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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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:
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.
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!