What Is A Demand-Side Platform (DSP)?

A demand-side platform (DSP) is a software solution that allows advertisers and marketers to purchase digital ad inventory across various ad exchanges, networks, and publishers in real-time, using a single interface. It streamlines the media buying process and helps advertisers to target specific audiences more effectively.

To understand what a DSP is and how it fits into the programmatic ad-buying process, one must understand the entire ecosystem. This diagram from Moloco illustrates it perfectly:

Credit: Moloco: DSP vs SSP

The diagram outlines the process of programmatic advertising and real-time bidding (RTB), illustrating the relationships between different elements in the ecosystem, such as advertisers, publishers, ad exchanges, DSPs, and supply-side platforms (SSPs).

How Does Real-Time Bidding and Programmatic Advertising Work?

Advertiser

  1. The advertiser sets up a campaign in their chosen DSP, including targeting criteria, budget, and creatives.
  2. When a user visits a publisher’s website or app, the publisher sends an ad request to the ad exchange via their SSP, including details about the user and the available ad space.
  3. The ad exchange matches the ad request with relevant advertiser campaigns in real-time.
  4. Advertisers, through their DSPs, bid on the ad impression based on the targeting criteria and their bidding strategy.
  5. The highest bidder wins the auction, and their ad is served on the publisher’s website or app.

Consumer

  1. The user visits a publisher’s website or app.
  2. The publisher sends an ad request to the ad exchange via their SSP, including information about the user and the available ad space.
  3. The ad exchange matches the ad request with relevant advertiser campaigns, and an auction takes place.
  4. The highest bidder wins the auction, and their ad is served on the publisher’s website or app.
  5. The user sees the ad, and if they find it relevant or interesting, they may click on it, resulting in a visit to the advertiser’s website or landing page.

A DSP fits into an overall marketing stack as a tool for programmatic advertising, complementing other marketing components like customer relationship management (CRM) systems, content management systems (CMS), marketing automation, and web analytics tools.

Why Do Companies Implement A DSP?

There are four key challenges that a DSP can overcome for a company looking to better invest and track its advertising budget:

  1. Fragmented ad purchasing: Buying ad inventory across multiple networks and publishers can be time-consuming and inefficient.
  2. Ineffective targeting: Companies struggle to find and reach the right audience segments for their campaigns.
  3. Difficulty in managing budgets: Allocating and optimizing budgets for different campaigns and platforms can be challenging.
  4. Lack of real-time insights: Companies need access to real-time data and analytics to make informed decisions and optimize their campaigns.

What Is The DSP Implementation Process?

There are quite a variety of features, functionality, targets, and integrations available for every DSP, so selection and implementation of the platform within your MarTech stack should be a careful process.

  1. Evaluate your needs: Determine your advertising goals, target audience, and budget to choose the right DSP for your business.
  2. Research and select a DSP: Compare different DSPs based on their features, costs, and target companies to find the best fit.
  3. Set up the account: Create an account with the chosen DSP and set up your payment information.
  4. Create and upload your creatives: Design your ad creatives and upload them to the platform.
  5. Set up targeting and bidding: Define your targeting criteria, such as demographics, location, and interests, and set your bidding strategy.
  6. Launch and optimize campaigns: Launch your campaigns and monitor their performance using real-time analytics, making adjustments as needed to optimize results.

How To Evaluate Your DSP Effectiveness

Monitoring these KPIs helps you evaluate the performance of your DSP selection and investment, ensuring that you’re maximizing the efficiency and effectiveness of your digital advertising campaigns for your desired action. Actions may be tracked by cookie tracking, click-tracking, landing page conversion-tracking, phone call tracking, or promotional code redemption.

A List of Leading DSPs

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