is a DSP for?
We mentioned before that demand-side platforms deal with the “buying” part of the advertising process. This means they are constantly looking for available ad inventory to bid on.
Thus, it is fair to say that DSPs are developed for advertisers who want to promote their businesses or ad platforms in need of more inventory. This may include companies, ad agencies, freelance marketers, ad networks, and online and offline services.
How Do DSPs Help Advertisers?
DSPs catalyze the buying of ad space, reducing the time from some hours or days to just a few milliseconds. This can help advertisers get new conversions faster and shorten or streamline the sales funnel.
Moreover, a DSP will always bid for ad space according to an advertiser’s budget and audience, aiming to get the best ad slots with the lowest bid possible. This can lead to a more efficient way of spending the advertising budget, thus giving the advertiser more opportunities for their online campaigns.
Best Demand Side Platform Companies
1. Google Marketing Platform
Google does not disappoint when it comes to the advertising platforms it offers. And it is the same with Google Marketing Platform, a unified advertising and analytics service that suits small to large businesses.
Google Marketing Platform offers various products that help advertisers manage their campaigns, including GDV (Google Display & Video) 360, Campaign Manager 360, and Search Ads 360, 3 of the most popular. With a user-friendly interface, Google Marketing Platform allows advertisers to seamlessly manage, track, and optimize their ads on various channels.
Furthermore, one of Google’s treasures is that every product can be easily integrated with other platforms the company developed, thus offering marketers a complex and valuable experience.
2. Amazon DSP
As the second biggest and most popular tech company in the world, Amazon could not stand aside; thus, it launched Amazon DSP. Amazon DSP is available for those aiming to advertise on Amazon or other Amazon-owned websites, regardless of whether you sell products on the platform.
Amazon DSP has two options for advertisers: managed service or self-service. The self-service option is entirely free and can be used by any advertiser who decides to conduct the whole process independently. However, if somebody chooses managed service, they will have to pay at least $50,000 to be constantly guided in what concerns the ad buying process.
3. Basis Technologies
Rated the first demand-side platform for 16 consecutive quarters, Basis Technologies was developed to offer advertisers a complex and significantly helpful product. Its interoperability with social, search, and ad server platforms allows users to use programmatic advertising at its finest.
To streamline the advertising process even more, Basis Technologies has developed a billing automation feature. Moreover, the platform offers thousands of premium publishers that advertisers can choose from.
4. Smadex
Specializing in the mobile sphere, Smadex is a demand-side platform developed to ensure growth for its users. The platform uses programmatic advertising, first-party data, and machine learning to offer a mobile-first DSP solution.
Furthermore, Smadex always focuses on security, thus assuring users that their campaigns reach safe and trustworthy publishers.
5. MediaMath
Founded in 2007, MediaMath delivers several valuable tools to help marketers manage their ads. MediaMath focuses on its clients and ensures that its customer service offers advertisers a positive user experience.
MediaMath is integrated with several ad exchanges, thus offering advertisers numerous places to advertise. Moreover, the platform offers various data analysis tools and a customer database.
MediaMath is in to revolutionize the field, using an advanced predictive algorithm that helps advertisers make the right bids to maintain their profitability.
In September 2023, MediaMath was bought by Infillion in a $22M deal.
Key Takeaways
- Digital advertising has come a long way and does not plan to stop. In the advertising process, supply-side platforms and demand-side platforms play a crucial role in streamlining the buying and selling of available ad space.
- Also called DSPs, demand-side platforms use programmatic advertising to facilitate the buying of ad inventory, thus reducing the time needed to deliver campaigns. Buying ad space usually takes up to a few milliseconds.
- Unlike SSPs (supply-side platforms), DSPs focus on bidding on publishers’ available ad space and getting the best ad space for the lowest bid. DSPs are developed for businesses seeking to advertise their products or services.
- Some of the most popular and helpful demand-side platform companies are Google Marketing Platform, Amazon DSP, Basis Technologies, Smadex, and MediaMath.
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