Demand Side Platform

What is a demand side platform?

A demand side platform (DSP) is an automated programmatic advertising platform that allows advertisers to bid on display, video, mobile, and search inventory from various publishers. DSPs speed up the ad-buying process by bidding based on the advertiser’s criteria, placing the advertisement, and managing payment, all within seconds. 

Many in-house marketing teams, advertising agencies, and trading desks specializing in real-time ad placement use demand side platforms. DSPs integrate with ad exchanges to locate ad inventory, and some DSPs integrate directly with supply side platforms (SSPs) to allow publishers to sell their inventory to advertisers through it.

How do demand side platforms work?

Demand side platforms automate the ad-buying process and seamlessly connect advertisers with publishers to bid on ad impressions, otherwise known as successfully displaying the ad. DSPs work as outlined below: 

• Publishers use ad exchanges and supply side platforms to make their inventory available to advertisers. Ad inventory refers to the total amount of space a publisher has for advertisements, which can fluctuate over time. 
• Advertisers prepare their ads and gather all creative assets. With their ads in mind, they choose their target audience and upload them to the DSP. Target audience segments can include characteristics like demographics and geography. 
• The DSP evaluates whether an advertiser should bid to buy ad impressions based on the relevance to the targeted criteria determined in the first step. DSPs help advertisers reach their target audience and not spend money serving ads to inapplicable audience members. 
• Advertisers compete with each other for ad impressions. The DSP places bids on the ad impressions in real time, shortening the process. 
• When an advertiser wins the bid, the DSP buys the ad impression. The ad is displayed on the publisher’s website to the audience. 

This process happens in a matter of milliseconds. Website visitors don’t see these steps happening on the backend and are simply shown the winning ad. 

Types of demand side platforms

Two types of demand side platforms are available to advertisers: self-serve and full-service.

• Self-serve DSPs are platforms that advertisers can use to buy advertising. They give advertisers total control of the buying process, and they can optimize their campaigns and trade ads themselves. 

• Full-service DSPs provide additional support and service similar to that of an agency. Advertisers outsource ad campaigns to a team that manages and controls it from start to finish, leaving advertisers with less control over the campaign execution. This option benefits advertisers that can’t manage their ad campaigns themselves and have large budgets to work with.

Basic features of demand side platforms

While the available DSPs on the market may differ slightly in functionality and offerings, there are some basic features to look for when selecting a DSP.  

• Audience targeting: Advertisers may want to reach different audience segments when advertising on publisher’s sites. A solid DSP should offer audience targeting capabilities so advertisers can target users by geographical location, demographic information, previous behaviors, and device used. 
• Budgeting strategies: DSPs provide various budgeting options to ensure the campaign budget lasts till it ends. A common example of a budgeting option in DSPs is the ability to allocate a daily spending budget.
• Access to premium inventories: DSPs are linked to many ad exchanges and supply side platforms,connecting publishers and advertisers worldwide. A benefit of using a DSP is that it can access more inventory than when working directly with a publisher to advertise.
• Real-time analytics: Measuring campaign performance in real time is crucial in programmatic advertising. Advertisers need to understand performance to quickly pivot and adjust their campaigns to drive better results. Many DSPs offer real-time analytics reporting functionality.

Benefits of demand side platforms

Demand side platforms enable advertisers and agencies to run effective programmatic advertising efforts in their marketing strategies. DSPs offer numerous benefits to advertisers and agencies, including:

• Centralized management of campaign efforts: Advertisers can manage their entire ad campaign across websites on one dashboard when leveraging DSPs. Rather than splitting separate campaigns across sites, DSPs allow advertisers to control and maximize their digital advertisements across many networks, reducing silos in their campaign management workflows. 
• Precise targeting capabilities for more effective spending of budgets: DSPs help advertisers reach their desired target audience members based on selected criteria. This level of specific targeting ensures that advertisers spend their marketing budgets on appropriate and relevant viewers, increasing the chance of securing conversions and identifying customers.
• Automated, real-time bidding (RTB) eliminating manual negotiations: The traditional media buying process pre-programmatic involves manually buying ad inventory. Manual buying can be time-consuming and results in negotiations between advertisers and publishers. RTB is quick, removes the manual hassle, and guarantees that ads are served to the targeted users at the right time.
• Real-time data insights to measure and improve campaign performance: DSPs help advertisers measure and monitor their campaign performance in one centralized location. An overarching view of performance metrics facilitates data-informed optimization decisions.

Demand side platform vs. supply side platform

A demand side platform is an automated platform that advertisers use to bid on available ad inventory. Advertisers use DSPs to reach their desired audience at the right time with specific creatives within a specified budget.

A supply side platform (SSP) is a tool publishers use to facilitate the sale of their ad inventory. Publishers use SSPs to sell ad impressions to potential buyers. DSPs assist the media buying process from publishers through SSPs and ad exchanges. 

Read more about how real-time bidding (RTB) works and its benefits.