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What is a DSP? Demand-Side Platforms Explained | Digital Media Jobs

Demand Side Platforms Explained

DSP stands for Demand Side Platform, but what does it actually mean? Lots of terms and concepts in the programmatic advertising ecosystem can be hard to understand and even more difficult to explain.

In this article, we’ll walk you through all there is to know about DSPs, how they work, and the role they play in Programmatic Advertising.

How an Ad gets to you

The world of online advertising functions much like traditional advertising: at its core, advertising of any form is all about getting you, the consumer, to view an ad, sign up for some list, become aware of a product or service, or purchase something.  

Even in the online ecosystem, advertisers and their agencies still need send orders in to publishers for ad space in a variety of formats, which means that traditional media orders and buysheets aren’t totally dead. However, programmatic advertising allows advertisers to automate away a lot of the manual work – meaning that insertion orders and complicated media buying worksheets are on their way out.

Ad agencies work with advertisers to come up with a variety of marketing materials – from simple text ads all the way to fully interactive expandable ads and entire websites. They load the digital versions of these marketing materials into an ad server, and the DSP allows them to place bids for showing these materials on available online ad space. This can happen directly, or via a DSP ad network. The publisher’s Supply Side Platform (SSP) accepts these bids from the DSP, and routes the winning ad to their ad server, where it’s made available to the user.

DSP advertising attempts to make the complex system of finding and placing ads simpler, faster, and more affordable, with much of the underpinnings hidden away from the businesses using them. The system itself is also virtually invisible to end users just browsing the web, so it doesn’t interfere with the user experience at all either.

What is a DSP, exactly?

DSP advertising companies create complex and intelligent software to enable the online trading of ad space. But how does this actually work?

At their core, DSPs are extremely complex, web-connected databases. They use human interactions and machine learning to optimize and track available ad space and the users those spaces refer to. This all happens on the backend via DSP ad networks – the “brokers” of this system.

These networks are what actually “announce” the available ad space to the DSP system itself. Through machine learning processes, DSPs attempt to find the best possible traffic (usually the highest chance for conversion or click through) at the lowest possible price, allowing the advertiser to place ads more efficiently, and get more value out of their ad spends.

You may have heard people talking about “DSP SSP” systems – these are closely related, but not the same thing. SSP software is what publishers use to make ad space available. Using similar machine learning processes, it attempts to earn as much money as it can for the publisher. We’ll go over the differences of SSP vs DSP a bit later in this post.

Comparing the best DSP platforms

As with any other business, there’s a lot of competition in the DSP space. New vendors open and old vendors close down regularly, so the options are constantly changing. Few DSP systems have stood the test of time – but those are the ones we’ll review in detail here.

The Trade Desk

This is the big daddy of DSPs. One of the first and one of the best DSPs available, The Trade Desk DSP offers a large feature set and some of the most flexible bidding terms available. This doesn’t come free, however, as use of the platform requires significant monthly minimums which may be too high for an individual advertiser. Because of cost considerations, this software platform is mostly used by agencies.

The Trade Desk Pros & Cons

Pros:

  • Intelligent bidding – ability to modify bids on the fly based on any number of factors
  • Integrated DMP
  • Private video marketplace – exclusive to Trade Desk users
  • Programmatic Connected TV options available
  • Detailed reporting makes it easy to slice data
  • Unique custom-built AI platform

Cons:

  • Expensive, high minimums required each month to maintain access
  • Access to ad inventory is uneven – extensive in some areas, limited in others
  • Doesn’t always play nice with other DSP software for reporting purposes

Adobe Experience Cloud

Adobe’s software is focused on connection and bringing data together to make better decisions. What it lacks in reach, it makes up for in reporting, analysis, and targeting tools.

Adobe Experience Cloud Pros & Cons

Pros:

  • Best reporting and targeting system available
  • Can handle multiple ad formats like search, TV, social, and video
  • Cross-screen planning so you can run one campaign across media types
  • Premium inventory manager brings campaigns that would normally run separately into the platform directly
  • Multiple-device targeting instead of cookie targeting

Cons:

  • AI is offered as a paid upgrade
  • Some complaints that the interface can be clunky
  • Limited reach
    • Despite all the backend benefits, if your ad can’t reach people it can be hard to justify selecting this software

Taboola

This is a unique DSP, focused more on video and content discovery than direct advertising. It has been criticized for having a spammy end-user experience, and it doesn’t always generate the best CTRs, but it’s typically much more affordable than the larger, more sophisticated platforms.

Taboola Pros & Cons

Pros:

  • Unique content-focused DSP
  • Wide reach, with placements on sites like Bloomberg, MSN, and NBC News
  • Brand safety tools
  • Offers different options for each level of the marketing funnel

Cons:

  • Tracking and reporting is not the best
  • Comes across as spam on many sites
  • Private marketplace only, limiting options for ad placement

Amazon DSP

This is the exclusive way to access Amazon’s network of ad space. This includes Amazon, of course, but also other sites they own such as IMDb and Zappos.

Amazon DSP Pros & Cons

Pros:

  • The only DSP with direct access to Amazon’s ad inventory
  • Unique reporting options available for Amazon-based inventory
  • Integrates with other Amazon services, like Transparency and Brand Registry
  • Kindle advertising available

Cons:

  • Only supports display and video ads
  • Limited reach outside Amazon’s network of sites
  • Access requires minimum monthly spend
  • Few agencies are operating in the Amazon ad space
  • Limited reporting for third-party ad networks

Is a DSP also a DMP?

This is a bit of a complex question, because a DSP can incorporate a DMP, but it doesn’t always. These two separate pieces of software work well together though, so there’s a good reason to choose a DSP that also has a DMP, or which is at least capable of interfacing with one.

DMPs are Data Management Platforms. These systems bring together data from different sources and use it to define target markets and target individuals across devices with high precision.

  • 1st party data - Data you already own, like subscriptions, demographic info, contact info, behaviors, purchase history from your website, cookies, social media, apps, etc.
  • 3rd party data - Data that is purchased from companies that have purchased 1st party data from publishers

Data Management Platforms are an important piece of the programmatic puzzle, and programmatic teams should consider how well a potential DMP interfaces with their chosen DSP when making the decision on which one to utilize.

Other elements of the Programmatic Ecosystem

There are quite a few other elements that DSPs connect to and work with. We’ve got a complete guide to the programmatic world available as well, but here’s a quick overview of what each piece does:

  • Ad Server – Hosts all the data and media filed for each advertisement. These are normally connected to the DSP, but a publisher may also have one on their end
  • Ad Network – Ad Servers and DSPs connect to these to find and traffic ad opportunities across the internet
  • Ad Exchange – These are larger networks, usually made up of multiple ad networks. They have a lot of key differences, so we recommend viewing our full post on the subject
  • Data Management Platform – These connect with DSPs to act as an assistant. Advertisers can use this to more effectively target and segment users. Publishers can use it to optimize their available ad space and more effectively price their ads
  • Line Items – These are what advertisers enter in DSP software systems to instruct the system what sort of user to target. Similarly, advertisers use this to communicate what sort of space is available.

Why are there 2 platforms? DSP vs SSP

One of the most complex parts of programmatic marketing is understanding how everything works, because of how complex the system has grown to become.

DSPs and SSPs are essentially the same software, doing many of the same processes – just in opposite directions.

The reason these two systems each exist, and operate individually, is to accommodate the different goals inherent in each side of the programmatic equation.

Publishers want to make the most money possible, and advertisers want to pay the least amount of money possible.

If campaigns were managed by a single system handling both tasks, it could unfairly benefit a particular side – by forcing two systems to work against each other, this helps ensure the marketplace stays fair and balanced.

Your Next Steps

Where do you go from here?

Now that you’ve learned more about how programmatic advertising works, why not look into getting started with a programmatic career of your own? You can find available Programmatic Marketing Jobs, and other jobs in digital advertising, by visiting our Jobs page!